The United States is struggling with a shortage of up to 5.5 million homes, experts say. The housing gap is so large that it would take more than 10 years to reduce, even if builders accelerate new home construction right away, the National Association of Realtors believes.
So President Joe Biden’s new plan that calls for administrative and legislative action to try and eliminate the housing shortfall within just five years is a most welcome announcement.
The new plan from the White house calls for boosting housing supply by rewarding areas of the country that have introduced more flexible zoning and land-use policies, by giving them higher scores in some federal grant processes. In addition, the plan calls for new steps to create and preserve hundreds of thousands of more affordable housing units. Those steps would include new policies towards rental assistance and down payment assistance that aim to reduce housing costs and ensure homes remain affordable.
Further, the White House intends to work with the private sector to address supply chain challenges that have held up new construction projects. It also wants to improve building techniques, with the ambitious goal of finishing construction in 2022 with more new homes than in any year since 2006.
For now the plan is of course all talk, but NAR President Leslie Rouda Smith welcomed the initiative amid growing calls for more urgent action to be taken.
“With rising mortgage rates and a persistent shortage of affordable homes, the dream of homeownership is limited for many middle-income, first-time, and first-generation home buyers,” she said. “Urgent action is needed to tackle our nation’s housing supply crisis.”
Rouda Smith added that the situation requires comprehensive action including zoning reforms, investment in new construction, and expansion of financing and tax incentives that can boost investment in housing and the conversion of unused commercial space.
She said land use restrictions in the U.S. have driven up the cost of housing for too many people for far too long.
“NAR supports policies encouraging states and localities receiving federal dollars to explore high-density zoning and other land-use rules that lock out families,” she continued. “We also support new grant programs for localities to enact pro-housing policies.”