By Stephanie Mojica
U.S. President Joe Biden has amped up his efforts to increase affordable housing in the country in response to the housing shortage, multiple media outlets reported. Biden’s plan, which was unveiled on Monday, May 16, 2022, may incentivize real estate investors to build more multi-family housing and steer them away from purchasing single-family homes, according to The Wall Street Journal.
Home prices and inflation, as well as several years of hampered home construction, have contributed to Biden’s plan, per Scotsman Guide. However, it could take up to five years for the plan to become reality.
Since the 1970s, it has been increasingly difficult to build affordable housing due to costs and zoning regulations, The Wall Street Journal reported. “Tiny homes” are a rapidly growing trend, but many cities have next-to-impossible requirements for permits, parking, and the like.
Under Biden’s plan, a number of reforms and new initiatives could take place, including:
- Rewarding jurisdictions that relax their zoning and land use requirements.
- Improving the benefits of the Low Income Housing Tax Credit (LIHTC) program, which is geared toward affordable rental housing.
- Encouraging state, local, and tribal governments to use some of their COVID-19 funds to create more affordable housing units.
- Developing new types of mortgages and improving existing programs to allow more flexibility.
- Increasing the number of owner-occupants in single family homes.
- Discouraging investors from purchasing single-family homes, which critics say is driving up housing prices to the point where everyday people cannot afford to buy a home of their own.
- Increasing financing for investors who pursue developing and rehabbing multi-family properties.
Also, members of the Biden administration say they are meeting with stakeholders in the building industry to find out what it will take to complete more homes by the end of 2022. The increased price of building materials as well as labor shortages have been blamed for the dramatic decrease of new construction in 2022.