On May 16, the White House announced a Housing Supply Action Plan, a mix of actions the Administration will take “immediately” on its own and policy changes and funding that need Congressional approval. All told, the White House says these efforts will help close the nation’s housing supply shortfall in five years “starting with the creation and preservation of hundreds of thousands of affordable hosing units in the next three years.”

The housing shortfall drives inflation, maintains residential segregation, and burdens family budgets, the White House says.

There are different ways to assess the extent of the nation’s housing shortfall. Moody’s Analytics says the shortfall in housing supply is 1.5 million homes nationwide. The National Low Income Housing Coalition reports a national “gap” of 7 million rental homes affordable to extremely low income renter households. HUD’s Worst Case Housing Needs report shows 2.241 million older adult renters with very low incomes paying more than half of their incomes toward housing. No matter how one slices it, the nation needs more housing.

The Plan’s needed Congressional actions include enactment of the House-passed Build Back Better Act, which included more than $150 billion for HUD production and preservation programs as well as significant expansion of the Low Income Housing Tax Credit program as well as Housing Credit improvements. Together with the Plan’s Administrative actions, and “in partnership with state, local, for-profit and non-profit partners,” the Plan will “put the economy on a path to closing the housing supply gap in the next five years.”

Immediately, the Administration will:

• Strengthen Fannie Mae and Freddie Mack financing for multifamily development and rehabilitation, including expanding equity investments in Low Income Housing Tax Credit deals and increased financing of mission-driven affordable housing.
• Urging even greater use of the American Rescue Plan’s State and Local Fiscal Recovery Funds for affordable housing.
• Update and strengthen the HOME program and update CDBG guidance on the use of CDBG funds for housing.
• Directing sale of defaulted homes owned by FHA, Fannie, and Freddie to non-profits rather than large investors.
• Continue affordable housing expansion through the Federal Financing Bank’s Risk Sharing Program.
• Convene state housing agencies to improve alignment between federal and state housing programs.
• Improve the disposition process for federal properties for re-use as housing for people experiencing homelessness.
• Finalizing Treasury’s “income averaging” proposed rule by the end of September. Income averaging in Housing Credit communities was enacted by Congress several years ago but still lacks a final federal rule.
• Support production and availability of manufactured housing with conventional financing.
• Scaling up Accessory Dwelling Units and piloting home renovation tools for single family renovations.
• Improve the USDA’s Construction to Permanent program, which allows lenders and homebuilders to close both construction and permanent financing at the same time.
• Continue the Department of Transportation’s incentivizing land use reform, density, and transit-oriented development in competitive grant programs.
• Integrate affordable housing into DOT programs.
• To address materials costs and labor supply issues, the HUD, Department of Labor, and others will meet with the building industry to explore actions “to turn the record number of homes under construction into completed homes.” HUD will promote modular, panelized, and manufactured housing and support the Department of Energy’s work to improve affordable housing technologies such as prefabricated and super-insulated materials.

Congressional approval is needed for several Plan components, including:

• Provide new financing, grants, loans and tax credits through programs like project-based HUD housing, Housing Trust Fund, Low Income Housing Tax Credits, a new Neighborhood Homes Investment program, a new Housing Supply Fund grant program, for the production and preservation of affordable housing.
• $1.75 billion for an “unlocking possibilities” competitive program to help state and local governments undertake efforts to reduce barriers to affordable housing and an additional $10 billion for the Housing Supply Fund for housing development activities as a reward state and local governments for their new housing barrier reduction policies.

Read the White House Housing Supply Action Plan here.