This is a measure that could help solve the affordable housing crisis.
- Affordable housing is a major issue affecting people across the country.
- The Biden administration aims to solve the problem by allocating stimulus funds to build homes.
Housing is the typical American’s biggest monthly expense. But for many Americans, housing takes up an unreasonable amount of their income.
Part of the problem stems from a glaring lack of affordable housing nationwide. During the Great Recession, home building slowed as the housing market crashed. This resulted in a shortfall of approximately 1 million affordable housing units.
Meanwhile, since the start of the pandemic, the construction industry has faced its share of challenges. Not only have building materials become more expensive to purchase due to supply chain backlogs, but labor has also become more expensive. As such, it has become even more difficult to build affordable housing to fill this shortfall.
Now the Biden administration wants to fix the problem by tapping into funds from the U.S. bailout, which was signed into law in March 2021. The goal is to open up affordable housing and make zoning regulations less restrictive in order to provide more affordable housing. become available to those who need it.
A massive relief bill with continued impact
Many people are familiar with the US bailout — the $1.9 trillion relief package that sent the latest round of stimulus checks to Americans’ bank accounts and increased the child tax credit. Since this relief bill was so massive, there are still funds available that can be used for different purposes. And one such initiative the Biden administration is pushing for is affordable housing.
The goal is not only to build more housing, but also to work with local governments to ease zoning restrictions and remove barriers to construction. This could include changing rules around things like minimum lot sizes and parking space regulations for multi-family properties.
Over the past two years, house prices have soared as mortgage rates have fallen to record lows and housing supply has dried up. These days, borrowing rates are much more expensive than they were in mid-2020 to early 2022. But the housing market is still seriously short of inventory, driving up the cost of purchases. of houses.
Because it has become so expensive to buy a house, more and more people are turning to renting. But the cost of rentals has, in turn, skyrocketed as well. And now many Americans are struggling to afford housing at a time when inflation has made every expense under the sun cost more.
Good use of funds
The US bailout has undoubtedly provided a world of relief to those who have benefited from it. But the bill has also been a source of controversy in recent months as inflation has soared. Many lawmakers (especially those who oppose the bill) blame the stimulus policies on the runaway inflation that consumers face today.
At this point, issuing another round of stimulus checks would be potentially disastrous for inflation. But allocating funds to affordable housing is another story. And if the Biden administration is able to move forward with its plan, it could bring us closer to solving a major problem.
The Best Mortgage Lender in Ascent in 2022
Mortgage rates are rising – and fast. But they are still relatively low by historical standards. So if you want to take advantage of rates before they get too high, you’ll want to find a lender who can help you get the best rate possible.
This is where Better Mortgage comes in.
You can get pre-approved in as little as 3 minutes, without a credit check, and lock in your rate at any time. Another plus? They do not charge origination or lender fees (which can reach 2% of the loan amount for some lenders).
Read our free review