America’s President, Biden is proposing a massive investment in affordable housing through his infrastructure plan as the housing market continually blows hot.
According to reports, the President aims to provide about 2 million affordable houses and apartments with $213 billion in tax credits, federal spending and grants meant to encourage the construction of new buildings and the rehabilitation of existing ones to serve lower-income families.
Sarah Saadian, vice president of public policy at the National Low Income Housing Coalition said: “I’m actually really pleased to see that the president included such robust resources on housing. It’s definitely at a scale that’s needed to address the underlying causes of the housing crisis. The real question, are we prioritizing the right types of investments to make them as most effective as possible?”
Biden’s proposal includes $40 billion for the National Housing Trust Fund, which gives states grants to build and repair public housing. Saadian said that while that money would go a long way, it covers just more than half of the roughly $70 billion backlog in projects in need of support from the fund.
Ralph McLaughlin, chief economist for real estate and mortgage brokerage Haus said: “To be frank, it’s something the housing market has needed for decades. And in the long run, it should help chip away at the housing supply problem in the U.S.”
The median sale price of a home rose above $300,000 for the first time this past summer and hit $349,400 in February 2021, according to data released by the Commerce Department last month. Every metro area tracked by the National Association of Realtors saw home prices rise in 2020, and 88 percent of metro areas saw double-digit price increases, the trade group said in a report from February.
Other measures intended to expand the supply of affordable housing include $20 billion in tax credits meant to encourage the building and renovation of 500,000 affordable homes in undeserved areas, and a grant program to reward states and localities that scrap zoning laws that prevent the construction of affordable housing.
Efforts to scrap restrictive zoning laws have often faced fierce opposition in wealthy areas of all political stripes, driven mainly by homeowners eager to fend off development that could reduce the value of their homes. Zoning laws have also been used to prevent the integration of predominantly white neighborhoods by keeping costs beyond the reach of Black and Hispanic households locked out of the market for decades by explicit discrimination.
The zoning grant program in Biden’s infrastructure program, however, is a purely incentive-based initiative that fair housing advocates hope will help life struggling Black and Hispanic families, who have suffered disproportionate burdens during the pandemic.