Housing prices have continued to skyrocket and now the Biden administration is taking steps to level the playing field and make housing affordable again. The goal of President Joe Biden and his administration is to close the “housing supply” gap within the next five years. Here’s what you need to know.
On Monday, May 18, the administration released its “Housing Supply Action Plan” which outlines the steps that will be taken to boost housing availability and lower costs for renters and homeowners. The plan highlights what will be done to produce more affordable units and more housing supply over the next five years.
“When aligned with other policies to reduce housing costs and ensure affordability, such as rental assistance and down payment assistance, closing the gap will mean more affordable rents and more attainable homeownership for Americans in every community,” the White House said in an outline of the plan.
Affordable housing has been an issue for a while. However, with the pandemic, mortgage rates, inflation, and supply-demand issues colliding, it’s become essentially impossible for anyone to enter the housing market. And people in the market can’t keep up with the costs of the mortgage loan interest rate increase that saw people owe 28 percent more for their payments. Plus, for the first time ever, the median home made more money for homeowners than their job – and that’s bad for everyone.
To address these concerns, the Biden administration has outlined what steps they’re taking immediately, and what plans they have in the works to send to Congress. These include:
- Reward jurisdictions that reform zoning and land-use policies: higher scores will be given for specific federal grand processes
- Develop and launch new financing to preserve and build housing where there are financial gaps: This will include new manufactured housing, small multifamily buildings, and 2–4-unit properties.
- Improve on new and existing financing to include affordable options for multifamily options: This will include different loans, reforms to Low Income Housing Tac Credit, and the Home Investment Partnership program to use fund a larger range of housing activities.
- Ensure government-owned home supply will go where needed: To make sure the properties and supply of homes will go to people who will live in them or non-profits instead of large institutional investors.
- Address supply chain issues: Put focus on addressing the supply chain issues and improve building techniques to finish construction sooner.
The Housing Supply Action Plan notes that the issues we’re seeing in the market have been building for a long time and it’s not solely related to the pandemic. The plan also states that President Biden believes the best way to tackle the issue is to boost the supply of quality housing.
Flooding the market with more affordable housing, including multi-unit homes sounds like a good first step on paper. But as noted in the plan, new affordable home building needs to be done at a faster rate than homes that are converted, demolished, or dilapidated.