Proposed Federal Actions on Housing Fail to Address Inadequate Supply

A set of proposed policies would give tax relief to homebuyers and owners, but experts say a mismatch between supply and demand remains at the root of the crisis.

1 minute read

March 12, 2024, 8:00 AM PDT

By Diana Ionescu @aworkoffiction


Square wood-frame home under construction.

Jandrie Lombard / Adobe Stock

The Biden administration is proposing several actions to improve housing affordability, including a pair of new tax credits, report Bryan Mena and Anna Bahney for CNN. The credits would include a $10,000 credit for middle-class home buyers and a $10,000 credit for existing homeowners who sell their ‘starter homes’ at a price below the local median.

“Rent is 30% higher today than it was before the pandemic, and home prices are now more than 40% higher.” Meanwhile, the nation faces a shortage of between 1.5 million and 7.2 million homes, signaling that policies that address demand do little to impact the low supply of housing.

According to a report from the Federal Reserve, “In the long term, despite a surge in construction in late 2020 and 2021, it appears that a variety of factors — including zoning and other regulatory hurdles — have prevented construction from keeping up with underlying demand, resulting in a gross housing vacancy rate that is at a historical low.”

Friday, March 8, 2024 in CNN

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