- President Biden and the White House are working on plans for more affordable housing.
- Millions of Americans are losing property, according to official statistics.
- The desire of Americans to own houses has also altered regional politics.
Millions of Americans are losing property or are stuck spending most of their income on rent. The price index S&P CoreLogic Case-Shiller 20-city housing sales rose a record 19.1% in June from a year earlier as there are very few homes available to buy and low interest rates have allowed wealthy buyers and real estate investors to pay more for the homes.
President Biden’s vision
The jump in prices is a threat to President Joe Biden’s vision of focusing the American economy on the middle class, a group that has defined itself largely through home ownership.
Americans’ desire to own homes has also altered regional politics, as suburbanites lined up with Democrats in 2020 to help Biden win key victories in Arizona and Georgia, two states that have added population through of the construction of new houses.
The Affordable Housing Problem
The White House Council of Economic Advisers blogged a detailed analysis of the affordability problem and the administration’s plans to alleviate it. Their analysis notes that the housing supply has not caught up with population growth for four decades, so many of the challenges pre-date the disruptions caused by the COVID-19 pandemic.
Researchers at homebuyer Freddie Mac estimate that the United States is 3.8 million homes below what is needed to meet demand. Persistent shortages have meant that home prices are steadily rising faster than incomes, making it difficult for first-time buyers to save for the down payment and keep them on rent longer. Almost half of renters spend more than the recommended 30% of their income on housing.
To increase housing construction, Biden’s economics team proposes a series of policy changes. First, it intends to deliver 100,000 affordable housing units over three years through a series of administrative changes. It will increase the availability of mortgages through Freddie Mac and Fannie Mae for manufactured homes and buildings from two to four units.
The government also intends to make it easier for prospective homeowners and nonprofits to buy homes that did not sell at foreclosure auctions, as well as expanding the reach to local governments and nonprofits to buy houses owned by the federal government.
More financing options
The government also plans to increase financing options for apartment buildings through tax credits, loans and grants. Second, the Biden administration estimates that its economic agenda would lead to the construction and renovation of 2 million homes.
This would include the use of federal subsidies, the low-income housing tax credit, a new tax credit for construction in economically vulnerable neighborhoods, and incentives to eliminate zoning and land-use exclusion policies by local governments. and state that limit new construction. Still, the blog post warned that a supply crisis could persist. “There is no magic formula to quickly ease supply constraints,” he concluded.
The post Biden and the White House’s plans for more affordable housing appeared first on Hispanic World.