White House Calls for Lower Housing Costs, Increased Supply; Previews Proposals in State of the Union, FY25 Budget Request
This afternoon, the White House published a fact sheet outlining major affordable housing proposals President Biden will reference in his State of the Union address tonight and his Fiscal Year 2025 Budget Request scheduled for release on March 11. The president will call on Congress to pass legislation to lower the costs of rent and homeownership and significantly increase the supply of rental and for-sale housing by building and preserving more than two million homes.
The fact sheet describes several new tax credits and programs President Biden will propose to help low- and middle-income families purchase homes. The president will ask Congress to establish a Mortgage Relief Credit to provide middle-class first-time home buyers with an annual tax credit of $5,000 a year for two years. The administration estimates such a credit would help more than 3.5 million middle-income families purchase homes. To address the lack of affordable homes for sale, President Biden will suggest Congress enact a one-year tax credit of up to $10,000 for middle-class families who sell their starter home (defined as a home priced below the area median home price) to another owner-occupant.
The fact sheet reiterates President Biden’s support for legislation establishing a First-Generation Down Payment Assistance Program for first-time home buyers whose parents do not own a home. NCSHA has endorsed such a program, which has been included in previous Biden Administration budgets and in legislation introduced by Rep. Maxine Waters (D-CA). Furthermore, the fact sheet communicates that the Consumer Financial Protection Bureau will soon issue a rulemaking designed to address what the administration views as unfair closing fees charged by lenders, and the Department of Treasury’s Federal Insurance Office will hold a roundtable on possible reforms to the title insurance industry.
To increase housing supply, the president supports expanding the Housing Credit so that it can build and preserve 1.2 million more affordable rental units than it would under current law and enacting the Neighborhood Homes Tax Credit to produce and renovate more than 400,000 homes. Other proposals to address the housing supply crisis include requiring the Federal Home Loan Banks to double their commitment to the Affordable Housing Program to 20 percent of their net income and establishing a $20 billion Innovation Fund for Housing Expansion that would finance a competitive grant program for the construction of multifamily rental homes, provide incentives for removal of unnecessary barriers to development, support innovative pilot programs for affordable and workforce rental housing production, and boost construction of new starter homes for middle-class families.
The fact sheet also highlights an announcement President Biden made earlier this week establishing a Strike Force on Unfair and Illegal Pricing, through which federal agencies are tasked with preventing anti-competitive, unfair, deceptive, or fraudulent business practices that result in inflated rents, and the administration’s work to crack down on so-called rental junk fees. Lastly, the fact sheet notes the president will call on Congress to expand Housing Choice Vouchers by guaranteeing that low-income veterans and youth aging out of foster care would have access to rental assistance.
