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The nation faces a shortage of 5.5 million homes, a gap so large it would take more than a decade to close, even if new-home construction accelerates, according to research from the National Association of REALTORS®.
The Biden administration on Monday unveiled a plan that calls for legislative and administrative actions to try to close America’s housing shortfall within five years.
The plan includes steps to create and preserve hundreds of thousands of affordable housing units in the next three years, including policies aimed at reducing housing costs and ensuring affordability, such as rental assistance and down payment assistance. It also calls for boosting the housing supply by rewarding areas that have reformed their zoning and land-use policies by offering higher scores in certain federal grant processes.
The plan also includes an outline for working with the private sector to address supply chain challenges and improve building techniques with the goal to “finish construction in 2022 on the most new homes in any year since 2006.”
NAR President Leslie Rouda Smith welcomed the administration’s focus on addressing the housing supply shortage and said calls are growing more urgent for more to be done.
“With rising mortgage rates and a persistent shortage of affordable homes, the dream of homeownership is limited for many middle-income, first-time, and first-generation home buyers,” Rouda Smith said. “Urgent action is needed to tackle our nation’s housing supply crisis.”
Rouda Smith says that a “comprehensive action” is needed that includes zoning reforms, investment in new construction, as well as expansion of financing and tax incentives to spur investment in housing and convert unused commercial space to residential.
“For too long, land use restrictions have driven up the cost of housing for too many,” Rouda Smith says. “NAR supports policies encouraging states and localities receiving federal dollars to explore high-density zoning and other land-use rules that lock out families. We also support new grant programs for localities to enact pro-housing policies.”
In April, at an event sponsored by think tank Third Way, Bryan Greene, NAR’s vice president of policy advocacy, joined Gene Sperling, American Rescue Plan Coordinator and senior adviser to the president, and Erika Poethig, special assistant to the president for housing and urban policy, to discuss solutions to the housing supply and affordability crisis. Greene spotlighted NAR’s policy proposals for increasing housing inventory. Read more about the event.