Biden takes actions on affordable housing, aiming to close gap in housing supply in 5 years
WASHINGTON – Amid skyrocketing prices, President Joe Biden's administration is taking steps to spur more affordable housing as the White House seeks to close the U.S. "housing supply gap" in five years.
Among the efforts is an increase in federal assistance to help finance and produce more factory-built homes, including mobile homes.
Freddie Mac announced it is exploring purchasing chattel loans, on which the majority of homeowners who buy manufactured homes rely rather than traditional mortgages.
The Federal Housing Finance Agency committed to work with lenders to begin a pilot program to offer financing for the construction and renovation of accessory dwelling units, which are typically cheaper than traditional homes. This housing includes garage apartments, backyard homes and in-law suites.
These and other measures were outlined in a housing supply action plan the Biden administration unveiled Monday.
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Biden faces increasing pressure to find solutions to address 40-year-high inflation, which the president called his "top domestic priority" last week. The USA has a shortfall of 1.5 million homes in the housing supply, according to Moody's Analytics, helping fuel a spike in rental and sale prices.
Biden's $1.75 trillion Build Back Better social spending plan proposed $150 billion for the construction and rehabilitation of more than 1 million affordably priced rental units and single-family homes. The plan stalled in Congress in December, leaving the White House to address affordable housing administratively in a more limited scope.
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Incentives for housing density
The Biden administration is ramping up financial incentives for jurisdictions that allow greater housing density in zoning and land use policy, officials said. The Department of Transportation prioritized density and rural main street revitalization this year in three grant packages totaling $6 billion. The department will continue such criteria in grants.
To jump-start construction, Fannie Mae is exploring expanding its loan offerings to developers to finance the construction of multifamily housing in a single closing loan that would serve as a permanent mortgage.
Biden's plan aims at the practice of large-scale investors buying single-family homes in low-income neighborhoods. The Federal Housing Administration will make foreclosed, real-estate-owned properties available to owner-occupants and nonprofits for 30 days before opening them to all bidders. The Department of Housing and Urban Development has taken similar steps for vacant property it holds.
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Home prices increased nearly 20% in major cities in February, according to the latest S&P CoreLogic Case-Shiller national home price index. Research by the National Association of Home Builders found the cost of building materials increased 33% since the start of the pandemic.
The White House encourages states and cities to use unspent dollars from $350 billion in direct aid from the American Rescue Plan, which passed in spring 2021, on preserving or adding affordable housing. Local and state governments committed $3.2 billion in COVID-19 rescue funds to housing.
Biden's plan launches an effort across the federal government and private sector to finish construction on the most new homes in the USA since 2006. White House officials said the administration will work with builders to address supply chain issues that have slowed construction.
Contributing: Terry Collins
Reach Joey Garrison on Twitter @joeygarrison.