Though the current housing crisis was decades in the making, all levels of government and the private sector can work together now to ease the burden on consumers and increase housing availability, affordability, and accessibility. This was the message Tuesday from experts during a webinar hosted by national think tank Third Way called “A Look Ahead: Fixing the Housing Crisis.”
Chronic underbuilding has contributed to housing supply issues across the board. Affordable housing is especially scarce, putting greater strain on moderate-income and first-time home buyers. Housing production is 4 million to 5 million units below where it needs to be to meet demand, said Erika Poethig, special assistant to President Joe Biden for housing and urban policy. Supply chain and labor issues have played a part in building woes in recent years, said Poethig, but a lack of land is perhaps an even greater stumbling block. State and local governments can work to address zoning and land-use issues in their own backyards, she said, and the Biden administration is working to incentivize inclusionary zoning and land use that promotes higher-density housing. “Land use and zoning reform is essential to boost safe, affordable housing supply,” said Poethig.
She noted that the administration is also undertaking executive actions, recently issuing an order that pledges 100,000 new rental units over the next three years. So far, 10,000 units have been created.
Student loan debt is an additional burden for younger home buyers and people of color—an issue highlighted in the National Association of REALTORS®’ 2022 Snapshot of Race and Home Buying in America—said Bryan Greene, the association’s vice president of policy advocacy. In February, NAR’s research team released a report, The Double Trouble of the Housing Market, which explores the effects of record-high home prices and record-low inventory on the market. “Consumers are struggling to achieve what their parents achieved,” said Greene. “Overall, we need to advocate that [housing] is a national priority.”
NAR is considering the following policy proposals to boost supply and make homeownership more broadly available:
- Down payment assistance
- Alternative credit scoring
- Tax incentives for repurposing commercial properties into residential
- Promoting sales of single-family homes to owner-occupants rather than investors
- Special purpose credit programs
People of color also face greater hurdles in the housing market due to historic and present-day discrimination that has prevented the accumulation of intergenerational wealth. Racial zoning and redlining, racially restrictive covenants, and appraisal bias have created barriers to homeownership for minority buyers, said Lisa Rice, president and CEO of the National Fair Housing Alliance, adding that many discriminatory policies remain in effect. “There is a larger gap today between Black and White homeowners than there was when the Fair Housing Act was passed,” said Rice.
Rice advocated for The Black Homeownership Collaborative’s 3by30 plan, which seeks to create 3 million net new Black homeowners by 2030. The program’s partners include nonprofits, lenders, developers, and associations, including NAR, NAREB, and the NAACP. “This problem was created by many actors,” said Rice. “It will take all stakeholders working collaboratively to fix it.”Gene Sperling, political coordinator of the American Rescue Plan and senior advisor to President Biden, also noted the important role the Emergency Rental Assistance Program played in keeping people in their homes during the pandemic. He pledged additional support from the administration for renters and housing providers. “At this moment, five million payments have gone out to households and landlords,” Sperling said. “There’s never been anything like this.”