The Biden White House plans to enact policies to encourage the construction of new homes, hoping to combat the country’s shortage of homes and rental units, according to sources who briefed the Wall Street Journal.
Relying on the independent Federal Housing Finance Agency (FHFA), the Biden administration wants to use its power to increase financial funding and construction of homes for Americans over the next several years, the WSJ reported citing a draft proposal it reviewed.
The FHFA regulates Fannie Mae and Freddie Macc, which help stabilize the U.S. housing market through roughly $11 trillion of government-backed mortgages.
“[The changes] should have a meaningful impact,” former Obama housing advisor Jim Parrott told the Journal, “Particularly because they are all focused on the lower end of the market, where there is the most need.”
Construction on new homes has fallen significantly over the last two decades. Although the COVID-19 pandemic has created a small housing boom as Americans eye new locations for affordability and comfort.
One of the White House’s proposals would infuse more dollars into rental projects through the Low-Income Housing Tax Credit, the outlet reported. Another tactic involves competitive incentives for developing affordable housing.
The Biden administration is also considering increasing funding for cheaper, factory-built, manufactured homes instead of those built on a standard parcel of land.
Home prices have jumped about 18 percent in the last year recently because of low supply and high demand, landing the median home price in July at just under $360,000, according to the National Association of Realtors.
The White House could announce the changes it wants to make without legislative action as soon as Wednesday. Meantime, Congress is considering broader policy changes as part of the debate over national infrastructure investments.
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