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May 17, 2022, 9:44 a.m. EDT

‘Millions of families struggle to keep roofs over their heads’: Biden administration has a plan to tackle America’s housing shortage — but will it be enough?

By Emma Ockerman

President Joe Biden’s administration unveiled a new action plan Monday to bring down the staggering housing costs helping to fuel inflation nationwide.

The White House’s sweeping blueprint to bump up housing supply comes at a time when the nation is lacking some 3.8 million single-family homes it needs just to meet current demand — a crisis that’s particularly severe for first-time buyers and Black Americans, who are experiencing a troubling decline in homeownership. What’s more, the housing shortage has been blamed in part for the country’s worst inflation in decades by driving prices up, creating a market that favors deep-pocketed investors while aiding the kind of economic circumstances that could ultimately cost Democrats control of Congress in the midterm elections. 

Much of the impediment to building new homes can be traced to exclusionary zoning laws, which restrict the kinds of homes that can be put in certain neighborhoods and effectively maintain segregation.

By favoring the local governments that are promoting density and rural main street revitalization for grant funding from last year’s bipartisan infrastructure bill, the White House hopes to tackle some of those regulatory barriers that have long constrained housing supply, it said in a statement detailing the housing strategy Monday. Other roadblocks to building housing, including labor shortages and the cost of materials, will also be addressed through meetings with private-sector officials, and the administration will continue to demand immigration reform, according to the White House statement.

“As his action plan reflects, President Biden believes the best thing we can do to ease the burden of housing costs is to boost the supply of quality housing,” the White House said. “This means building more new homes and preserving existing federally-supported and market-rate affordable housing, ensuring that total new units do not merely replace converted or dilapidated units that get demolished.” 

To be sure, several of the efforts to curb the nation’s housing shortage need the support of Congress, the White House said. Biden’s 2023 budget features a mandatory spending proposal with $10 billion in grants for state and local governments that have already removed barriers to developing affordable housing, and the president’s stalled Build Back Better platform included a new competitive grant program worth $1.75 billion to incentivize states to further “eliminate needless barriers to affordable housing production, including permitting for manufactured housing communities,” the White House said in its statement .

White House aims to support new construction

Apart from doubling down on exclusionary zoning, the White House said it will work to address the “lack of attractive and low-cost financing for new construction and rehabilitation,” with a focus on financing options for the construction and rehabilitation of single-family homes, properties of two to four units, accessory dwelling units, manufactured and modular homes, and smaller multifamily properties.

Freddie Mac is looking into the possibility of purchasing the high-interest “chattel” loans often used to buy manufactured homes, previously called mobile homes, for example, and the federal government wants to make it easier to both finance and build manufactured homes. 

Separately, the feds will continue to urge local governments to use coronavirus relief funds to build and preserve affordable housing, and the federal government will aim to drive housing supply to owner-occupants and “mission-driven entities” rather than investors. 

At this point, though, the concern among some advocates is whether the Biden administration is doing too little, too late. Rent prices are rising nationwide, with asking rents jumping by 40% in Portland and 38% in Austin in the past year, according to Redfin. Evictions are up in some cities, and some people are reportedly already becoming homeless due to an increase in their housing costs. And significant investments in affordable housing of about $170 billion were tied to the House-passed Build Back Better Act. While Biden’s plan has several solutions to address the housing shortage long-term, the fact remains that people are suffering now.

“As rents rise, homelessness increases, public housing deteriorates, and millions of families struggle to keep roofs over their heads, robust federal investments and actions are badly needed and long overdue,” Diane Yentel, president and CEO of the National Low Income Housing Coalition, said in a statement. “I commend President Biden for taking significant and decisive action, but 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. Only through a combination of administrative action and robust federal funding can the country truly resolve its affordable housing crisis.”

Tara Raghuveer, the Homes Guarantee campaign director at People’s Action, a progressive advocacy group made up of grassroots organizations across the country, also said Biden’s proposals “barely scratch the surface” of what is needed.One problem, Raghuveer said, is that the plans depend too much on Congress to succeed.

“The second reason today’s plans seem insufficient, to me, is that they’re overly reliant on the private market to solve problems that the private market has created,” Raghuveer added. “Our housing crisis actually will not be solved by private profiteers. It will only be solved by the federal government and state and local government making decisions and making policy that actually moves housing out of the realm of profit and into a guaranteed public good.”

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