Youth Concerns and Biden Administration’s Response
In a recent survey, housing ranked second only to inflation among respondents aged 18 to 34. Recognizing the impact of this issue, President Biden has directed his economic aides to develop new strategies to assist Americans struggling with the costs of homeownership. The administration is leveraging federal grants to encourage local authorities to relax zoning regulations and is considering executive actions to address affordability.
Top officials, including Lael Brainard, have also been dispatched to speak about the administration’s efforts to make housing more affordable. Brainard emphasized the importance of housing affordability in families’ monthly expenses.
The Significance of Housing Affordability as a Political Issue
In the past, housing has not been a major factor motivating voters, as zoning policies and market drivers have been primarily localized. However, the current housing market volatility, coupled with increasing rental costs, has made housing a critical economic concern. With homeownership rates significantly lower among younger demographics, housing affordability could become a key political issue for hard-hit groups.
Housing experts, such as Igor Popov and Jim Parrott, recognize the importance of addressing housing affordability from an economic policy perspective. Insufficient housing supply due to reduced construction after the 2007 market crash has contributed to the current situation.
The Biden Administration’s Efforts and Future Solutions
President Biden has included emergency rental assistance in the 2021 economic stimulus bill, focusing on issues related to inflation. However, the administration has also implemented strategies to liberalize local housing laws and expand affordable housing. These efforts include the release of a “Housing Supply Action” plan to accelerate development through federal grants and the encouragement of zoning reforms.
Additionally, the administration has proposed ideas to help renters, such as legislation for future renters and measures to combat hidden fees. Expanding the role of Fannie Mae and Freddie Mac in investing directly in moderately priced rental housing developments has also been considered.
However, without support from Congress, the administration faces limitations in its ability to address housing supply barriers. The Republicans, who currently hold the majority in the House, have opposed most of President Biden’s spending plans, including those related to housing.
While it is important to discuss and implement solutions, experts caution that solving the housing affordability problem will take time. Mark Zandi, Chief Economist of Moody’s Analytics, emphasizes the need for long-term strategies.