White House Releases Comprehensive Housing Supply Action Plan

This morning, the White House issued a Housing Supply Action Plan (the Plan) that includes both legislative and administrative actions to address the imbalance between supply of and demand for housing, with a goal of closing America’s housing supply shortfall in five years.  The Plan seeks to help renters, with particular focus and both production and preservation of affordable rental housing for low- and moderate-income families, and boost the supply of for-sale homes to help households seeking to become homeowners.  It also looks to address inflation, noting that housing costs make up approximately one-third of the market basket of goods measured by the Consumer Price Index.

“The National Council of State Housing Agencies commends the administration for taking specific steps with its authorities to stimulate the creation of more affordable homes,” said NCSHA executive director Stockton Williams. “While we continue to encourage Congress to act as well, the federal government can create incentives and simplify regulations that will help state and local governments get more done with builders, developers, and community housing organizations.”

The administration’s actions reflect a number of state HFA programs and priorities, including:

• Finalizing the Low Income Housing Tax Credit (Housing Credit) Average Income Test regulations.  The Plan pledges to finish the AIT final rule by the end of September.
• Updating guidance to strengthen and streamline the HOME Investment Partnerships (HOME) program.  The HOME Coalition, which NCSHA chairs, is already collaborating with HUD on this effort and soon will be presenting HUD with a set of consensus proposals to improve HOME regulations and sub-regulatory guidance.
• Continuing to increase rental housing production through the Federal Financing Bank (FFB) program for Federal Housing Administration-Housing Finance Agency (FHA-HFA) Risk Sharing.  The Plan commits to working in the months ahead to accelerate this work by encouraging more state and local HFAs to participate in the FFB program and developing a permanent financing mechanism for these loans through Ginnie Mae’s securitization platform.
• Leveraging American Rescue Plan funds for investments in the broad range of affordable housing activities eligible for support from the American Rescue Plan’s State and Local Fiscal Recovery Funds (FRF), including development of multifamily or single-family affordable housing, preservation of existing affordable housing, permanent supportive housing, support for home repairs, homeownership assistance, rental subsidies, and other activities. On a briefing call White House officials held this morning, Administration representatives said they were continuing to look at regulatory and legislative options for helping to make using FRF funds in combination with the Housing Credit more efficient.
• Better aligning federal requirements across the various federal capital assistance programs to reduce transactional costs and duplication, and to speed development.  Specifically, the Plan states that the White House, HUD, Treasury, and USDA will convene state housing agencies to discuss best practices on the alignment of applications, reviews, and funding.
• Increasing opportunities for Government Sponsored Enterprises (GSEs) Fannie Mae and Freddie Mac to finance multifamily development and rehabilitation.  While the Plan does not specify by what amount, it says that the GSEs anticipate growing their equity investments in the Housing Credit.  The Plan also pledges that the Federal Housing Finance Agency will work with Fannie Mae to consider the feasibility of purchasing construction to permanent multifamily loans.

Other administrative actions highlighted in the Plan include providing incentives for land use and zoning reform to reduce regulatory barriers, such as by leveraging Department of Transportation funds for this purpose; supporting the production and availability of manufactured housing; helping lenders pilot and scale renovation and construction financing for Accessory Dwelling Units; making improvements to and strengthening partnerships related to certain U.S. Department of Agriculture rural housing programs; helping individuals, rather than large investors, purchase FHA- and GSE-defaulted asset dispositions; partnering with the private sector to address supply chain disruptions for building materials; and other action items.

Additionally, the Plan doubles down on the Administration’s support for congressional action to increase resources for affordable housing, including the following NCSHA priorities:

• Expanding and strengthening the Housing Credit by passing proposals in the House-passed reconciliation legislation.  These are: Increasing Housing Credit allocation authority; lowering the bond-financing test to 25 percent; and providing basis boosts for housing that serves extremely low-income households and Native American communities.  The Plan also reiterates the Administration’s proposal, included in its FY 2023 Budget Request to Congress, to provide a state-determined basis boost for bond-financed Housing Credit properties that increase the supply of affordable homes.
• Enacting the Neighborhood Homes Tax Credit to build and rehabilitate for-sale housing for low- and middle-income homebuyers.
• Boosting funding for housing supply programs that are paired with the Housing Credit, including the Housing Trust Fund, HOME, Housing Choice Vouchers, and Project-Based Rental Assistance.