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Ryan Herron/E+/Getty Images May 16, 2022 Zach Wichter is a former mortgage reporter at Bankrate. He previously worked on the Business desk at The New York Times where he won a Loeb Award for breaking news, and covered aviation for The Points Guy. Suzanne De Vita is the mortgage editor for Bankrate, focusing on mortgage and real estate topics for homebuyers, homeowners, investors and renters. Bankrate logo The Bankrate promise
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The administration recognizes that exclusionary zoning is a big barrier to new development, and the first section of the plan looks at expanding new-construction possibilities. A large portion of the proposals in this bucket include reforms that encourage transit-oriented development. New funding for such projects became available as part of the bipartisan infrastructure law, but the administration’s plan pushes that further: The Department of Transportation will increase its financial support for residential development near transit corridors. This section also includes updated funding guidelines from other agencies, meant to encourage higher-density development. Financial reforms and updates
Another big barrier to development, according to the Biden administration, is a lack of simple for new projects, particularly single-family and two- to four-unit properties and manufactured housing. The new plan calls for streamlining existing federal programs to make it easier for developers to fund eligible projects and promote construction of more affordable housing. The plan also announces changes meant to encourage construction of both single- and multi-family homes in rural areas. On the consumer side, the administration will expand eligibility for financing. The plan also aims to boost by financing more than 800,000 rental units for low-income tenants, and strengthening the Low-Income Housing Tax Credit. Preserving access for owner-occupants
In announcing the plan, the administration acknowledged that institutional investors have been on a property buying spree in recent years, accounting for more than 25 percent of all purchases in some months of last year. For HUD-owned properties, the administration is focusing on selling to would-be owner-occupants or mission-driven nonprofits that encourage homeownership. HUD is also expanding its plans for counseling new homeowners and updating technical assistance in a broad array of categories aimed at helping promote new homeownership. Addressing material and labor costs
During the coronavirus pandemic, supply chain issues led to a huge spike in the cost of construction materials, and the cost of labor also jumped as employees sought more flexible schedules and other changes. The plan calls for new partnerships with private-sector companies to improve supply chain efficiency and promote new housing technologies including prefabricated homes, which will help encourage more new construction. The administration will also take steps to promote the building trades as high-paying, skilled fields in an effort to bolster the workforce. Bottom line
The housing shortage is an intractable issue that affects large swaths of the population and the economy. With the Housing Supply Action Plan, the Biden administration hopes to encourage new development across the country. SHARE: Zach Wichter is a former mortgage reporter at Bankrate. He previously worked on the Business desk at The New York Times where he won a Loeb Award for breaking news, and covered aviation for The Points Guy. Suzanne De Vita is the mortgage editor for Bankrate, focusing on mortgage and real estate topics for homebuyers, homeowners, investors and renters. Related Articles