The plan focuses on the federally funded construction of hundreds of thousands of affordable units, the loosening of restrictive zoning and the introduction of new federal financing options.
The Biden administration announced on Monday a five-year plan to ease housing costs for American families by boosting the country’s affordable housing supply.
The plan focuses primarily on the federally funded construction of hundreds of thousands of quality affordable units over the next three years, the loosening of restrictive zoning and the introduction of new federal financing options for housing construction, with the goal of narrowing the Moody’s Analytics estimated supply gap of 1.5 million homes.
“When aligned with other policies to reduce housing costs and ensure affordability, such as rental assistance and downpayment assistance, closing the gap will mean more affordable rents and more attainable homeownership for Americans in every community,” the White House said in a statement. “This is the most comprehensive all-of-government effort to close the housing supply shortfall in history.”
Among the effort’s main points of action for the next three years are incentives for municipalities that adopt inclusive zoning and land-use policies through higher scores in federal grant programs, a plan to work with the private sector to improve supply chain bottlenecks, an initiative to expand and improve upon the types of federal financing available for development, and to develop new financing methods to build housing where gaps exist — whether through newly manufactured housing or accessory dwelling units and smaller 2-4 unit buildings.
In the immediate future, the administration plans on using transportation funding from the bipartisan infrastructure package to encourage state and local governments to boost their housing supply, incorporate more funding for housing into federal Department of Transportation projects, and add land use to the U.S. Economic Development Administration’s investment priorities.
“The Plan’s policies to boost supply are an important element of bringing homeownership within reach for Americans who, today, cannot find an affordable home because there are too few homes for sale in their communities,” The White House said.
The administration’s previous attempts at easing the housing crisis faltered along with the stalled Build Back Better reconciliation package, which was passed by the House of Representatives. The Senate has yet to agree on a version of the package. Segments of the Biden administration’s plan are rollovers from plans included in the reconciliation package, including the plan to incentivize accessory dwelling units and the grant program for localities that adopt housing-friendly zoning.
The plan released Tuesday combines initiatives that will require congressional approval, such as tax credits for rehabilitating homes, with actions that can be implemented immediately, like the use of Transportation Department funds.
The Biden administration identified restrictive zoning as one of the chief roadblocks to increasing the nation’s housing supply, along with a lack of attractive low-cost financing for new construction or rehabilitation of existing units.
“One of the most significant issues constraining housing supply and production is the lack of available and affordable land, which is in large part driven by state and local zoning and land use laws and regulations that limit housing density,” the White House statement reads.
The plan involves creating attractive financing options for less traditional housing construction instead of just large multifamily construction, including for accessory dwelling units, construction and rehabilitation of single family homes, and smaller multifamily properties.
Proponents of constructing more housing said the plan is in line with what they have been advocating for years.
“We commend the White House for joining the fight to put the issue of housing affordability in the forefront of the national economic agenda after NAHB had been urging the administration to move on this vital national concern for the past several months,” National Association of Home Builders Chairman Jerry Konter said in a statement. “The plan contains many positive elements that would help address a host of affordability challenges and improve financing options, and acknowledges the long-term headwinds, like supply chain bottlenecks and chronic construction labor shortages, repeatedly identified by NAHB members as holding back housing production.”