A Deep Dive into Affordable Housing

Friday, March 15, 2024

In this week's newsletter: a closer look at the problem of affordable housing, possible solutions, and prospects for important legislation.

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“We agree with President Biden that this is a place where there’s a huge need,” BPC President and CEO Margaret Spellings said this week about affordable housing, “and there is bipartisan momentum around it.”

Rents remain stubbornly high, housing supply is tight, and some 650,000 individuals are homeless on any given night in America. Through our?Terwilliger Center , we’re knee-deep in housing policy, and we’re encouraged that, in his?State of the Union address ?and?fiscal 2025 budget , the president spoke out on the need for more affordable housing. We’re focusing heavily on it as well. This week, Spellings talked about the problem on “The Briefing,” BPC’s co-branded show on SiriusXM (Channel 124) – as did Housing and Urban Development (HUD) Deputy Secretary Adrianne Todman, who becomes acting secretary when Marcia Fudge?steps down ?next Friday. Also this week, we outlined our housing priorities in?two ?letters ?to Capitol Hill. And in an interview recorded yesterday and set to air next week on SiriusXM, our board chair and former HUD Secretary?Henry Cisneros outlines the federal, state, and local solutions that will ease the crisis. Meanwhile, we’re planning our?2024 Summit on Housing Supply Solutions , which we’ll hold on June 11.

Here’s a closer look at the problem of affordable housing, possible solutions, and prospects for important legislation.

The problem

Housing affordability is a major challenge for millions of families. As a nation, we’ve “underbuilt ” housing by millions of homes over the last 15 years. The 2007-2009 recession cost the home building industry hundreds of thousands of construction jobs that remain unfilled; restrictive zoning and land use practices in communities have severely limited the types of homes that can be built; COVID-19 and supply chain disruptions caused widespread shortages of homebuilding materials that raised costs and impeded construction; and rising mortgage rates have prompted homeowners with low rates to stay put rather than move and make their homes available for others. With a limited supply of housing, rents and home sales prices have skyrocketed. Some 42 million households now put more than a third of their income toward housing costs, the highest level since 2011.

Solutions

We’re pleased that legislative efforts to expand the Low-Income Housing Tax Credit (LIHTC) have momentum in Congress via the Tax Relief for American Families and Workers Act, which the House passed in January, with overwhelming bipartisan support. LIHTC?has been the nation’s most successful affordable housing production program for?nearly 40 years, supporting the rehabilitation and construction of about?3.7 million rental homes and serving more than 8 million low-income households. The Neighborhood Homes Investment Act would create a new tax credit to increase the supply of “starter homes”?available for sale. In addition, we believe that local land use and zoning reform is critical to allowing greater housing density and increasing supply. We recently hosted Montana’s Republican governor, Greg Gianforte, for a discussion about how he has made greater housing affordability through zoning reform one of his key priorities.

Prospects? ?

An expanded LIHTC and the Neighborhood Homes Investment Act enjoy strong bipartisan support, and we’re working hard to convince policymakers to enact them. But?six other pending bipartisan bills ?would increase housing stability and economic mobility for low-income families, improve and streamline existing housing programs, cut red tape to build more affordable housing, and modernize the rural housing program. Most of them are reflected in our comprehensive legislative plan, the American Housing Act. We think policymakers can and should act on any or all of these measures this year.?

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