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The REALTOR® voice is moving the needle on Capitol Hill as the housing inventory and affordability crises come into clearer focus and lawmakers realize they must support legislation to boost homeownership. “Be encouraged because you are making progress,” Sen. Todd Young (R-Indiana) told REALTORS® last week at the NAR Policy Forum in Washington, D.C. “And we continue to make progress with your help.”
The forum, which brought together economists, housing analysts and policymakers, highlighted several pieces of housing legislation on the table in Congress and backed by the National Association of REALTORS®. The proposed More Homes on the Market Act, for example, would increase the capital gains tax exclusion and incentivize longtime homeowners to sell. Other legislation is under consideration for tax credits that would attract private investment to rehab owner-occupied homes and convert empty office buildings into residential properties.
“The National Association of REALTORS® is working tirelessly in Washington to ensure that the next generation and those who have historically been shut out of homeownership have access to the vital wealth-building opportunities that are created through homeownership,” said NAR Vice President of Advocacy Nate Johnson. “Our advocacy work has scored a number of important wins. For years, NAR has worked with the Federal Housing Administration to reduce mortgage insurance premiums—and the FHA did so last year, helping to bring homeownership within reach for many more Americans.”
Likewise, NAR successfully fought against potentially devastating fee increases proposed by the Federal Housing Financing Agency that would have raised the cost of homeownership. The association also works with groups like the American Property Owners Alliance, Black Homeownership Collaborative and Mortgage Bankers Association to advocate for credit-scoring reforms, including allowing positive rental payments to count toward creditworthiness.
Young, a cosponsor of the Yes In My Backyard Act, which aims to increase production of affordable housing, talked about the town of Elkhart, Ind., known as the “RV capital of the world.” Demand for RVs spiked during the COVID-19 pandemic, and now the local industry doesn’t have enough workers to meet the need. “If we’re going to remain consistent with our self-image in this country as the land of upward mobility and opportunity, housing is such an important part of that,” Young said. “Right now, not enough people can get on that escalator, especially for the entry-level homes. They’ll either have to delay those investments or not make them for a long period of time.”
Still, more solutions are necessary to solve affordability challenges for consumers struggling under high home prices. Susan Wachter, professor of real estate and finance at the Wharton School of the University of Pennsylvania, said zoning and land use reform would enable more building densification, manage rising insurance costs, and shepherd investment in affordable architecture and construction methods.
Interest rates for construction loans have soared as high as 13%, making it more difficult to finance new building projects, said JP Delmore, assistant vice president at the National Association of Home Builders. Proposals like the Neighborhood Homes Investment Act and other tax incentives for small businesses would help to support construction financing, he said. Appraisal reforms also are needed to ensure home values aren’t too high for home buyers to access a mortgage, he added.
Doug Austin, founder and CEO of AVRP Studios, an architectural planning firm, discussed a program in California to convert 40,000 acres in San Diego owned by faith-based organizations to provide housing through nontraditional financing. “We are going to do it with 100% private financing,” he said. “We are going to contribute money that does not need to be paid back and provide pro bono services to do feasibility studies and provide funding for that early-on architecture planning,” relieving the upfront costs of building. AVRP Studios’ efforts are helping to construct duplexes for veterans, with an average cost of $250,000 a unit for the homeowner.
Dave Snyder, vice president and assistant general counsel at American Property Casualty Insurance Association, said rising insurance costs and an increase in natural disasters are creating challenges for both real estate agents and insurers. “We are both consumer-facing, and we are all affected by business cycles that are outside of our control.” In 2023, the insurance industry faced 24 natural disasters in the U.S. that each totaled around $1 billion in losses, which compares to an average of seven or eight a year between 1980 and 2021, Snyder added.
The good news is that housing is a foundational issue that both major political parties have an interest in, said Dennis Shea, executive director of the bipartisan J. Ronald Terwilliger Center for Housing Policy. So, movement on housing legislation is likely to become faster. “We see the most bipartisanship on the side of supply,” Shea said. “In the past 50 years, the U.S. has underbuilt housing by millions of homes. Members of both political parties now understand that the mismatch between the demand for housing and available supply is at the core of today’s availability crisis.”