The Biden-Harris administration has announced efforts to achieve 100,000 new affordable homes over the next three years they are using multiple agencies to address affordable housing shortage here’s how they intend to address this.
“The large and long-standing gap between the supply and demand of affordable homes for both renters and homeowners makes it harder for families to buy their first home and drives up the cost of rent. Higher housing costs also crowd out other investments families can and should make to improve their lives, such as investments in education.” HUD and the Biden Harris administration are attempting to provide affordable homes for all Americans they intend to do this in several different ways
– First, they are relaunching partnerships between the Department of Treasury’s Federal Financing Bank and the Department of Urban Development (HUD) in order to increase the supply of quality, affordable rental units.
– Expanding financing through Freddie Mac in order to increase the supply of manufactured housing and two- to four-unit properties (aka, muliti-unit properties
– Limiting sale to large investors of certain FHA-insured and HUD-owned properties in order to prioritize availability of single-family homes for individuals, families and nonprofits.
– Leveraging existing federal funds to help reduce exclusionary zoning and launch educational sessions with local leaders.
– Making funding for affordable housing available under the Capital Magnet Fund, a competitive grant program for nonprofit housing groups and Community Development Financial Institutions.
Hoping to learn from the SBA stimulus of 2020, they want to limit sale to large investors of certain FHA insured and HUD owned properties in order to prioritize availability of single family homes for individuals families and non profits. This is a great idea if you someone who wants to purchase a multi-unit property or build one. They also want to leverage existing federal funds to reduce exclusionary zones and launch educational sessions with local leaders. This means they also want to rewrite the zoning laws in certain areas that have restrictions carried over from decades past. Finally they want to make funding for affordable housing available under the capital magnet fund a compact a competitive grant program for nonprofit housing groups and community Development Fund financial institutions. All really great ideas, but massively short on the actual number count needed. Could it be that they are setting up the frame to iron the kinks before they actually drop some massive efforts through these? We will have to wait and see.
100,000 units over the course of three years period breaks down to about 33,000 units per year……nationwide. So if they intend to help one specific market that’s great, but that is hardly going to impact anything across the county. One way that they could potentially increase the mathematical options is by focusing on multi-unit properties. 100,000 fourplexes could basically quadruple actual number of units.
Inflation is the knee jerk reaction to the economy getting back into its stride, and so those markets need to settle down for lumber and supply prices can get closer to pre-pandemic numbers. In addition, there is a qualified labor shortage in the construction industry that has been hindering developers from delivering more units. If rezoning laws are allowed in certain cities, larger lots can be subdivided into smaller lots and the tiny home or pre-manufactured construction can help deliver reliable and modern homes for the first time home buyer. That would be a huge help in affordable housing.
In Las Vegas we have a unique opportunity with Boxabl being in our backyard. If we can get local zoning laws adjusted, this product might be a a huge win for our local economy and real estate inventory. It might take the weight of the current administration to encourage local leaders to get that done, but if it does, this has the potential of providing enormous help to the increasing number of families unable to purchase in todays real estate market. The median price as of September 2021 is $405,000 for a single family home in Las Vegas. A large portion of the 2.5 million population here in Las Vegas may not be able to afford more than $350,000, so introductory and affordable housing is a huge issue that has not been addressed yet. I expect this conversation to increase in intensity as a a hot topic in the coming months. As a community, we have an opportunity to address this now and help increase the number of homeowners.
You can read the original announcement from the White House here.
Uraine Ordonez Five Diamond Group at Palacios Realty
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