Following a recent meeting with the White House on housing supply and affordability, the National Association of REALTORS® (NAR) has sent a letter to the National Economic Council (NEC) offering recommendations to help the current lack of housing affordability and supply.
In September, NAR and other industry leaders were invited to the White House to speak with NEC Director Brian Deese, Domestic Policy Council Director Ambassador Susan Rice, Housing and Urban Development Secretary Marcia Fudge, and Federal Housing Finance Agency Director Sandra Thompson about legislative, administrative, private sector, and state and local actions to address housing supply and affordability challenges across the country.
Read more about the meeting and NAR’s commentary here.
In response to the event, NAR sent a letter to the NEC to voice their support for current proposals and suggest changes to current policies and programs that “will spur federal action and incentivize state and local governments, and private actors, to boost supply and affordability; particularly for first-time and first-generation buyers, and middle-income Americans.”
“It is these groups facing rising rents and a lack of long-term affordable housing opportunities that would benefit most from direct and immediate action,” said NAR President and author of the letter Leslie Rouda Smith. “We encourage the Administration to take the necessary steps to improve the outlook for these consumers and we look forward to working together to tackle these challenges.”
At the Federal level, NAR made the following recommendations:
- Support for the legislative proposals of the Neighborhood Homes Investment Act, GREATER Revitalization of Shopping Centers Act, Revitalizing Downtowns Act, Affordable Housing Credit Improvement Act, and the Choice in Affordable Housing Act.
- The annual mortgage insurance premium for homeowners with FHA backed mortgages should be reduced.
- After the Neighborhood Homes Investment Act is enacted, the Federal Housing Finance Agency could consider allowing Fannie Mae and Freddie Mac to purchase bonds issued under the Act..
- Fannie Mae and Freddie Mac could improve the financing of accessory dwelling units to better incorporate rental income they generate as well as a means to finance their construction.
- The Federal Housing Administration could consider increasing its maximum share of commercial space in projects that it will finance.
- Tax credits to alleviate the labor shortage could support the training and hiring of more construction workers.
- Tax incentives for construction projects that focus on lower cost builds on a larger scale such as modular/factory-built housing, ADUs, etc. To lower land costs, the federal government could further support the enhancement of charitable contribution deductions of land to state or local housing agencies for the creation of more affordable housing.
- Tax incentives to encourage large investors to sell rental homes to first-time or first-generation homebuyers who would occupy them instead of turning them into rentals would increase supply, especially in areas that are highly concentrated with minority families who are facing unprecedented difficulties in acquiring their first home.
At the state level, NAR recommended that federal funding be used to support actions that:
- Support state/local assessments on inventory to identify areas that can support greater density and where properties can be rehabilitated, or areas rezoned to add units.
- Evaluate state and local comprehensive planning efforts – offer federal matching for larger budget needs on housing (while avoiding raises in property taxes, transfer taxes, taxes on services to prevent displacement).
- Identify federal incentives to support state and local efforts to lower the cost of permitting and the time it takes to approve plans for new construction.
- Incentivize/support state/local assessments of zoning for states and local governments to identify property that can be repurposed and other reforms.
- Develop federal incentives to support state and local efforts that lower the cost of permitting and the time it takes to approve plans for new construction and offer waivers for development fees.
- Reward jurisdictions that have reformed zoning and land-use policies with higher scores in certain federal grant processes (such as funding for transportation or other supporting infrastructure).
Reward state and local governments that speed up the zoning process by allowing them to issue a new kind of tax-exempt bond that would make the funding of certain capital projects undertaken by the governmental entity less expensive. To earn the ability to issue the new bonds, the state or local government entity would have to demonstrate meeting stated criteria that the process has been streamlined.