Economists in the Biden administration are urging more aggressive federal action to reduce costs for home buyers and renters, addressing a major economic challenge for President Biden as he seeks re-election.
The White House report released on Thursday proposes policy changes that could involve federal intervention in local politics to ease zoning restrictions hindering affordable housing construction.
These recommendations are part of a comprehensive analysis of a longstanding housing crisis that is impacting the president’s chances for a second term. If re-elected, these proposals could form the basis of a significant housing initiative.
The report outlines various measures to lower the cost of housing for both renters and buyers, while also encouraging local governments to adjust zoning laws to allow for more affordable housing development.
Jared Bernstein, the chairman of the White House Council of Economic Advisers, emphasized the importance of addressing land use regulations in the affordable housing space to make a substantial impact.
The administration believes that many local leaders are receptive to increased federal involvement in zoning reform, potentially overriding objections from local groups opposing development.
The report provides statistics showing the growing housing stress for American families and how it has become a political liability for Mr. Biden.
While the administration acknowledges limitations in influencing local zoning rules, most recommendations involve using federal incentives to encourage local governments to facilitate more housing construction, including affordable and starter homes.
Given the current political landscape, it is unlikely that these policies will be enacted this year, with an upcoming election and Republican control of the House.
The focus on housing and the comprehensive set of policies to enhance supply and affordability could lay the groundwork for a bipartisan effort on the issue if Mr. Biden wins re-election, fueling ongoing housing reform efforts across state legislatures.
The report highlights how home prices have outpaced wage growth, making homeownership unattainable for many middle-income families and pushing lower-income renters towards poverty.
A significant portion of tenants now spend more than half of their income on rent, underscoring the severity of the affordability crisis in housing.
The housing shortage, aggravated by limited construction and restrictive zoning rules, has become a bipartisan concern among lawmakers.
The disappearance of affordable housing options particularly impacts lower-income families, while the market sees a decline in lower-cost starter homes and apartments.
In recent weeks, Mr. Biden has emphasized housing as a crucial issue, aiming to demonstrate his commitment to easing financial burdens on voters. He has also advocated for federal investments in housing supply and tax credits for homebuyers.
The hope is that Federal Reserve actions to lower interest rates will lead to decreased mortgage rates and potentially lower home prices if new housing supply enters the market.
Mr. Biden has publicly championed these initiatives, urging lawmakers to act on increasing housing supply and supporting homebuyers through tax incentives.
Despite challenges, the administration remains committed to addressing the housing crisis and implementing policies to enhance affordability for Americans.