Biden Administration Unveils New Housing Plan - Here Are the Details
The administration of President Joe Biden announced a comprehensive plan that is designed to help Americans in need of affordable and quality housing. The goal of the initiatives announced on Wednesday is to make housing more accessible to all Americans and not just large investors. According to Biden's team, the plan has the goal of creating and preserving homes for almost 100,000 new families over the next few years. The plan will specifically target the lower and middle sectors of the housing market with the hope of putting the American dream in reach for more people.
Here are a few of the ways that federal agencies will step in to meet these goals.
Increase Supply of Affordable Rental Units
One of the most impactful steps of this plan will be relaunching the alliance between the Department of Treasury's Federal Financing Bank and the Department of Housing and Urban Development (HUD) Risk Sharing Program. This partnership will allow eligible state housing finance agencies (HFAs) to offer capital for developers to build affordable housing. As part of this plan, the government will also raise Fannie Mae's and Freddie Mac's equity cap for the Low-Income Housing Tax Credit (LIHTC). As the most significant federal program aimed at building affordable rental units, this will make it easier for more Americans to get into this type of housing.
The Biden administration notes that 11 million American families, representing one-quarter of all renters, were spending over half of their monthly income on rent. This figure was before the pandemic with that figure growing even larger over the last few months. This part of the plan will boost the supply of affordable rentals so that families have more disposable income each month.
Boost Manufactured Housing and 2-4 Unit Access
Manufactured housing and 2-4 units provide a substantial amount of housing to low-income families across the nation. Recognizing the need for more of these types of affordable housing units, the new federal plan will boost the supply of these units by increasing the amount of financing available through Freddie Mac.
This leg of the plan will also request that state and local governments reduce the zoning barriers that prevent Americans from owning manufactured housing. This will make it more possible for families to jump into the housing market and begin to build equity.
Prioritize Homeownership for Single Families While Reducing Investor Involvement
In recent years, many of the nation's most affordable homes have been scooped up by investors rather than single families looking to jump into the market. This part of the housing plan will prioritize homeownership for families by limiting the ability of large investors to buy these homes in bulk.
The plan will also prioritize the transfer of homes to qualified non-profit organizations by allowing them to bid on specific FHA-insured and government properties. HUD will be instrumental in this effort to amplify the efforts to get non-profits, local governments, and other charitable community organizations involved in the effort to prioritize homeownership to families.
Leverage Partnerships with State and Local Governments
Lastly, the targeted housing agenda aims to work more with state and local governments to increase the nation's housing supply by using federal funds to influence action on the local level. This includes finding ways to use federal assistance to assist municipalities to limit their zoning that prices people out of the market.
Another key part of the plan to leverage these local partnerships is the launch of what the Biden team is calling "learning and listening sessions" with leaders in the community. These sessions will pair local government officials with the White House, HUD, and the Federal Housing Finance Agency (FHFA) to learn from each other. This community engagement is intended to empower local leaders to solve these problems at the micro level.
This new federal housing plan is part of the Biden administration's Build Back Better agenda. While there is no guarantee that any of these initiatives will deliver the desired outcomes, it is always good to stay informed about the latest outreach by the federal government as it relates to the housing market.