NAR, White House Brainstorm Affordability Solutions
November 4, 2019
The National Association of REALTORS® is working with the White House to develop solutions for the affordability crunch that has sidelined many first-time home buyers in recent years. NAR President John Smaby on Friday met with Department of Housing and Urban Development Secretary Ben Carson, as well as other senior Trump administration officials, during a roundtable discussion analyzing current proposals designed to diminish affordability constraints.
“Housing affordability is one of the most significant problems facing this nation, our economy, and potential home buyers in communities everywhere, and the lack of housing supply is only adding to the problem,” Smaby said. He added that the roundtable was a “terrific opportunity to bring together stakeholders to share and brainstorm solutions. We look forward to continuing to work closely with the White House to ensure the American dream remains attainable for all those who wish to become homeowners.”
NAR Chief Economist Lawrence Yun has said that low inventory is the main factor driving up home prices. Although new-home construction has accelerated, it is still not enough to accommodate increased housing demand. NAR has commended the Trump administration for its focus on removing regulatory barriers exacerbating these problems.
This summer, the Federal Housing Administration finalized new condominium loan policies that NAR predicted would yield thousands of new homeownership opportunities and help alleviate affordability restraints. Condos are often the most affordable option for first-time home buyers, small families, and those in expensive urban areas.
Most recently, HUD and the Department of Justice announced last week its decision to ease the use of the False Claims Act. NAR has publicly stated that this change will “help more consumers access low down payment loans and ensure a wide range of financial institutions will offer Federal Housing Administration-backed loans in the future.”
Earlier this year, President Donald Trump announced the creation of the White House Council on Eliminating Regulatory Barriers to Affordable Housing, which facilitates the development of new strategies to secure housing opportunities for everyone in this country. According to the White House, more than 25% of the cost of a new home is the direct result of federal, state, and local regulations, with the price tag even reaching up to 42% for some new multifamily construction.
“Regulations are creating excessive costs that are holding back the development of needed affordable housing,” the White House said earlier this year, noting Census Bureau data showing that only seven homes were built for every 10 households formed from 2010 to 2016. “Many of the markets with the most severe shortages in affordable housing have the most restrictive state and local regulatory barriers to development.”
Regardless, any efforts to improve housing affordability and accessibility must be led by state and local governments, NAR argues, while encouraging local experts to weigh in on zoning laws, building codes, and other policies that spur free market production of affordable housing units.
Updated: May 29, 2020