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Home sales and affordability are falling due to severely constrained inventory. As such, more government leaders are putting greater focus on the inventory crisis.
President Joe Biden recently reiterated his administration’s focus on housing as part of its broader infrastructure push. He’s called for a “historic investment” in housing that could generate 2 million additional homes in the U.S. through new construction and rehabilitating existing units.
Leaders at the Department of Housing and Urban Development joined NAR policy experts last week to discuss potential solutions to what’s been called a “dire historic housing inventory crisis.” HUD Senior Adviser Alanna McCargo relayed the need for a broad number of policies but warned that “there are not really any silver bullets.” She emphasized working on a local level to reform zoning and land-use policies.
“Aggressive renovation” and rehabbing properties is also important to keep more existing housing inventory in the pipeline, she added. “Also, building resiliency and energy efficiency into the future are going to be really key approaches” of the administration. McCargo said that the administration will take a “serious look at how we accelerate renovation and rehabilitation construction projects.”
The U.S. has an “underbuilding gap” of about 6 million units dating back to 2001, according to research commissioned by the National Association of REALTORS® and authored by the Rosen Consulting Group. The report calls for a “once in a generation” response to address housing shortages. Policy recommendations outlined in the report call for lawmakers to remove construction barriers that could help incentivize new development.
“The U.S. housing shortage is the result of more than a decade of severe underbuilding and underinvestment,” NAR President Charlie Oppler said at last week’s event. “Reaching the necessary volume will require a major, long-term national commitment, [and] building all types of new housing must be an integral part of any national infrastructure plan. Like roads and bridges, housing is an essential long-term asset that helps families climb the economic ladder to prosperity, brings folks closer to job opportunities, and generates tax revenue that supports community residents.”