Biden Administration Housing Programs

Introduction

With home prices reaching a peak, the Biden administration has unveiled plans to tackle the issue of increasing housing costs through a series of innovative programs aimed at boosting supply.

Government Initiatives

The White House revealed that various federal agencies will be leveraging government programs to incentivize the construction of affordable rental and manufactured housing. In addition, the federal government will be allocating nearly $4 million in research grants to explore creative solutions to enhance housing inventory, such as office-to-residential conversions.

Housing Shortage

The U.S. is currently facing a significant shortage of homes, stemming from years of insufficient building. Data indicates that the country lacks 2.5 million homes, including both single-family residences and apartments, based on household formation in 2023.

Impact on Prices

The scarcity of housing inventory has contributed to record-high home prices in the U.S. Many homeowners who made purchases during the pandemic are now constrained by their low mortgage rates, making them reluctant or unable to sell.

Construction Boom

The number of apartments under construction has surged to its highest level since the 1970s, resulting in lower rents and reduced housing costs for renters.

Addressing Affordability

Despite the positive trends, Adrianne Todman, Deputy Secretary of the U.S. Department of Housing and Urban Development, acknowledged that more needed to be done to address housing costs for renters and potential homebuyers. The new policies aim to ensure access to affordable rental units for the American populace.

Future Plans

Among the initiatives announced is an extension of a risk-sharing program between the Federal Housing Administration and the Federal Financing Bank. This initiative enables state and local housing-finance agencies to provide FHA-insured multifamily loans at decreased interest rates to facilitate the construction of affordable rental housing.

Program to Increase Affordable Housing Availability

"Building housing is expensive," Todman expressed. "What this program will do is not necessarily make it less expensive to build the housing, but allow there to be more federal resources involved in building the units, thereby making it more affordable for families to live there."

Housing Unit Projection

The extension aims to construct approximately 38,000 housing units over the next decade, as estimated by the FHA.

Benefits for Renters

"From a renter’s perspective, what they will see is more units coming online in their neighborhoods, across states, and more opportunity to find a rental unit that is affordable to them," Todman added.

Manufactured Homes Initiative

The federal government is also focusing on increasing the availability and affordability of manufactured homes—homes built off-site at factories before being moved to their permanent location.

Under the new policy, HUD plans to update how it calculates loan limits for the manufactured-home loan program. This update aims to make it more feasible for people to purchase such homes and incentivize lenders to participate in the program and provide loans to potential buyers.

Around 22 million people currently reside in manufactured housing, according to government data.

Support from Housing Policy Experts

"Manufactured homes are an important part of the nation’s lower-cost housing stock, yet many families, especially historically underserved communities, lack access to safe and affordable financing for these homes," stated Rachel Siegel, senior officer with the nonprofit Pew Charitable Trusts’ housing-policy initiative.

Siegel further emphasized that the announcement represents "a major step towards improving access to financing for thousands of American families that are shut out of today’s housing market."

Additional Initiatives by the White House

In addition to the housing program, the White House announced measures such as banning fees like application and screening fees for government-subsidized housing vouchers; implementing new policies to reduce evictions; and safeguarding renters from inaccurate tenant-screening reports.

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