Press Release
☷Remarks by National Economic Advisor Lael Brainard on President Biden s Bold Plan for Housing
White House ( By Press Release office)
Mar 14,2024
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While efforts have been made to increase housing construction , we still have a long way to go to meet demand and lower housing costs . The Biden - Harris Administration has taken steps to provide more builders with access to federal financing , leading to a record high of 1 . 7 million units currently under construction . However , we need to continue building even more housing to address the chronic underbuilding of the past decade and a half . Housing affordability is a major challenge in many communities across the country . In the past , we used to build more housing , which kept costs lower . However , after the Global Financial Crisis , construction declined significantly and never fully recovered . At the same time , the largest generation in American history was entering the housing market , creating a higher demand . This led to a focus on higher - value units , rather than affordable starter homes for first - time buyers and the workforce . As a result , only a small percentage of newly completed units in 2022 were affordable for households with median renter income . I ' m excited to be here at the Urban Institute , a leading research institution on housing . President Biden recently proposed a groundbreaking housing plan during the State of the Union Address . This plan aims to make housing more affordable for renters and homebuyers and increase access to quality housing . The President is calling on Congress to support the construction of 2 million additional homes , lower costs for renters , and make the housing market more accessible for first - time homebuyers and families looking to downsize . He also announced administrative actions to reduce closing costs and make rental markets fairer . The President ' s budget for Fiscal Year 2025 includes a historic $185 billion investment in housing to help working families and reduce the deficit by asking the wealthy to contribute their fair share . The combination of a lack of housing construction and high demand resulted in unsustainable growth in rental and home prices . This prevented many Americans from saving and building wealth . Additionally , the pandemic shifted demand patterns , further exacerbating the housing crisis across the country . That ' s why President Biden has come up with some big ideas to help with the housing situation . He wants to build and save 2 million more homes in the next ten years . But we also need to do something now to make it easier for people to buy and rent homes . The President has some bold plans to help out in the short - term . Right now , there are too many people who can ' t afford to buy their first home because it ' s too expensive . And there are also homeowners who want to move but can ' t because the interest rate on a new mortgage would be higher than their current one . The President also wants to help people who want to move by offering a down payment assistance program . This would give an average of $25 , 000 to households without much money to put towards a down payment . It would help them achieve homeownership . But we ' re not just relying on Congress to make these changes . The President has already announced a program to lower closing costs for new home purchases and refinancing . This could save people an average of $750 by not requiring them to buy lender ' s title insurance when they refinance . By reducing closing costs , more people can refinance their mortgages and save money in the long run . To increase the number of starter homes available , the President wants to offer a tax credit to both buyers and sellers . This would encourage homeowners to sell their starter homes to other people who want to live in them . The tax credit could be up to $10 , 000 for middle - class families who sell their starter home to someone who will live in it . This would help around 3 million families and boost the inventory of affordable homes . To help those who can ' t afford a home right now , the President wants Congress to pass a mortgage relief credit . This would give first - time homebuyers up to $10 , 000 , which is like reducing their mortgage rate by 1 . 5% for two years . This credit would help around 3 . 5 million middle - class families buy their first home in the next two years . It ' s like a temporary solution until mortgage rates go down and more homes become available . Also , the Consumer Financial Protection Bureau is planning to create rules and guidance to increase competition in closing costs charged by lenders , which can result in significant additional costs for homebuyers . As part of our efforts to promote a fair and affordable rental market , we are working on a Renters Bill of Rights to ensure fairness for all renters , especially those with low incomes . We have already provided rental assistance to over 100 , 000 low - income households and are looking to expand this assistance to hundreds of thousands more . Additionally , we are taking steps to address misleading fees in rental agreements and prevent excessive rent increases . Our goal is to improve fairness and competition in the rental market and ensure that renter protections adapt to changing market conditions . The President has established a Strike Force to address unfair pricing practices , including in the housing market . Ultimately , we must focus on building more homes to address the long - standing housing supply shortage and improve affordability for American families . So basically , there ' s a gap between what it costs to build new housing and what lower - income families can afford . That ' s why tax credits have been a big help for affordable housing for almost 40 years . The President ' s Plan includes expanding the Low Income Housing Tax Credit to create or save 1 . 2 million affordable units in the next 10 years . This would be the biggest increase in LIHTC since 2000 . LIHTC is responsible for most new federally - funded affordable rental housing . The President is pushing for the Senate to pass a bill that would improve LIHTC and create over 200 , 000 affordable rental units . He also wants Congress to pass a bill that would lead to the construction or preservation of over 400 , 000 starter homes . In some areas , it ' s more expensive to build homes than developers can earn , even though it would benefit the community . Tax credits help increase housing supply , but it ' s also important to support local leaders trying new approaches . That ' s why the President is proposing a $20 billion Innovation Fund for Housing Expansion to help communities increase their housing supply , including in neighborhoods that promote fair housing . This fund is inspired by the success of housing initiatives funded by the American Rescue Plan , which have already supported over 20 , 000 units of affordable housing . For example , New Hampshire used its allocation to support a $100 million initiative that provides grants to help developers fill funding gaps for affordable housing projects and help local governments update land use regulations . These legislative proposals are part of the Administration ' s Housing Supply Action Plan . In fact , just last month , HUD and Treasury extended the Federal Finance Bank risk share program , which will lead to the production or preservation of 38 , 000 units over the next decade . Moving forward , we will take more action , such as supporting communities in identifying and removing housing production barriers and promoting the use of federal resources for office to residential conversions and transit - oriented development . Housing is a top priority for communities across the country , whether rural , urban , or suburban . President Biden has an ambitious plan to address the needs of renters and aspiring homeowners , improve the housing market , and create housing for the future . This plan aims to decrease housing costs , increase access to affordable housing , and help working families build wealth and savings . We are excited to work together with all of you to achieve this important shared goal .
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