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The top industry group representing U.S. homebuilders has praised the Biden administration’s latest efforts to boost the nation’s housing supply, but is calling for further action to eliminate regulations it says stifle new construction.
On Monday, Treasury Secretary Janet Yellen announced a new program that will provide an additional $100 million over the next three years to support the financing of thousands of additional affordable housing units.
“For many Americans, housing is a linchpin of the American dream and a gateway to the middle class,” Yellen said in a speech in Minneapolis. “But high housing costs are impacting a broad swath of working Americans across the country.”
U.S. home prices hit another record high in April, according to the latest Case-Shiller index released on Tuesday. Meanwhile, mortgage rates remain near two-decade highs, raising costs for homebuyers and pushing many to the sidelines.
Tight housing supply is a key factor driving up home prices, with Freddie Mac recently estimating that the country needs at least 1.5 million additional homes, and likely many more, to meet demand.
Yellen said in her remarks that President Joe Biden’s administration “has been focused on taking action to build more housing and lower its cost.”
The new Treasury initiatives also include enhanced guidance for cities and states on how to use COVID-19 pandemic recovery funds to increase the supply of housing, and red-tape reductions for the department’s existing affordable housing investment program.
Homebuilders respond to Biden’s latest initiatives
In remarks provided exclusively to Realtor.com®, Carl Harris, chairman of the National Association of Home Builders, praised the administration’s push to increase the housing supply, but said regulations on new-home construction needed to be reduced.
“We appreciate the Biden administration’s focus on the need to boost housing production to bring down housing costs,” said Harris. “NAHB agrees that the lack of homes is the primary cause of the nation’s housing affordability crisis and that boosting housing production is the best way to make homeownership and renting more affordable.”
He went on to refer to the NAHB’s 10-point housing plan released in May, which proposes steps at the local, state, and federal levels. The group says these steps will “ease the housing affordability crisis by removing barriers that hinder the construction of new homes and apartments.”
“Implementing these practical solutions, which include eliminating excessive regulations, overturning inefficient local zoning rules, and adopting reasonable and cost-effective building codes, will allow builders to increase the nation’s housing supply and bend the rising housing cost curve,” said Harris, who has previously called for curbs on regulations.
For example in April, Harris slammed the Biden administration’s move to block federal insurance for mortgages on new homes unless they are built to energy-efficient requirements from the 2021 International Energy Conservation Code.
At the time, the NAHB chairman called the nationwide mandate “senseless” and argued that it would significantly raise housing costs while doing little to curb overall energy usage.
For its part, the Biden administration has said that the new rule “will yield significant [utilities] cost savings for residents, reduce energy use and pollution, improve resident health and comfort, and increase resilience in extreme weather events of both single and multifamily homes.”
Biden emphasizes affordable housing efforts as he seeks reelection
Yellen’s announcement on Monday was the latest push from Biden’s Democratic administration to grapple with the hot-button issue of housing affordability as he seeks reelection in a rematch with Republican Donald Trump.
Earlier this year, Biden made a slate of proposals to lower housing costs across the country by funding the construction of millions of new homes, offering down payment assistance to first-generation homeowners, and cracking down on “rent gouging by corporate landlords.”
Speaking in Minneapolis, Yellen called on Congress to support Biden’s proposals, including a plan to provide a tax credit totaling $10,000 to first-time homebuyers.
“The federal government cannot address this challenge alone. We need Congress to act,” said Yellen, speaking at a newly completed affordable housing development in Minneapolis.
For his part, Trump has opposed relaxing single-family zoning restrictions to allow more density in the suburbs, saying it will “destroy your property values.”
The Republican candidate has instead proposed opening up some federal land to build new cities. His campaign also told NPR that he plans to cut regulations and end “the unstainable [sic] invasion of illegal aliens, which is driving up housing costs.”
During his time in the White House, Trump proposed massive cuts to federal affordable housing programs, though those plans were largely dismissed by Congress.
Biden and Trump will meet on Thursday night for the first of two scheduled presidential debates.