Biden hopes to close the housing supply gap within five years. He announced immediate changes, but the extensive plan requires some congressional action.
WASHINGTON – The White House released a comprehensive Housing Supply Action Plan that he hopes will alleviate the current housing shortage within five years by boosting the supply of housing in every community.
While a few changes are immediate under presidential powers, Congress would need to enact legislation to achieve some of Biden’s goals.
“While the policies cover a wide range of issues and agencies, most are intended to do one thing: Make it easier and more economical to build affordable housing,” said Jim Parrott, a former Obama administration housing adviser, told The Wall Street Journal. “The total effect should be considerable.”
Housing Supply Action Plan overview
Provide incentives that entice communities to reform their zoning and land use policies, notably to make them more housing and development friendly.
Use new financing mechanisms at Fannie Mae, Freddie Mac and HUD where financing gaps exist – a financial incentive to build and preserve more housing, such as manufactured housing, accessory dwelling units (ADUs), 2-4 unit properties and smaller multifamily buildings.
Expand and improve existing forms of federal financing. This could include a Fannie Mae-led initiative to place multi-family Construction to Permanent loans in wider use; promote the use of state, local and tribal government COVID-19 recovery funds to expand the affordable housing supply; and/or reforming the Low-Income Housing Tax Credit (LIHTC) and the HOME Investment Partnerships Program (HOME).
Enact the Neighborhood Homes Investment Act to build and rehabilitate 125,000 homes for low- and middle-income homebuyers.
Ensure that more government-owned homes go to owners who will live in them or non-profits that will rehab them – not large institutional investors.
Work with the private sector to address supply chain challenges, labor shortages and improve building techniques to finish construction in 2022 on the most homes in any year since 2006.
While the National Association of Realtors® (NAR) applauds the release of the plan, it also encourages the White House and Congress to consider stronger measures to create additional residential units, such as tax incentives to convert unused or underutilized commercial property to affordable housing or condominiums, and tax incentives to increase the supply of construction workers.
“With rising mortgage rates and a persistent shortage of affordable homes, the dream of homeownership is limited for many middle-income, first-time, and first-generation homebuyers. Urgent action is needed to tackle our nation’s housing supply crisis,” says NAR President Leslie Rouda Smith. “NAR welcomes the administration’s work on this effort and encourages policymakers to look at comprehensive action.”
Source: National Association of Realtors® (NAR), Russell Riggs