The Biden-Harris Administration announced steps that it said will create, preserve and sell to homeowners and non-profits nearly 100,000 additional affordable homes for homeowners and renters over the next three years.
There will be an emphasis on the lower and middle segments of the market, according to the White House.
To get this done, the White House said federal agencies will:
- Boost the supply of quality, affordable rental units by relaunching the partnership between the Department of Treasury’s Federal Financing Bank and the Department of Housing and Urban Development (HUD) Risk Sharing Program in order to enable eligible state housing finance agencies (HFAs) to provide low-cost capital for affordable housing development; raising Fannie Mae’s and Freddie Mac’s (the Enterprises) equity cap for the Low-Income Housing Tax Credit (LIHTC), the largest federal program for the construction and rehabilitation of affordable rental housing; and making more funding available to Community Development Finance Institutions (CDFIs) and non-profit housing groups for affordable housing production under the Capital Magnet Fund;
- Boost the supply of manufactured housing and 2-4 unit properties by expanding financing through Freddie Mac. Along with Fannie Mae’s and the Federal Housing Administration’s (FHA) existing policies, these steps will enable more Americans to purchase homes and increase the availability of rental units throughout the country;
- Make more single-family homes available to individuals, families, and non-profit organizations—rather than large investors—by prioritizing homeownership and limiting the sale to large investors of certain FHA-insured and HUD-owned properties, in addition to expanding and creating exclusivity periods in which only governmental entities, owner-occupants, and qualified non-profit organizations are able to bid on certain FHA-insured and government-owned properties;
- Work with state and local governments to boost housing supply by leveraging existing federal funds to spur local action, exploring federal levers to help states and local governments reduce exclusionary zoning, and launching learning and listening sessions with local leaders.
Currently, Congress is working toward passing the Build Back Better Agenda, which includes an investment in building new homes and making existing housing safer, healthier, and more energy-efficient, according to the White House.
"The large and long-standing gap between the supply and demand of affordable homes for both renters and homeowners makes it harder for families to buy their first home and drives up the cost of rent," the White House said. "Higher housing costs also crowd out other investments families can and should make to improve their lives, such as investments in education."
According to the White House, President Biden is "committed to using every tool available in government to produce more affordable housing supply as quickly as possible and to make supply available to families in need of affordable, quality housing—rather than to large investors." One out of every six homes purchased in the second quarter of 2021 was acquired by investors, the White House said.
National Association of Home Builders (NAHB) Chairman Chuck Fowke released a statement after the plan was announced.
“NAHB applauds the Biden administration for its newly announced plan to increase the affordable housing supply. It is important that the plan includes tangible policies to incentivize new residential construction,” he said. “We look forward to working with the administration in the effort to boost the supply of affordable rental housing and single-family housing for America’s hard-working families.”
View the full release here.