New Plan Signals White House Commitment to Housing
President Biden has taken several steps to ensure an increase in the supply of affordable housing, according to a new fact sheet on the Administration’s housing agenda released on September 1, 2021. In the plan, the White House lays out four areas in which immediate action has been taken to drive affordability in housing: boosting the supply of affordable housing, increasing the availability of 2-4 unit properties, increasing homeownership for individuals and working with state and local stakeholders to reduce exclusionary zoning.
One of the plan’s first actions is to increase the contributions that government-sponsored enterprises (GSEs) Fannie Mae and Freddie Mac may invest towards the Low-Income Housing Tax Credit (LIHTC). LIHTC provides critical support to the nation’s affordable housing production by helping apartment firms operate below-market rate housing in an economically feasible manner. In addition to the GSEs’ increased investment in LIHTC, the Treasury Department will unleash $383 million of new funding into the Capital Magnet Fund grant program which will help leverage private capital for the development of new affordable housing. The plan also relaunches a partnership between the Treasury Department and the Department of Housing and Urban Development’s Risk Sharing Program. Together, the two agencies will help mitigate lending risk to state and local housing finance agencies and enable the development of new affordable housing.
The plan also calls upon the Federal Housing Finance Agency (FHFA) to address the GSE mortgage eligibility requirements for buildings with 2-4 units. In March, the GSEs implemented restrictions on its lender partners that reduced the number of loans they would acquire, particularly impactful for properties with 2-4 units. It is anticipated that these restrictions will be reversed, allowing for greater lending to these property types and placing much-needed units back into the housing stock.
Finally, the Administration will explore federal solutions that will compel greater housing development at the state and local level. This will include identifying and seeking pathways to reduce common barriers to housing development. The plan also looks to leverage resources like the State and Local Fiscal Recovery Fund to promote new affordable housing development and orders the immediate publication of a Housing Supply Toolkit to be distributed to state and local governments.
The White House expects the plan to create more than 100,000 new housing units over the next three years. While this output does not meet the nation’s need for the more than 4.6 million new housing units that the National Apartment Association (NAA) estimates are needed over the next ten years, it is a step in the right direction. NAA applauds the White House for signaling a strong commitment to increasing the supply of housing, breaking down barriers to housing development and reclaiming affordability for the nation’s renters. NAA looks forward to being a trusted partner and resource to the Administration as it further defines its plans for housing affordability.
For more information on the White House Plan to Increase Affordable Housing, please contact Sam Gilboard, NAA’s Manager of Public Policy.