As renters and would-be homeowners struggle with the high cost of housing, the Biden administration has announced policies to address this strain on household budgets.
That includes $100 million in funding for a program to incentivize affordable housing production and streamlining loan application processes to expedite building more housing.
Some of those proposals — such as a cap on rent increases from corporate landlords — call for Congressional action, while others are rules and grants that can be done without legislative approval. The U.S. Department of Housing and Urban Development will also be finalizing a rule to allow different kinds of housing, such as duplexes and triplexes, to be built under the agency’s manufacturing and safety standards.
The Biden administration and the Harris campaign are making their housing policy case to the American people as Vice President Kamala Harris and former president Donald Trump compete for voters’ trust on economic issues. An August Financial Times/Michigan Ross poll shows that Harris is slightly ahead of Trump when it comes to who voters trust more on the economy, by one percentage point. Although that is a very small advantage, it is a change from July, when 35% of voters approved of President Joe Biden’s job on the economy compared to 41% for Trump.
Plans would cut red tape, but housing stock is still low
The administration’s plans to address supply and soaring prices also include repurposing federal land in Nevada and a cap on rent increases from corporate landlords, which would require Congressional action. Housing and homelessness experts say many of these changes are positive, particularly zoning changes, while others argue that a few of these actions are insufficient for the crisis at hand.
On Friday, Vice President Kamala Harris announced her plans for boosting housing affordability if she wins the presidency. Harris’ plans are similar to some of the Biden administration’s approaches to housing policy, with an emphasis on stopping corporate landlords from driving up rents and knocking down local zoning barriers to building affordable housing. She also announced a policy to provide up to $25,000 in payment assistance for first-time homebuyers on the condition that they paid rent on time for two years.
“We will take down barriers and cut red tape, including at the state and local levels, and by the end of my first term, we will end America’s housing shortage by building 3 million new homes and rentals that are affordable for the middle class,” Harris said at a campaign event in Raleigh, North Carolina on Friday.
Indivar Dutta-Gupta,who focuses on policy research and seminars at the Georgetown University McCourt School of Public Policy, applauded developments to make it easier and less costly to build affordable housing through the Pathways to Removing Obstacles to Housing program, which provides funding for communities getting rid of barriers such as “outdated” zoning policies and a “lack of neighborhood amenities.”
“It’s very difficult for a builder to just kind of copy and paste their plans from one community to another. Secondly, we’re not just talking about requirements for special permitting and land use that are tedious,” he said. “They’re time consuming and that dramatically increases the cost of housing, so if you can knock down a process that takes 12 months to six months, that can make a big difference for housing affordability.”
Kenneth Chilton, professor at the department of public administration at Tennessee State University, said there are certainly homes being built — just not enough affordable ones between $100,000 and $300,000 in the area he lives in Nashville. Wages have also not caught up to those prices, he added.
“The market has catered to the more affluent households, so there are new houses being built, but they’re million dollar-plus houses for people who can afford or are willing to put themselves in a financial burden to afford a million dollar house,” he said. “… It’s becoming harder and harder to afford the discretionary income needed to save up for down payment.”
The Biden administration and Congress has also focused more on corporate landlords of late, who are influencing the housing market. Dutta-Gupta and Chilton said that even in situations where they make up a smaller percentage of landlords, their practices influence other landlords and drive up rents. Chilton, who has studied how firms that can quickly snatch up all kinds of properties can influence regional housing markets, said it’s hard for the average homeowner to compete.
“You have a lot more corporations and investors who are buying up housing,” he said. “Some of those are institutional, but there’s been recent reports that even smaller local landlords are kind of adopting the same business practices of one-year leases with built-in cost of living adjustments. They’re operating like corporate landlords.”
He said that none of the Biden administration proposals he saw accounted for potential homebuyers, who have to apply for loans, failing to compete with groups and investors making all-cash purchases without inspections. Democratic lawmakers have introduced legislation in Congress to limit corporate landlords’ power, but it has not passed.
