The White House is expanding low-cost financing, easing regulations and incentivizing local reforms in a wide-ranging effort to increase housing supply.
The White House is announcing $100 million in grants to state and local governments to spur the construction of new housing, one of a host of new administrative actions to boost housing supply.
The Biden administration has witnessed record levels of housing production, driven by a pandemic-era boom in apartment buildings. More housing units are under construction now than at any point in half a century — some 60,000 multifamily units were completed in June alone — and rents are stabilizing in some areas as a result.
Yet the production of single-family homes remains meager, reaching a four-year low in June, and overall housing construction levels, while still high, have been sliding since December. With the Federal Reserve holding interest rates steady and Senate Republicans blocking a $78 billion tax deal that would shore up housing tax credits, the White House is using other tools to try to keep the pipeline flowing.
Actions across a number of cabinet-level agencies will address permitting, financing and regulations in order to speed up construction.
“The president and vice president recognize that housing is a critical component of a household’s budget, both for the one-third of American households that rent, and also for so many Americans who want to own their own homes,” said National Economic Advisor Lael Brainard. “That’s why it’s critical that we continue to provide strong incentives to build more units.”
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With the grants, the White House is doubling down on a US Department of Housing and Urban Development program to spur cities and states to eliminate regulatory barriers to housing. In June, Vice President Kamala Harris announced $85 million in funding for 21 jurisdictions across 19 states and the District of Columbia.
Instead of funding individual projects, the goal is to build long-term capacity for increasing the supply of homes organically by providing carrots to cities to reform their zoning ordinances. For example, leaders in Bend, Oregon, received a $5 million grant to develop a five-year plan to ramp up housing construction and address ongoing infrastructure limitations.
Demand for the program has proven to be high, federal leaders say, with $13 in requests for every available dollar for the first cycle.
“The federal government has not had any real tools to help leaders at the local and state governments take on some of these ideas. Building housing is such a local experience,” said Adrianne Todman, acting secretary for the HUD. “The federal government has become a true partner in helping local leaders cut the red tape.”
Tuesday’s announcement spans multiple agencies. For example, the White House is tweaking a Department of Transportation program that aims to make billions of dollars in low-cost financing available for transit-oriented housing developments. Developers, mayors and other leaders complained that regulatory burdens designed for billion-dollar rail projects are cost-prohibitive for the kinds of office-to-residential conversions that program was meant to facilitate. According to new DOT guidance, many loans for such conversion programs will be exempt from environmental review under the National Environmental Policy Act.
“Extensive NEPA review for buildings that already exist add to both the time it takes to produce housing and therefore to the cost of housing,” said Neera Tanden, director for the White House Domestic Policy Council. “If you can build it in six months instead of a year, that makes it a lot cheaper.”
The HUD and the Department of the Treasury are also expanding low-cost federal financing available to state and local housing agencies through an innovative public-private risk-sharing initiative that has seen tens of thousands of new affordable housing units built since 2021.
So far, Harris’s presidential campaign has not released a detailed housing plan. White House officials wouldn’t comment on those efforts. But on the campaign trail, she has cheered recent executive actions by the White House, including a call for Congress to introduce rent caps on corporate landlords.
“Every American deserves affordable housing so they have a roof over their head and a place to call home. That is why President Biden and I have a plan to build millions of new homes in communities across our nation, which will bring down the cost of rent and help more Americans buy a home,” Harris said in a statement. “Today, the Biden-Harris Administration is taking another critical step to help communities throughout the country remove barriers to building more affordable housing.”
Source: bloomberg.com
