America has a housing problem—inventory is low and millions have been priced out of homeownership.
There reportedly are fewer homes available for sale or rent than at any time in about 30 years. Construction costs are way up and, despite a minor month-over-month decrease in May, home prices remain at all-time highs.
The Biden administration's American Jobs Plan provides a mix of tax credits, grant programs, incentives for zoning reform, public-private partnerships, and other direct spending intended to "produce, preserve, and retrofit more than two million affordable and sustainable places to live ... ," according to the White House.
It is a plan two well-informed housing and finance experts—respectively, Urban Institute's Jim Parrot and Economist Mark Zandi—call the "most significant housing policy effort in a generation."
Affordable housing is an essential piece of economic infrastructure in the United States, the authors noted this week in an op-ed for CNN, and that “without it, families are cut off from opportunity, leaving them underemployed and companies struggling to find the workers they need to compete.”
They say the current lack of affordable homes is forcing households away from good jobs and limiting economic opportunity.
Parrot and Zandi write that "it is a relief to see policymakers finally focus in earnest on the nation's crumbling infrastructure," but they call some policymakers' lack of attention to affordable housing "unnerving."
"If Congress is to take overhauling infrastructure seriously, it has to tackle the shortfall," the experts wrote. "Economic infrastructure in the United States is largely comprised of the structures and systems needed to connect people, companies, and markets. When it functions well, businesses are more productive and competitive, more people participate in the workforce and the economy is stronger."
According to Urban Institute's analysis, supply is so far behind the demand that homebuilders would have to double this year's production of new homes to catch up, Parrot and Zandi point out.
And the shortage, according to the authors (and regular data from Urban Institute), disproportionately affects Black and Latinx Americans.
"Today, less than half of Hispanics own their home and only about two in five Blacks own theirs, a level not seen in decades."
The experts believe the Biden plan, while it may have some shortcomings, can help, but they argue many members of Congress are not focused enough on housing.
"While a patchwork effort, the mix of tools is necessary given the wide range of challenges that make it difficult to build in communities across the country. If the plan has a weakness, it's the relatively modest effort to ease exclusionary zoning and prohibitive development fees. Nonetheless, Biden's plan is the most significant housing policy effort in a generation, and entirely appropriate given the scale and importance of the problem.
They continue: "Unfortunately, Congress has yet to focus on this part of the administration's infrastructure package. Some members of Congress have chosen to focus instead on broadband and research and development. Others choose to define the very idea of infrastructure so narrowly—strictly roads, bridges, and the like—that the housing supply problem disappears altogether. Congress' response, in other words, has been as frustrating as the administration's has been hopeful."
The full op-ed is available on CNN.com.
The U.S. Department of Housing and Urban Development issues a press release announcing the op-ed's publication, an indicator that HUD leadership is on board with Parrot and Zandi's opinion.