Housing supply

Biden launches housing supply plan to offset rising prices

President Joe Biden (Getty, iStock)

President Biden presented a plan on Monday to close the housing deficit in the United States.

It will be an uphill battle: The administration’s previous affordable housing proposals have failed under the failed Build Back Better reconciliation bill. Still, housing advocates reacted enthusiastically.

“In my 25 years in this business, we haven’t had this level of focus on housing from the White House,” Alanna McCargo, president of Ginnie Mae, said Monday at a conference. on the financial markets organized by the Mortgage Bankers Association.

In a press release, the administration pointed to a 2021 Moody’s estimate that the country is more than 1.5 million homes short, though a Realtor.com study put the number north of 5 million. .

The president’s new plan aims to accelerate housing construction by increasing federal funding options for secondary suites, modular homes and manufactured homes, as well as using transportation grants to reward jurisdictions that encourage density. It could mean that cities and states that resist new housing will be turned down for highway project funding that was once routinely approved.

The plan recycles several proposals from the Reconciliation Bill, including a $1.75 billion grant program for localities that adopt zoning or policies that “reduce barriers to the elasticity and affordability of l ‘housing supply‘, and an expansion of the low-income housing tax credit program.

The National Low-Income Housing Coalition welcomed the president’s proposals, but also stressed the importance for Congress to move forward with the housing investments proposed in the reconciliation bill.

“It is only through a combination of administrative action and strong federal funding that the country can truly solve its affordable housing crisis,” Diane Yentel, the group’s president and chief executive, said in a statement. communicated.

The U.S. House of Representatives approved the $2 trillion Build Back Better bill in November, but the Senate has not accepted a version of the measure.

Biden has framed his latest housing proposals as a way to fight inflation: increase housing supply to drive down housing costs.

Other recent initiatives aim to dissuade large investors from acquiring single-family homes. The Federal Housing Administration recently extended to 30 days the period in which homeowners and nonprofits have the first opportunity to bid on properties sold through foreclosures on government-backed mortgages. federal.

The plan looks to Ginnie Mae to securitize affordable housing financing, including Title I loans, which helps explain McCargo’s positive reaction. But she was hardly alone.

Jolie Milstein, president and CEO of the New York State Association for Affordable Housing, echoed enthusiasm that the administration appears committed to ambitious housing policies.

Milstein noted that the proposal to reward jurisdictions for housing-friendly land use policies was an important recognition that city and state governments are critical to increasing housing supply.

“We need to build more. Small incremental additions are not going to change the calculus, she said. “It’s going to take an all-hands-on-deck approach.”

Orion Jones contributed reporting.