Biden directed federal agencies to take a broad range of actions to improve the supply of affordable housing, and White House economic advisors outlined how those initiatives—combined with proposals intended to be included in the $3.5 trillion spending plan currently being drafted by Congress—could make housing in the U.S. cheaper and more plentiful by adding or refurbishing more than 2 million homes over time. The policies aim to address a housing shortage that’s been brewing for decades. Construction of new homes has failed to keep pace with demand for the past 20 years, leaving the country 5.5 million homes short of what it needs, according to a report earlier this year commissioned by the National Association of Realtors. A May report from Freddie Mac pegged the deficit at 3.5 million. The pandemic exacerbated the shortage, sending single-family prices skyrocketing and rents along with them. “The large and long-standing gap between the supply and demand of affordable homes for both renters and homeowners makes it harder for families to buy their first home and drives up the cost of rent,” the White House said Wednesday. Administrative actions include:
relaunching a federal program to finance new apartments that was suspended in 2019; allowing government-backed housing finance companies Fannie Mae and Freddie Mac to increase their investments in affordable housing; making financing more available to owners of small apartment buildings and mobile homes; and giving individuals, nonprofits, and government agencies priority over real estate investors when Fannie and Freddie-owned foreclosed homes are put up for sale.
Together, these steps could result in around 100,000 affordable homes being built over the next three years, White House advisors said in a blog post Wednesday, based on estimates from federal housing agencies. Biden also called on Congress to pass laws that would create another 2 million homes, according to the advisors’ estimates. Those include new federal subsidies to build affordable rental units, expanded tax credits for builders of low-income housing, a new tax credit for homeowners to fix up and build affordable houses in economically disadvantaged areas, and incentives for local governments to remove regulations that hinder the construction of new housing. Have a question, comment, or story to share? You can reach Diccon at dhyatt@thebalance.com.
