President Biden announced a plan Monday to increase the supply of housing and combat soaring costs by preserving affordable units and using federal funding to reward states that use their zoning and land-use laws to provide more options.
Mr. Biden wants to close the housing shortfall, estimated at 1.5 million homes nationwide, within five years.
The administration said the crisis is years in the making but is hitting hard amid pandemic shocks and soaring inflation.
“As President Biden said last week, tackling inflation is his top economic priority. Today, President Biden is releasing a Housing Supply Action Plan to ease the burden of housing costs over time, by boosting the supply of quality housing in every community,” the White House said in a fact sheet. “This is the most comprehensive all-of-government effort to close the housing supply shortfall in history.”
The White House said local zoning laws often constrict the amount of land available for housing, so it will use grant funding from the bipartisan infrastructure law and Department of Transportation to reward places that promote housing density and rural main street revitalization.
The plan would increase federal subsidies for factory-built manufactured homes, and the government-controlled mortgage company, Freddie Mac, may purchase so-called chattel loans that owners of these homes use.
Among other steps, federal agencies will also launch a pilot program to assist the construction and renovation of small accessory dwelling units (ADUs), such as garage apartments or other standalone buildings on the same lot as a larger structure.
“Fewer new homes were built in the decade following the Great Recession than in any decade since the 1960s – constraining housing supply and failing to keep pace with demand and household formation. This mismatch between housing supply and housing demand grew during the pandemic,” the White House said. “This shortfall burdens family budgets, drives up inflation, limits economic growth, maintains residential segregation and exacerbates climate change.”