White House details plans to improve housing affordability

<p><p>WASHINGTON – White House officials are outlining plans to build and restore more than 2 million homes, a response to <a href=”https://apnews.com/article/business-prices-home-prices-fc036f9c544b9de3e95ae032c38c673d”>the volcanic rise in housing prices</a> over the past year.</p></p><p><p>Millions of Americans are getting priced out of ownership or stuck spending the bulk of their income on rent.</p></p><p><p>The S&amp;P CoreLogic Case-Shiller 20-city home price index climbed a record 19.1% in June from a year ago, as too few homes are available to buy and low interest rates have enabled affluent buyers and real estate investors to pay more for homes.</p></p><p><p>The jump in prices is a threat to President Joe Biden’s vision of centering the U.S. economy around the middle class, a group that has defined itself in large part through home ownership.</p></p><p><p>Americans’ desire to own homes has also altered regional politics as suburbanites aligned with Democrats in 2020 to help give Biden <a href=”https://apnews.com/article/why-did-AP-call-election-for-Biden-fe79276cd9175fffc7cf4fb58045fcf9″>key victories in Arizona and Georgia</a>, two states that have added population through new home construction.</p></p><p><p>The White House Council of Economic Advisers on Wednesday posted on its blog <a href=”https://www.whitehouse.gov/cea/blog/2021/09/01/alleviating-supply-constraints-in-the-housing-market”>a detailed analysis</a> of the affordability problem and the administration’s plans to relieve it.</p></p><p><p>Its analysis notes that housing supply has fallen short of population growth for four decades, so many of the challenges predate the disruptions caused by <a href=”https://apnews.com/hub/coronavirus-pandemic”>the COVID-19 pandemic</a>.</p></p><p><p>Researchers at the mortgage buyer Freddie Mac estimate that the United States is 3.8 million homes shy of what is needed to meet demand.</p></p><p><p>The persistent shortage has meant that home prices are steadily increasing faster than incomes, making it harder for first-time buyers to save for down payments and keeping them in rentals longer.</p></p><p><p>Nearly half of renters spend more than the recommended 30% of their incomes on housing.</p></p><p><p>To increase home construction, Biden’s economics team proposes a series of policy shifts.</p></p><p><p>First, it intends to deliver 100,000 affordable housing units over three years through a series of administrative changes.</p></p><p><p>It will increase mortgage availability through Freddie Mac and Fannie Mae for manufactured houses and buildings with two to four units.</p></p><p><p>The government also intends to make it easier for would-be owners and nonprofits to buy homes that failed to sell in foreclosure auctions, as well as expand outreach to local governments and nonprofits to buy federally held homes.</p></p><p><p>The government also plans to increase the financing options for apartment buildings through tax credits, loans and grants.</p></p><p><p>Secondly, the Biden administration estimates that its economic agenda would lead to the construction and renovation of 2 million homes.</p></p><p><p>This would include the use of federal subsidies, the low-income housing tax credit, a new tax credit for construction in economically vulnerable neighborhoods and incentives to remove exclusionary zoning and land use policies by local and state governments that limit new construction.</p></p><p><p>Still, the blog post cautioned that a supply crunch could linger. </p></p>