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Housing affordability – the worst in our lifetime. Congress can help change that in bipartisan legislation.

Housing affordability is the worst it has been in the lifetime of most Americans and there are no indications that it’s going to be any easier to buy or rent a home anytime soon. It’s not hard to understand why many Americans are so cynical and so open to populist voices that compete with each other over who can be the most shrill, reactionary, and dismissive of our economic successes like falling unemployment and rising GDP.

The politics of the economy isn’t easy for any sitting president. The politics of foreign policy isn’t typically any better. When I served as a political appointee at the U.S. State Department, President George H.W. Bush had an approval rating of 89% the day before he gave his Desert Storm victory speech to a joint session of Congress. I remember watching the speech with my boss and mentor, Janet Mullins Grissom, in her office that night. After the President finished, she turned to me and said, “We could lose this election.” I was shocked. “You need to get some rest,” I said. “No,” she replied. “This speech needed to be about Domestic Storm, not Desert Storm. Political capital is like milk in the back seat of a hot car. It goes sour very fast.” 18 months later I was working on my resume, and by November 1992, I needed it. We lost because it was, “the economy, stupid,” not the new world order we built from the ashes of the Soviet Union, the end of the dictatorship of Sadaam Hussein, or peace in Central America or the Middle East. The fact that the economy had already begun to improve meant nothing, because voters didn’t feel it.

People don’t feel productivity or employment (unless they lost their job, which is never the case for most Americans). They certainly don’t feel geopolitics. They feel the price of milk, and meat, and gas, and housing, because it’s the biggest expense of almost any monthly budget. Housing is also closely linked with our perception of upward mobility. There’s an additional cruel twist to inflation. Everyone feels it going up. No one feels it slowing down.  And short of an economic catastrophe, they don’t go back down. Over the past year, wage growth has exceeded inflation by about two points, and Americans have more discretionary income than they did a year ago. The problem is Americans don’t feel it. One of the major drivers of this feeling is housing.

Housing inflation has been a major driver of the Core Consumer Price Index (CPI). Unfortunately, it has been compounded by the failure to effectively address housing supply by multiple administrations, including the current administration, and both parties in Congress over several changes in leadership. This is beginning to change, but will it be too late? Incumbents of both parties will find out next year. We can still reverse this trend, but only if there is adequate political will. Housing can’t be number five on a list of ten priorities, when only three get done. We already have a closet full of participant ribbons.

How bad is the housing affordability in our lifetime? Let’s look at two occupations which represent the heart and soul of the middle class: nurses and teachers. In 2023, a Registered Nurse could afford to buy a home in 90 of 360 markets in the United States. That’s right. According to NHC’s Paycheck to Paycheck database, in 201 markets, 52% of metro areas, buying a home with an income below $100,000 is a non-starter. For middle school teachers, it’s marginally better: 122 markets are affordable. This is because the income needed to buy a typically priced home nearly doubled from $73,778 in September 2021 to $120,951 in September 2023. Two factors drove this increase, an increase in mortgage interest rates from 3.01% to 7.31% and an increase in the median home price from $299,487 to $348,539.  Housing is a continuum. The fewer homeowners, the more renters. And more renters mean higher rents. At the bottom of the economic spectrum, we have more people than ever entering homelessness.

So, it should be no surprise that Phoenix led the nation in rent increases and an increase in homelessness in 2022. We are actually pretty good at helping people out of homelessness. Estimates show that between 2017 and 2020, 901,000 homeless people were successfully housed annually. However, within that same timeframe, 909,000 people entered homelessness each year, and many of them, who woke up in a tent or a car, washed up in a public restroom, and went to work. Do we want to know how many of the people who deliver our groceries, make our coffee, or cook our food are homeless? I’m afraid most of us don’t have a clue and don’t really want to know.

While there is no magic wand to fix this (it took two decades to create this mess and it won’t be solved overnight), our federal leaders have consistently failed to invest in housing programs that would begin to reverse this trend. Let’s explore two pieces of legislation and one well-intentioned but tragically executed policy that are a part of this failure. Two pieces of federal legislation could make a measurable impact on housing production where it is needed the most.

This month, the Affordable Housing Credit Improvement Act (AHCIA) reached a new milestone as 100 Democrats and 100 Republicans in the House of Representatives have now cosponsored the legislation, making AHCIA the House’s most bipartisan tax bill. The list of cosponsors represents nearly 80% of the House Ways and Means Committee and the new milestone puts the legislation closer to gaining the support of a simple majority in the House. Currently, in the Senate, the bill has 30 cosponsors, with 24 more in queue.

In hundreds of communities throughout the country, the cost of rehabbing or building a new home surpasses its value when completed, perpetuating a vicious cycle that keeps neighborhoods underwater and hinders revitalization efforts. The Neighborhood Homes Investment Act (NHIA) creates a federal tax credit that covers the cost between building or renovating a home in distressed areas and the price at which the home can be sold. NHIA tax credits are awarded to project sponsors—developers, lenders, or local governments—through a competitive statewide application process administered by each state’s housing finance agency. As Senator Todd Young (R-Ind.) said in his note to our members earlier this year, in Indiana NHIA would support the construction and renovation of more than 9,000 new over a decade. Senator Young introduced the bill with Senator Ben Cardin (D-Md.) It currently has 10 cosponsors in the Senate, including five Republicans.

The NHIA will be a great resource for red and blue states alike. In cities like Detroit, Cleveland, Indianapolis, and Baltimore, neighborhoods stuck in a cycle of growing blight can be restored. But appraisal gaps are also a critical issue in rural areas. More than one in four census tracts in Kentucky are distressed, according to the NHIA criteria. Overall, 45% of Kentucky’s census tracts qualify compared to 29% nationwide.  In ten years, NHIA could build or rehab 6,300 homes, creating $1.5 billion in development activity, 11,000 jobs in construction and related industries, $700 million in wages, and $151 million in state and local government revenue. An interactive map for most of the country is available at

But time has almost run out. If Congress doesn’t pass a tax bill by January, there won’t be one at all next year. That’s why it’s so imperative that they act now. It’s not too late and it would be a great holiday gift for the American people that would reap political benefits for both parties.

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