Our Way Home envisions an an “all-hands-on-deck” approach to protect existing affordable housing and find ways to produce more.
Estimates say the U.S. is 5.5 million housing units short of need. A recent report by the National Association of Realtors (NAR) estimated it would take more than a decade - at double the current construction rate - to overcome that shortfall.
Since the Great Recession (2007 -2009), demand for affordable housing has grown steadily, but builders built fewer homes in the 2010s than in any decade since the 1960s.
This mismatch between supply and demand grew during the pandemic. Unprepared for the explosive demand caused by Covid-19 lockdowns, and still wary from the Recession about the dangers of over-speculation, builders did not keep up.
Record high prices and record-low inventory ensued, burdening families at all financial levels, but particularly those of low- and moderate-incomes, and people and communities of color.
While HUD can enact its part of the plans within its budget, many parts of the larger Biden plan will depend on Congressional action, as well as legislation on the state and local level.
Immediate actions include partnerships with the private sector to address supply chain disruptions, and programs to encourage hiring of more construction workers. Leaders plan to meet with representatives from the building industry in the coming months to explore additional moves.
The HUD measures are designed to streamline federal financing and funding sources to help lower costs and accelerate approval for projects in cities, counties, tribal communities, states, and U.S. Territories. This will include the use of federal transportation funds to ease restrictive local zoning laws and encourage smaller-scale development.
Biden’s 2023 Budget recommends funding for the production or rehabilitation of 500,000 affordable homes, with increases in rural construction, along with the expansion of manufactured home loans and greater freedom to add accessory dwelling units (ADUs) to existing properties.
The Federal Housing Finance Authority (FHFA), which oversees Fannie Mae and Freddie Mac is requiring that at least 50% of their multifamily housing budgets be spent on affordable housing in 2022.
The Department of Commerce recently announced reduced duties on Canadian softwood lumber shipments, part of an independent and quasi-judicial process.
In the coming months, HUD will convene roundtables, listening sessions, and peer learning opportunities to engage communities in discussions on housing supply policies and highlight current success stories.