Wages are up. Unemployment is low. Yet for many Americans, homeownership is out of question. As the inventory shortage deepens, both housing costs and rent are rising faster than wages can keep up across the nation. And though builders want to address the affordable housing crisis, high lot prices and lack of labor often force them to turn to more profitable options. Some economists are calling on lawmakers to intervene by providing funds for affordable housing options to encourage builders to focus on developing in that sector versus going for the luxury market. With more properties, they hope that prices come down so that the market opens up to a larger demographic of Americans.
Many low- and middle-income Americans are struggling to find an affordable place to live. Unemployment is low, and wages are up, but they aren’t keeping pace with the rapid increases in rents and house prices in much of the country. There is a severe affordable housing crisis, and it is set to get much worse.
Given the facts we’ll walk through in a moment, lawmakers need to address this crisis, which is why we wanted to highlight an idea that’s a timely part of the solution: a bill in Congress (H.R. 5599) designed to channel significant resources into the Housing Trust Fund, a program with a strong track record in supporting affordable rental housing. The bill calls for no new funding relative to current policy: Its funding comes from preventing the scheduled sunset of a small, existing fee paid by homeowners getting mortgages insured by Fannie Mae and Freddie Mac.
Simply put, the legislation would significantly increase the number of affordable rental apartments by preventing a housing-related revenue source from expiring.