Addressing Housing Affordability Challenges in the U.S.

REALTORS® has been working with authorities to create expanded housing options.

Sharp increases in home prices and a lack of housing inventory in the U.S. have resulted in a housing affordability crisis, where both rental homes and homes for purchase are beyond the reach of low- and middle-income families.

To address this watershed moment in real estate, the Department of Housing and Urban Development (HUD), with Secretary Ben Carson taking the lead, has been hosting meetings to discuss these matters with issue experts. HUD also published a Request for Information (RFI) to solicit ideas from the real estate industry and brainstorm solutions.

In comments submitted to HUD, the National Association of REALTORS® (NAR) stressed that affordable housing is critical to America’s communities and businesses. To address housing affordability issues, NAR offered HUD a series of policy considerations that encourage all market players to collaborate to provide safe and affordable housing. These included:

• Enhancing Mortgage Market Liquidity – Re-focus the mission of Fannie Mae and Freddie Mac on providing liquidity in the mortgage markets for low- and middle-income homebuyers.

• Reforming the CRA – Clarify existing regulations under the Community Reinvestment Act (CRA) so banks can receive “credit” for serving the lending needs of middle-income households.

• Incentivize YIMBY – Foster a “Yes in My Backyard”—or “YIMBY”—market to encourage states and localities receiving federal dollars to reform high-density zoning and other land-use rules.

• Community Development Block Grant (CDBG) Funds – Encourage states and localities to update their comprehensive housing and development plans to address barriers to housing affordability. If they do so, they receive additional CDBG funds.

• Accessory Dwelling Units (ADUs) – Allowing for development of ADUs is a simple way to increase density and affordable housing. State and local laws can protect the rights of property owners and concerns of neighbors about increased traffic or demand for resources.

NAR also commended the Administration for the work it has already done to improve housing affordability. Since May 2019, HUD has taken several actions, including:

• Finalizing the FHA Condo Rules – Condos are often the most affordable option for first-time buyers, urban dwellers and those wishing to downsize. HUD’s reform of FHA’s condo rules should yield thousands of new homeownership opportunities and help alleviate affordability restraints impacting markets across the country.

• Repealing and Replacing WOTUS – The Administration repealed the 2015 Waters of the U.S. (WOTUS) rule and replaced it with a common-sense regulation that more clearly defines the regulatory limits of the Clean Water Act. The Navigable Waters Protection Rule will provide predictability and reduce red tape and lower costs for real estate developers, which will lead to the construction of more homes in all real estate markets.

• Creating Qualified Opportunity Zones – NAR applauds the creation of the White House Opportunity and Revitalization Council, chaired by Secretary Ben Carson. Opportunity zones have great potential to address housing affordability across our country. HUD has also provided additional incentives for development in opportunity zones through FHA products.

Although there is no single solution to promoting housing affordability and increasing housing supply, NAR does believe that a broad-based policy approach to bring safe, decent and affordable housing to low-income households, as well as methods to enhance the availability of affordable middle-income housing, can be achieved. We look forward to working with HUD and our partners in the real estate industry to reach these goals and improve access to the American Dream of homeownership. 

Russell Riggs is NAR’s senior environmental policy representative. For more information, please visit www.nar.realtor.