A New Agenda for a New President

NAR Chief Economist Lawrence Yun offers suggestions to spur much-needed housing construction.

November 2, 2016

What should the new U.S. president focus on in the early months of 2017? Given the massive shortage of housing in many markets, a shortage that is making home ownership and renting unaffordable for many households, I would suggest several steps to spur housing construction. Here are three ways the president and Congress can proceed:

First, liberate community banks from the onerous financial regulations that arose out of Dodd-Frank, the banking reform law enacted after the financial crisis. Without a doubt, there are good aspects to the law, including safeguards against systemic risks posed by big banks and protections for consumers against abusive lending. But let small banks compete for customers based on how well they serve their clients rather than their ability to comply with complex rules that are more appropriate for giant financial services companies. Community banks are the main source of funds to local builders who historically have supplied the bulk of our country’s housing, both for owners and renters. They’re also a key source of loans for small-business startups that are essential to growth.

Second, provide more resources for community colleges and trade schools. The country has a shortage of skilled construction workers. Community colleges can help by training the electricians, carpenters, welders, and other skilled workers we need to produce houses, apartments, and commercial buildings.

Third, expand tax credits and other incentives for developers and investors to support new affordable housing for working households. Recall that the major-party presidential candidates agreed during the campaign on the need to rebuild the nation’s failing infrastructure. It’s not a stretch to see affordable housing as part of that equation.

These moves would be a boon for the economy as they address the inventory and affordability issues. An added benefit: heading off unwelcome calls for lawmakers to take even more draconian action on housing costs. Rent control, anyone?

Lawrence Yun
Chief Economist and Senior Vice President of Research at the National Association of REALTORS®

Yun oversees and is responsible for a wide range of research activity for the association including NAR’s Existing Home Sales statistics, Affordability Index, and Home Buyers and Sellers Profile Report. He regularly provides commentary on real estate market trends for its 1.3 million REALTOR® members.

Dr. Yun creates NAR’s forecasts and participates in many economic forecasting panels, among them the Blue Chip Council and the Wall Street Journal Forecasting Survey. He also participates in the Industrial Economists Discussion Group at the Joint Center for Housing Studies of Harvard University. He appears regularly on financial news outlets, is a frequent speaker at real estate conferences throughout the United States, and has testified before Congress. Dr. Yun has appeared as a guest on CSPAN’s Washington Journal and is a regular guest columnist on the Forbes website and The Hill, an “inside the beltway” publication on public affairs.

Dr. Yun received his undergraduate degree from Purdue University and earned his Ph.D. from the University of Maryland at College Park.