Affordable housing crisis looms large in election

One economic issue looms large in the upcoming election, as President Biden appeals to young voters and bucks negative views about his handling of the economy. It’s a historic shortage of affordable housing.

Even though the cost to buy a home has just reached an all-time high and rental prices are slightly down from their 2022 peak, Americans in red and blue areas alike are feeling the pinch.

a white house report A study released in March found that since 2000, incomes have doubled, but home prices have tripled. This means that house prices have risen 50% faster than incomes over the past 20 years. The median home price recently hit $383,725, an all-time high, up 5.2% from a year ago, according to real estate firm Redfin.

The average 30-year fixed mortgage rate is rising again above 7% as recent inflation and strong economic data delay the Federal Reserve’s timeline for reducing borrowing costs. In the United States, there is a housing shortage of nearly 4 million units. to recent research By Up For Growth, commissioned by the American Planning Association.

Casey Dawkins, a professor of urban studies and planning at the University of Maryland, has identified two causes of rising home prices that date back to several presidential administrations.

“New housing production declined dramatically during the 2007-2010 foreclosure crisis and has not recovered since. “There are several possible factors, including local land-use regulations that increase costs, costs, and uncertainty,” Dawkins wrote.

“With increasing income inequality, more people today are earning less than they need to buy a decent home.”

In this housing market, it’s no surprise that the lack of affordable housing is weighing on voters. Just over 53% of homeowners and renters say housing affordability will influence who they vote for in the next presidential election. According to the report Released by Redfin in March.

“I think that just shows that [housing affordability] People’s perceptions of who they want to vote for weigh on them,” Darryl Fairweather, chief economist at Redfin, told The Hill.

Biden is battling negative views about his handling of the economy as he prepares for a rematch with former President Donald Trump, the likely Republican nominee. The paper found that only 34% of voters approve of how Biden is handling the economy, while 29% approve of his handling of inflation. Recent CNN pollIt also revealed that Trump has a 6-point lead over the incumbent.

Shelter costs remain a major drag on persistent inflation, which rose 3.5% in March from a year earlier, according to the latest data released by the Labor Department. Shelter costs rose 5.7% year-over-year, accounting for 60% of the total annual increase, and were “the largest contributor to the monthly increase in the index for all items except food and energy.”

High interest rates, which the Fed raised to a 22-year high last summer, are also pushing up borrowing costs. The central bank said no rate cuts are expected on Wednesday and has signaled it will delay its rate cut schedule, meaning home buying costs are likely to remain high for longer than initially expected.

The president spent valuable time in this year’s State of the Union address touting his administration’s efforts to make housing more affordable. ” said Jeb Mason, a partner at Mindset and a former Treasury official during the administration of former President George W. Bush.

Biden’s budget proposal for next year, which was dead when it arrived in the Republican-controlled House, includes expanding the low-income housing tax credit, creating a new neighborhood housing tax credit and providing housing subsidies. It included several provisions aimed at lowering housing costs. Encourage states, local governments, and tribes to build more housing.

The president also urged Congress to pass provisions directly targeting first-time homebuyers, including funding for mortgage relief credits and down payment assistance programs.

Congress is considering a number of measures to ease the soaring housing prices that are weighing on the constituency. While some lawmakers crossed the aisle during recent hearings on housing affordability, there are several bipartisan proposals this Congress.

Such measures include Sen. Tina Smith’s (D-Minn.) and Sen. Mike Rounds’ (R.S.D.) Rural Housing Services Reform Act. Representatives Darin LaHood (R-Ill.) and Susan DelBene (D-Wash.), and Sens. Maria Cantwell (D-Wash.) and Todd Young (R-Ind.) are low. Affordable Housing Credit Improvement Act. Representative Mike Kelly (R-Pennsylvania), Congressman Brian Higgins (New York), and Senator Ben Cardin (D-Md.) Young’s Neighborhood Housing Investment Act.

“There’s a bipartisan appetite to do something,” said Mason, who advises businesses, policymakers and other stakeholders on housing and financial regulation issues. “I think it’s about what can realistically be done in an election year.” Campaign mode. ”

“We often hear from people who are dissatisfied,” Rep. Jimmy Gomez (D-Calif.), chairman of the Congressional Renters Caucus, told The Hill. Gomez represents the part of Los Angeles that a Redfin study found has the highest median home prices and a HUD report found to have the second-highest homeless population after New York City.

“Homeownership is at the core of the American Dream, but for many Americans, homeownership is out of reach and they are forced to rent instead.” said Gomez, who is working on a significant increase in the amount.

“Maintaining current federal standards is woefully inadequate and falls short of the scope of our current housing crisis,” he said. Gomez also recently proposed a new monthly tax credit specifically aimed at middle-class renters, a tax credit that would put money directly into working people’s pockets to bridge the gap between income and rent.

But Fairweather said, “Many of the things that seem comprehensive, like homebuyer credit and down payment assistance, don’t solve the problem.”

“In fact, we have to solve the supply problem,” she said.

Angela Brooks, president of the American Planning Association, a membership organization for urban planners and other planning professionals, told The Hill that increasing the supply of housing is “a national challenge that requires a national response.” “I’m working on it,” he said.

“In many cases, neighborhoods are held back by local opposition that fears change. And while housing measures are a priority in many states, the efforts needed to alleviate supply issues are lacking. It’s not happening fast enough, and that’s where our federal partners can play a big role. Housing and zoning reform is one of the few issues that currently has bipartisan support in Congress.” Told.

Rep. Nanette Diaz-Barragán (D-Calif.), co-chair of the Congressional Caucus on Homelessness and who represents parts of Los Angeles, told The Hill, “This is an important investment and protection for our community. Congressional action is needed to provide this.” Providing more affordable housing and keeping families housed. ”

State and local governments are struggling to manage the growing number of homeless people in their communities. More than 653,000 people experienced homelessness last year, according to a report released by the Department of Housing and Urban Development (HUD) in December. Recorded the highest. ).

“Congress will create more flexibility and invest more in federal programs like Housing Choice Vouchers, HOME, and the Homeless Assistance Grant Program, provide strong protections for tenants, and reform federal regulations that impede the rights of local partners. We can and should do our part. We can increase the supply of affordable housing,” Barragan said.

But some cities and states have turned to more punitive measures, such as fines and arrests, and the Supreme Court issued a controversial decision last week that could strengthen its authority to enforce anti-vagrancy and anti-camping laws. He heard the lawsuit.

Dawkins doubted whether a crackdown on the homeless population would solve the nation’s housing crisis.

“Punishing unsheltered people for sleeping in public places does nothing to alleviate the national homelessness problem. We encourage unsheltered people to relocate to other communities. “Forcing them to do so just changes the geography of the problem,” Dawkins said. “In order to house more people, we need to build more housing.”