The White House on Monday said it would try to ease costs for renters and prospective homebuyers by boosting housing supply through steps the administration can take without Congress.
With Democrats’ social safety net and climate package, legislation that would provide $150 billion for housing, stalled in the Senate, the administration outlined steps to encourage construction of new affordable housing units including building incentives into Transportation Department grants, repurposing existing funds and easing financing for affordable units.
Low construction in the wake of the 2008 housing and financial crisis has left the country with too few homes to meet demand, pushing up costs for renters and would-be homebuyers. Housing costs make up about one third of the basket of goods included in the Consumer Price Index, which measured an annual inflation rate of 8.3 percent last month.
The administration cited estimates by Moody’s Analytics pegging the housing shortfall at about 1.5 million homes, though industry groups such as the National Association of Realtors say there’s a shortage of at least 5.5 million homes.
To close the shortfall, the White House said the Transportation Department will amend grant formulas to reward states and localities that have overhauled zoning laws to encourage denser development. That includes local grants provided by last year’s infrastructure law and other discretionary programs.
The Housing and Urban Development Department will also encourage state and local grantees to use money from more flexible programs, including Community Development Block Grants, to create more affordable housing.
The administration said the Treasury Department will encourage state and local governments to put pandemic relief money Congress provided in 2021 toward affordable housing. So far, about 570 jurisdictions have committed $11.7 billion of those funds to housing activities, the administration said.
The White House will also encourage construction of affordable homes by lowering the barriers to financing. That includes streamlining procedures and requirements across federal programs, including low-income housing tax credits, HUD programs and the Housing Trust Fund, and exploring more federal support for financing manufactured homes.
The administration called on Congress to take action to boost housing supply, including by providing the $150 billion in housing funds included in the stalled social safety net and climate spending package. The White House also listed more modest actions Congress could take, which could provide a hint of what housing provisions could look like in a pared back climate and social spending package.
The administration asked Congress to establish a Housing Supply Fund to distribute $25 billion in grants to state and local housing agencies working to boost affordable housing supply. Congress should also expand low-income housing tax credits to spur development of affordable, owner-occupied homes, the White House said.
Diane Yentel, president of the National Low Income Housing Coalition, praised President Joe Biden in a statement for taking action, but said Congress needs to act to solve the problem.
“The administration cannot solve the crisis on its own. Congress must also act with similar urgency and quickly enact Build Back Better’s transformative and badly needed housing investments,” she said. “Only through a combination of administrative action and robust federal funding can the country truly resolve its affordable housing crisis.”
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