How Much Influence Can the Federal Government Have on the Housing Crisis?

[Updated: August 19, 2019]

An article by Solomon Greene raises the question of whether deregulation can solve the affordable housing crisis, and, more specifically, whether the federal government can play a hand in that deregulation.

The Trump administration is making at least initial gestures toward trying to do just that. In June, President Donald Trump signed an executive order establishing the "White House Council on Eliminating Regulatory Barriers to Affordable Housing." Democratic candidates for president are also pushing for fewer regulations as one tool for combating the rising costs of housing. The New York Times Editorial Board yesterday announced its support published an editorial supporting the idea of more construction as one potential solution to housing affordability.

"This embrace of deregulation merits particular praise because the states most resistant to allowing housing construction are the strongholds of the Democratic Party, in the Northeast and along the Pacific Coast, and the most resistant voters are the wealthy residents of those states who provide so much of the funding for Democratic presidential campaigns," according to the editorial.

Returning to the earlier article, Solomon builds a case that the federal government has multiple avenues by which it can influence the housing market, including subsidies, ending or prohibiting exclusionary barriers, identifying the helpful regulations among the harmful, and supporting bottom-up initiatives. On that last point, Solomon writes:

Effective policies will also require a strong emphasis on community engagement from the outset, and ongoing monitoring of implementation and evaluation of outcomes. The federal government used this model under the Sustainable Communities Initiative and began to apply it more broadly through the US Department of Housing and Urban Development’s Affirmatively Furthering Fair Housing rule before Secretary Carson suspended its implementation. Mining lessons from each of these efforts will be key to the success of new initiatives.