ICYMI: Biden Administration Announces Immediate Actions to Increase Affordable Housing Supply

This morning, the White House announced immediate actions the Biden-Harris Administration is taking to increase the national housing supply in the short term by creating nearly 100,000 additional affordable homes over the next three years. Also this morning, HUD Secretary Marcia Fudge traveled to Philadelphia, PA to announce the measures and tour a new five-story affordable housing complex alongside Mayor of Philadelphia Jim Kenney and Rep. Dwight Evans. As the economy continues its historic recovery, President Biden and Vice President Harris believe we must build back better by producing more affordable housing supply as quickly as possible, especially for lower and middle income Americans in areas of high housing cost.

And today, the CEA posted a blog that includes a detailed analysis of the affordability problem and the administration's plans to relieve it.

The Administration is taking specific actions to increase the supply of affordable rental units, including relaunching a partnership between Treasury's Federal Financing Bank and the HUD Risk Sharing Program to enable agencies to finance affordable housing development. The Administration will boost the supply of manufactured housing by expanding financing through Freddie Mac, and will make more single-family homes available to families instead of large investors. Additionally, the agencies will work with state and local governments to boost housing supply by reducing exclusionary zoning and leveraging existing federal resources.

These actions are in addition to the President's Build Back Better Agenda, which will make an historic investment in building new homes and make existing housing safer, healthier, and more energy efficient.

See below for coverage of the Administration's steps to increase affordable housing supply:

Reuters: White House tackles housing shortage with plan for 100,000 affordable homes
[Andrea Shalal, 8/31/21]

The Biden administration is taking steps to address a severe housing shortage in the United States by creating and selling 100,000 affordable homes over the next three years using existing funds, the White House said on Wednesday.

The moves will focus on boosting home sales to individuals and non-profit organizations, while limiting sales to large investors, who scooped up one in six homes sold in the second quarter, according to a White House statement…

…U.S. President Joe Biden has proposed spending over $300 billion to add 2 million more affordable housing units as part of a $3.5 trillion investment package being considered by Congress, but wanted to push forward with immediate steps that could be taken now, the White House said. The plans will cover rural and urban housing projects, with a focus on aiding communities of color, where home ownership rates have lagged historically.

U.S. Housing and Urban Development (HUD) Secretary Marcia Fudge will announce the measures after touring a new five-story affordable housing complex in Philadelphia on Wednesday.

Fudge called the initiatives "significant downpayment" on Biden's commitment to boost the supply of affordable rental housing, expanding access to capital for state Housing Finance Agencies, empowering local communities to build more affordable housing and promoting equitable housing policies.

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AP: White House details plans to improve housing affordability
[Josh Boak, 9/1/21]

White House officials are outlining plans to build and restore more than 2 million homes, a response to the volcanic rise in housing prices over the past year.

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The White House Council of Economic Advisers on Wednesday posted on its blog a detailed analysis of the affordability problem and the administration's plans to relieve it. Its analysis notes that housing supply has fallen short of population growth for four decades, so many of the challenges predate the disruptions caused by the COVID-19 pandemic.

To increase home construction, Biden's economics team proposes a series of policy shifts.

First, it intends to deliver 100,000 affordable housing units over three years through a series of administrative changes. It will increase mortgage availability through Freddie Mac and Fannie Mae for manufactured houses and buildings with two to four units. The government also intends to make it easier for would-be owners and nonprofits to buy homes that failed to sell in foreclosure auctions, as well as expand outreach to local governments and nonprofits to buy federally held homes.

The government also plans to increase the financing options for apartment buildings through tax credits, loans and grants.

Secondly, 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 remove exclusionary zoning and land use policies by local and state governments that limit new construction.

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Wall Street Journal: White House to Unveil Steps Aimed at Easing Housing Supply Shortage
[Andrew Ackerman, 8/31/21]

The Biden administration is poised to unveil a series of steps aimed at addressing the U.S. shortage of entry-level homes and rental properties, according to people familiar with the matter, moves designed to boost their financing and construction over the coming years.

The changes would draw upon the administrative authority of government regulators such as the Federal Housing Finance Agency as Congress weighs broader policy changes tied to the debate over revamping U.S. infrastructure, according to a draft plan reviewed Tuesday by The Wall Street Journal. Details could change before the White House releases its final version. FHFA oversees Fannie Mae and Freddie Mac, the two mortgage giants that back about half of the $11 trillion mortgage market.

Individually, each regulatory move is technical and modest. Collectively, though, "they should have a meaningful impact, particularly because they are all focused on the lower end of the market, where there is the most need," said Jim Parrott, a former Obama administration housing adviser, commenting on the draft.

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One change would allow Fannie and Freddie to invest more of their resources into rental housing by boosting an existing regulatory cap on their investments in apartment projects supported by the Low-Income Housing Tax Credit. A second would expand an existing competitive grant program for Community Development Financial Institutions, to encourage affordable housing production. Yet another would increase the financing available for manufactured homes, which are built in factories rather than on a lot. They typically cost much less than homes built on sites and are often occupied by lower-income residents.

Additional changes would give first-time home buyers and philanthropies a chance to buy distressed properties insured by the Federal Housing Administration, aiming to give them a leg up against investors that have snapped up many such properties in recent years.

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The proposals come as Congress debates a series of additional moves backed by the Biden administration to boost the supply of affordable housing, including a grant program of at least $5 billion to ease so-called exclusionary zoning laws, such as minimum lot sizes or prohibitions on multifamily housing. The administration says such rules have inflated housing and construction costs and locked families out of areas with jobs and other economic opportunities.

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