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Biden green-lights a home-building boom. But there’s a catch

The Biden administration has a plan to fast-track housing construction. But much of it depends on Congress.

Biden green-lights a home-building boom. But there’s a catch
[Source Image: homeworks255/Getty Images]

The U.S. is at least 1.5 million houses in the hole. Demand for homes—especially affordably priced ones—has outstripped supply for years. The economic hit of the pandemic has only made things worse, pushing more people to the brink of eviction, foreclosure, or homelessness.

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This week the Biden administration announced a multipronged plan to chip away at these challenges. The so-called Housing Supply Action Plan aims to build or preserve hundreds of thousands of units of affordable housing within the next three years, and fast-track the construction of homes this year in order to hit the highest rate of housing production since 2006. Funding is being targeted at zoning and land use reforms that spur higher-density housing, and incentives are being proposed to spur innovation in manufactured housing, the construction of accessory dwelling units, and the rehabilitation of existing affordable homes to be more energy efficient.

The plan is being celebrated in the world of affordable housing advocacy, real estate, and home building. This mad dash to build much-needed affordable housing is seen by many as a much-needed kick in the pants for an industry equally reliant on big builders and federal financing.

The administration’s plan includes several executive-level orders that can activate the industry quickly. One directs pandemic recovery funds to develop affordable housing. Another eases federal financing to encourage broader access to alternative forms of housing, including ADUs (accessory dwelling units) and manufactured homes. These efforts can add more housing stock to the nation’s supply relatively quickly, and can grow the number of people able to access financing.

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But much of the proposal stands on shakier ground. Legislative approval—particularly bipartisan collaboration on a budget to fund costly programs that run into the tens of billions of dollars—is needed but far from guaranteed.

The National Association of Realtors (NAR) is not alone in recognizing the plan’s reliance on both executive and legislative action. National Low Income Housing Coalition president and CEO Diane Yentel says the plan’s focus on increasing the supply of housing will need both the administration and Congress to step up. “These investments and policy changes can and should also support sustainable development,” Yentel told Fast Company via email. “By preserving our nation’s public housing stock, for example, Congress and the White House can both ensure that this community asset is available for future generations while also contributing to improved energy efficiency in aging buildings.”

Some of what Biden’s plan proposes will be implemented immediately. But many of the programs in the housing plan will require congressional action. They could be covered by Biden’s proposed $5.8 trillion budget for 2023, which faces a rough few months of congressional debate in this midterm election year. That version of the budget is highly unlikely to pass; housing funding, in the form of the budget for the Department of Housing and Urban Development, regularly falls billions of dollars short of what is initially proposed. If a significant amount of the budget’s housing funds make it through, the administration has a clear game plan to quickly carve away at the housing shortages that plague communities across the country. If not, the Housing Supply Action Plan could end up another half-hearted effort to solve a problem that transcends politics.

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