Biden Administration's New 5-Year Housing Action Plan Focuses On Affordability, Financing
The policy changes and initiatives outlined in the Housing Action Plan were divided into five main categories, each containing some items the Biden administration promised to undertake immediately and others that require the cooperation of Congress. The five focus areas are:
- Incentivizing and rewarding changes to zoning and land use regulations that allow for more housing density.
- Launching new financing programs to assist in the production and preservation of smaller-scale housing, like accessory dwelling units.
- Expanding and streamlining federal financing programs that are already on the books, like the Low-Income Housing Tax Credit.
- Disposing of federally owned land and property to small-scale landlords, nonprofits and owner-occupants.
- Easing the ongoing supply chain crunch by working with the private sector.
Among the actions the White House plans to take immediately are prioritizing housing density and affordability in awarding grants from the bipartisan infrastructure bill through the Department of Transportation and directing Freddie Mac to purchase chattel loans, a type of financing specific to manufactured housing, for the first time.
The administration also intends to pilot new forms of financing for property owners who wish to add accessory dwelling units to single-family homes or build multifamily dwellings of four units or fewer, the announcement stated.
One element Biden has proposed that is dependent on approval within the fiscal year 2023 federal budget is a $25B infusion for grants to state and local housing authorities to redevelop or build new affordable housing. The White House estimates that proposal would deliver around 500,000 units over 10 years. It would apply to projects of 100 units or fewer and for households making at most 150% of area median income.
The Department of Housing and Urban Development will also implement an income averaging rule for the Low-Income Housing Tax Credit, the announcement stated. Income limits for residents of LIHTC-financed properties are currently hard caps; income averaging would allow developers to apply that income cap to the overall average of a property's residents, which the administration called a crucial element of flexibility.
HUD intends to convene state and local housing authorities in the near future to devise ways for a project to qualify for multiple federal financing programs at once, rather than navigating multiple complex applications. HUD also plans to collaborate with the Department of Health and Human Services and the General Services Administration to issue new regulations to Title V of the McKinney Vento Act, unlocking more federally owned land to be disposed for the purpose of providing housing for the homeless.