WASHINGTON: “The White House’s status report on the Administration’s Housing Supply Action Plan is an important step forward in the effort to address America’s housing supply and affordability crisis. However, it is also essential that Congress act to expand the Low Income Housing Tax Credit (LIHTC) through the Affordable Housing Credit Improvement Act and enact the Neighborhood Homes Investment Credit, which together will add over 2 million new housing units over the next ten years. Together, these actions would make a significant contribution to closing the housing supply gap, which exceeds 3 million units of affordable housing.
The finalization of the income averaging rule and the extension of deadlines for placed-in-service rules for LIHTC projects will enable the creation of more LIHTC units and help to make projects financially feasible. Both of these changes are responsive to the requests of affordable housing advocates and developers.
The Federal Housing Finance Agency (FHFA) expansion of its Forward Commitment programs for Fannie Mae and Freddie Mac will allow developers to secure financing to pay off construction loans, with each Enterprise now being permitted to provide $3 billion in Forward Commitments annually.
The announcement also notes that the Federal Financing Bank FHA Risk Sharing program has created 9,000 units since the relaunch in September. To further expand the use of the program, HUD should extend FFB Risk Sharing authority beyond its current sunset in 2024.
The Administration also noted changes in Department of Transportation land use policies, which are important initial steps to addressing exclusionary zoning restrictions that local communities use to keep out affordable housing. Racially and economically motivated Exclusionary Zoning is the last bastion of bipartisanship, as common in blue communities as red ones. These policies increase the cost of affordable housing, and require longer commutes that degrade roads and increase global warming. The Federal Government should not be enabling these policies with billions of dollars of transportation funding.
The Department of Housing and Urban Development also announced that 61 percent of federally held note sales were made to non-profit bidders, helping increase the stock of housing for first time homebuyers. We strongly support this policy.
It is clear that the Biden Administration is taking the housing supply crisis seriously. We cannot reduce inflation and avoid a deep recession without significant housing production.