Purchasing a home today has proven to be a difficult feat and it’s even more challenging for first-time buyers seeking affordable homes. President Joe Biden’s proposed $2 trillion infrastructure plan could make it easier for both first-time buyers and those seeking affordable housing, says the Washington Post. Under the plan, more than 2 million homes and commercial buildings across the country would be preserved, retrofitted, or built, in addition to incentives for easing zoning restrictions. A Georgia State University housing professor who studied hypervacancy neighborhoods—areas with a unit vacancy of 8% to 10%—says many of the areas never recovered from the Great Recession.
“There’s also a racial justice and [an] economic justice angle to this,” Immergluck said.
Creating affordable housing
Biden’s plan calls for Congress to pass the Neighborhood Homes Investment Act, a bipartisan bill that provides tax credits to rehabilitate blighted homes. Offering $20 billion worth of NHIA tax credits over the next five years would result in approximately 500,000 homes built or rehabilitated, according to the Biden administration.
While the infrastructure bill also would incentivize cities to scrap minimum lot sizes, parking requirements and blanket bans on apartments, condos and townhouses, renovating older houses could be a relatively quick and effective method of creating affordable housing and one that would not require further destruction of the natural environment through clearing land for new housing.
There’s no question that supply of smaller homes is extremely low. According to Bright MLS, 2020 was the tightest housing market on record in the D.C. region, with just 1.3 to 1.4 months’ supply of homes for most of the year. It’s even tighter for homes costing less than $500,000, as many jurisdictions hit an all-time high in median sales prices (not adjusted for inflation) in 2020.