When President Biden first proposed his Build Back Better legislation, it included $300 billion in housing investments. While that legislative package never passed, portions of it were included in the 2021 Infrastructure Investment and Jobs Act (IIJA) and the 2022 Inflation Reduction Act. But housing was overlooked, receiving virtually none of the billions in new federal funding.

Yet investment in housing is crucial; millions of Americans spend more than they can afford to put a roof over their heads and too many Americans live far from neighborhoods where they can gain access to economic opportunity. More investment in affordable housing near affordable public transportation is a key mechanism to reduce cost of living, and housing investments can help mitigate climate change if they’re coordinated with effective transportation investments that give people the ability to walk, bike, or take transit rather than drive.

The good news is that IIJA’s grants, while not housing focused, nevertheless could play a role in supporting affordable housing if federal government officials take advantage of the opportunity. To that end, the Joint Center for Housing Studies collaborated with the Urban Institute in fall 2022 to convene stakeholders and policymakers in Washington, DC to identify mechanisms to leverage transportation investments to further the preservation of, access to, and construction of affordable housing. This convening was supported by the Housing Crisis Research Collaborative. In “The Potential for Supporting Low-Income Renters Through Transportation Spending Under the Infrastructure Investment and Jobs Act and Beyond,” a new working paper we co-authored with Carlos Martín, Jorge Morales-Burnett, and Francisco Montes, we summarize our findings from the discussion.

With the help of over two dozen researchers, advocates, policymakers, and practitioners, we identified three promising interventions to link transportation investments in IIJA’s programs to housing:

1. Technical assistance from the federal government to local stakeholders to assist with planning for integrated housing and transportation;
2. Rigorous housing criteria in the Department of Transportation’s (DOT) competitive transportation grants to ensure that applicants consider impacts on housing as part of new project design; and
3. Baseline requirements from the DOT that transportation projects funded by formula grants do no harm to existing and future housing.

Using Technical Assistance to Support Integrated Planning

Funding for technical assistance can help build the capacity of states and localities to plan, apply for federal grants, and implement projects. The Reconnecting Communities program in IIJA, for example, includes $25 million for technical assistance to help communities develop creative approaches to redressing past harms imposed by construction of roads or rail lines; the federal government has an opportunity to encourage communities to focus transportation-related redevelopment on projects that add affordable housing or reduce exposure to pollution, particularly for low-income households. Similarly, the new Thriving Communities program, created by the 2022 Consolidated Appropriations Act, contains funding for both DOT ($25 million) and the US Department of Housing and Urban Development (HUD; $5 million) to build capacity to link IIJA transportation funding to housing and community revitalization. IIJA also contains language encouraging Metropolitan Planning Organizations to undertake Housing Coordination Plans and incorporate them into their transportation planning processes. DOT could leverage technical assistance to help state and local transportation officials create long-term relationships with their counterparts working on housing policy to develop these plans, link transportation and housing funds, and jointly address land use and development barriers.

Considering Housing Criteria in Competitive Grants

Competitive grants may have the strongest potential for linking transportation and housing priorities because their distribution is largely at the discretion of federal agencies. DOT can specify priorities in its Notices of Funding Opportunities (NOFOs) for these grants and mandate that projects include measures that increase housing supply, improve housing affordability, and prevent displacement. Indeed, DOT has made some progress in this direction, for instance with the NOFO for the Rebuilding American Infrastructure with Sustainability and Equity (RAISE) grant program funded by IIJA, which noted a preference for projects that demonstrate how they will improve quality of life through “reduce[d] transportation and housing cost burdens by integrating mixed use development and a diversity of housing types (including affordable housing) with multimodal transportation infrastructure.” Our convening attendees also noted that DOT could prioritize applications with support from entities responsible for housing.

IIJA’s Reconnecting Communities program also maintains an explicit link between transportation and housing since it focuses on bridging communities that were harmed or even physically separated by roads or rail lines in the past. IIJA provides $1 billion in funding for this program over the next five years, and many communities are already seeking funding for projects to cap, redesign, or even remove highways (or other infrastructure) and in the process build parks, affordable housing, and improve access to neighborhoods with disproportionately high shares of low-income households and people of color.

Putting Guardrails around Use of Formula Funding

Formula grant programs are the bread and butter of IIJA, accounting for most of its funding. These programs do not allow for much discretion by federal officials as their allocations and disbursements are determined by federal statute. Our convening attendees suggested that the most strategic use of these funds to support affordable housing would be to ensure that formula-funded projects minimize harm to existing housing. One way to accomplish this objective could be for DOT to place a moratorium on transportation projects that disproportionately impact communities in ways that do not affirmatively further fair housing goals (as described in the 1968 Fair Housing Act) or preserve affordable housing stock without appropriate restitution. Another way could be for DOT to highlight as best practices the state offices and projects that use IIJA formula funds in ways that encourage preservation and/or production of affordable housing. The approach of fostering connections between housing and transportation officials on state and local levels could also help ensure that formula fund recipients consider housing when planning for and implementing their projects.

Though there was a substantial missed opportunity in excluding housing from IIJA, there remain important opportunities to link its historic transportation investments with housing. Transportation projects, from pedestrian improvements to new public transportation lines, should be leveraged to support access to affordable housing, particularly for low-income renters. They should be planned in association with new housing investments, land-use changes that encourage denser and more affordable housing, and policies designed to prevent displacement. All levels of government could benefit from integrating housing and transportation planning, which could in turn help improve the proposals submitted for competitive grants and even improve how formula-funded projects are carried out. Given the newly divided Congress, substantial new funding for housing akin to the type envisioned in Build Back Better seems even less likely to materialize in the short-term, which makes the opportunities presented by IIJA all the more valuable.