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...efforts-to-build-and-preserve-housing-to-lower-costs-and-opportunities-ahead.md
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| --- | ||
| date: '2024-12-05' | ||
| modified_time: 2024-12-05 13:55:04-05:00 | ||
| published_time: 2024-12-05 12:00:00-05:00 | ||
| source_url: https://www.whitehouse.gov/briefing-room/speeches-remarks/2024/12/05/remarks-by-national-economic-council-deputy-director-daniel-hornung-on-biden-harris-efforts-to-build-and-preserve-housing-to-lower-costs-and-opportunities-ahead/ | ||
| tags: speeches-remarks | ||
| title: "Remarks by National Economic Council Deputy Director Daniel Hornung on Biden-\u2060\ | ||
| Harris Efforts to Build and Preserve Housing to Lower Costs, and Opportunities\_\ | ||
| Ahead" | ||
| --- | ||
|
|
||
| *As Prepared for Delivery at the Novogradac Housing Finance Conference* | ||
|
|
||
| We are at a critically important moment for housing policy. | ||
|
|
||
| Housing is less affordable for Americans now than at any point in recent | ||
| memory. Approximately half of renters are | ||
| [cost-burdened](https://www.jchs.harvard.edu/sites/default/files/reports/files/Harvard_JCHS_The_State_of_the_Nations_Housing_2024.pdf) | ||
| and a quarter are severely cost-burdened, meaning they must devote over | ||
| half of their income to rent. Renters report that homeownership – long | ||
| seen as the main source of wealth building for the middle-class – feels | ||
| [unattainable](https://www.americanprogress.org/article/americans-recognize-housing-affordability-crisis-support-new-policies-to-fix-the-market-and-build-more-homes/). | ||
|
|
||
| Much has been made of why various measures of economic sentiment remain | ||
| at low or moderate levels in light of a macroeconomy that has performed | ||
| so well – with robust growth, low unemployment, and an inflation rate | ||
| that is nearly back to normal. I suspect that the housing situation | ||
| facing middle- and low-income households is likely one of the more | ||
| significant reasons. | ||
|
|
||
| How did we get here? The combination of a [missing decade of apartment | ||
| construction and | ||
| homebuilding](https://fred.stlouisfed.org/series/COMPUTSA) after the | ||
| Global Financial Crisis and a [historic shift in housing | ||
| demand](https://www.fanniemae.com/media/38866/display#:~:text=Overall%2C%20our%20findings%20show%20that,through%20the%20end%20of%202020.) | ||
| after COVID led to a substantial mismatch between supply and demand that | ||
| triggered unsustainable growth in rents and home prices. And bringing | ||
| the housing market into better balance would still be insufficient for | ||
| households earning the lowest incomes, as these households don’t earn | ||
| enough income to | ||
| [afford](https://www.cbpp.org/research/housing/federal-rental-assistance) | ||
| market rents. | ||
|
|
||
| As we near the end of this presidential term, I’d like to focus today on | ||
| the groundwork President Biden and Vice President Harris have laid to | ||
| address housing affordability by increasing the supply of housing. Two | ||
| and a half years ago, our Administration launched the [Housing Supply | ||
| Action | ||
| Plan](https://www.whitehouse.gov/briefing-room/statements-releases/2022/05/16/president-biden-announces-new-actions-to-ease-the-burden-of-housing-costs/), | ||
| an all-of-government effort to build and preserve more housing. | ||
|
|
||
| Today, I will discuss our work as part of that plan to break down | ||
| barriers to housing, increase the flow of public and private capital | ||
| into housing that is affordable, and promote innovation to lower costs. | ||
| And I’ll highlight what I see as the opportunities ahead for state and | ||
| local governments and the private sector to build on this work – even as | ||
| it remains critical that Congress meet the moment to encourage more | ||
| housing production and preservation. | ||
|
|
||
| **Breaking Down Barriers to Housing** | ||
|
|
||
| Land use, zoning, and permitting barriers have long constrained housing | ||
| supply. Since the 1980s, | ||
| [housing](https://www.whitehouse.gov/wp-content/uploads/2024/03/ERP-2024.pdf) | ||
| prices have grown sixfold, while construction costs have quadrupled. | ||
| Restrictive regulations at the state and local level have contributed to | ||
| this dynamic and divergence. | ||
|
|
||
| That’s why the Administration’s plan began with federal action to | ||
| incentivize state and local governments to reduce barriers to housing | ||
| construction. Our Administration launched a first-of-its-kind grant | ||
| program, which supports state and local governments in removing | ||
| obstacles to affordable housing development, including awarding | ||
| [grants](https://www.hud.gov/program_offices/comm_planning/pro_housing/fy23awards) | ||
| to 21 communities across the country that are taking steps like updating | ||
| land use policies to increase density and by-right permitting, | ||
| streamlining regulations, and increasing staffing to enable faster | ||
| approvals. In addition, we incorporated zoning and land use reforms as | ||
| selection criteria in more than $20 billion in [competitive federal | ||
| funds](https://www.whitehouse.gov/briefing-room/statements-releases/2024/08/13/fact-sheet-biden-harris-administration-takes-new-actions-to-lower-housing-costs-by-cutting-red-tape-to-build-more-housing/), | ||
| including transportation dollars —meaning, if you have pro-housing | ||
| policies in place, you are more likely to receive highly-sought after | ||
| federal grant dollars. | ||
|
|
||
| The federal government also has an important role to play in reviewing | ||
| its regulations and policies in a manner that promotes public health and | ||
| safety, while seeking to make it easier to build and preserve housing. | ||
| For example, our Administration [waived certain environmental review | ||
| requirements](https://www.transportation.gov/buildamerica/TOD/faqs) when | ||
| commercial structures are being converted into housing. | ||
|
|
||
| Looking ahead, this moment calls for much more than just rhetoric of | ||
| deregulation. We need to build a real coalition across the private | ||
| sector, state and local leaders, and members of both parties in | ||
| Washington that asks what more we can do through our policies, | ||
| investments, and partnerships, to reward and encourage zoning, land use, | ||
| and permitting reforms that make it easier, faster, and cheaper to | ||
| build. | ||
|
|
||
| **Increasing the Flow of Public and Private Capital into Housing that is | ||
| Affordable** | ||
|
|
||
| The second key area of focus in our Housing Supply Action Plan was | ||
| mobilizing more public and private capital into building and preserving | ||
| housing that is affordable for working families. This is an area where | ||
| Congressional action is critical, as subsidy dollars are often needed to | ||
| [build and | ||
| operate](https://ternercenter.berkeley.edu/research-and-policy/making-it-pencil-2023/) | ||
| housing that is affordable for low-income households. | ||
|
|
||
| At the same time, part of making the case to Congress and to the private | ||
| sector that more capital is needed is demonstrating that existing | ||
| federal dollars can be used effectively, including to crowd in private | ||
| investment. Since launching the plan, we finalized regulations to make | ||
| it easier to use the [Low-Income Housing Tax | ||
| Credit](https://www.whitehouse.gov/briefing-room/statements-releases/2024/08/13/fact-sheet-biden-harris-administration-takes-new-actions-to-lower-housing-costs-by-cutting-red-tape-to-build-more-housing/) | ||
| for building mixed-income housing; indefinitely extended and expanded | ||
| the [Federal Financing Bank Risk Share | ||
| program](https://www.hud.gov/press/press_releases_media_advisories/hud_no_24_042) | ||
| to channel more capital into projects and increase certainty for new | ||
| construction; made it easier to layer funds from the [American Rescue | ||
| Plan](https://www.whitehouse.gov/briefing-room/statements-releases/2024/08/13/fact-sheet-biden-harris-administration-takes-new-actions-to-lower-housing-costs-by-cutting-red-tape-to-build-more-housing/), | ||
| which represented the largest one-time housing block grant in U.S. | ||
| history, with other sources of federal financing; and unlocked billions | ||
| of dollars in low-cost lending authority at the [Department of | ||
| Transportation](https://www.transportation.gov/buildamerica/TOD/faqs) to | ||
| finance housing near transit—a program that will close a deal on its | ||
| first housing project in the coming days. | ||
|
|
||
| Another way governments can help increase the flow of private capital | ||
| into housing that is affordable is by making under-utilized public land | ||
| or buildings available for housing. For example, right here in Clark | ||
| County, Nevada, our Administration recently announced the sale of 20 | ||
| acres of public land for just $100 per acre that will be transformed | ||
| into | ||
| [homes](https://www.blm.gov/press-release/biden-harris-administration-announces-new-actions-build-more-housing-and-lower#:~:text=Cactus%20Trails%20will%20consist%20of,for%20the%20project%20this%20fall) | ||
| for working and middle-class families. And the United States Postal | ||
| Service, which owns 8,500 facilities nationwide, is soon to announce a | ||
| first-of-its-kind sale of surplus land to be repurposed as affordable | ||
| housing – building on steps that the [U.S. Forest | ||
| Service](https://www.fs.usda.gov/inside-fs/delivering-mission/excel/blueprint-partnering-local-communities-housing) | ||
| has already taken to enable workforce housing in high-cost areas in the | ||
| Mountain West. | ||
|
|
||
| Looking ahead, in addition to pressing for Congressional action, we must | ||
| also consider what more the private sector can do in light of increasing | ||
| housing needs [across the income | ||
| spectrum](https://www.jchs.harvard.edu/blog/middle-income-housing-programs-emerge-affordability-challenges-climb-income-ladder) | ||
| and [significant preservation | ||
| demands](https://www.planetizen.com/features/130916-good-new-vital-role-preservation-solving-housing-crisis), | ||
| with the aging of the housing stock and the upcoming | ||
| [expiration](https://preservationdatabase.org/wp-content/uploads/2021/10/NHPD_2021Report.pdf?hsCtaTracking=2cc62f18-cbf3-406c-8cd5-3e7bf96eec42%7C25d23f05-472e-42e9-bfa4-5df93980096f) | ||
| of affordability covenants for hundreds of thousands of homes. There is | ||
| a growing recognition that building and preserving more housing is not | ||
| just a social necessity—it is also an economic opportunity that, if | ||
| structured properly, can improve outcomes like long-term affordability | ||
| and housing quality, and earn attractive risk-adjusted returns. | ||
|
|
||
| I believe this recognition presents a critically important opportunity | ||
| that shares some similarities with the push to mobilize private capital | ||
| into the energy transition that began more than a decade ago. For | ||
| example, if the private market, in partnership with state and local | ||
| governments, can demonstrate how to operate quality, affordable | ||
| workforce housing at scale, it could bring much-needed capital into | ||
| meeting the housing needs of working families, begin to address housing | ||
| challenges in high-opportunity areas, incentivize better policy and | ||
| innovation, and provide policymakers with insights on how to improve | ||
| existing housing subsidy programs. | ||
|
|
||
| **Promoting Innovation to Lower Costs** | ||
|
|
||
| A final area of focus in the Housing Supply Action Plan was action to | ||
| encourage housing innovation and improve construction productivity in | ||
| order to lower costs. This goal, while more long-term than the others | ||
| I’ve discussed, has the potential to benefit renters and homebuyers, | ||
| builders, developers, and manufacturers alike. | ||
|
|
||
| One key step our Administration has taken to encourage this kind of | ||
| innovation is enabling more housing types – including duplexes, | ||
| triplexes, and fourplexes – to be built under the [HUD | ||
| Code](https://www.hud.gov/press/press_releases_media_advisories/hud_no_24_233), | ||
| a single code that enables offsite manufacturers to benefit from | ||
| economies of scale because it does not require them to follow different | ||
| codes in different states. Another example is the [Build Back Better | ||
| Regional | ||
| Challenge](https://www.smartcitiesdive.com/news/bbb-regional-challenge-eda-mass-timber-digital-twins-advanced-mobility/631376/), | ||
| a grant competition that funded an R&D investment in mass timber for | ||
| affordable housing, which aims to promote the use of scalable building | ||
| materials. | ||
|
|
||
| Looking ahead, more can and should be done to create the conditions for | ||
| innovation and productivity growth in multifamily construction in | ||
| particular. This is an area where the private sector can contribute | ||
| substantially, with dozens of firms now beginning to experiment with | ||
| technologies like modular building, robotics, advanced manufacturing, | ||
| and 3D printing. Efforts to mobilize more private capital into | ||
| affordable and workforce housing should aim to leverage these | ||
| technologies in a manner that enables each dollar to go further and | ||
| faster. | ||
|
|
||
| **Conclusion** | ||
|
|
||
| There is no question that the housing challenges facing families across | ||
| the country are immense. And, while bipartisan consensus is building on | ||
| this issue, Congressional action is sorely needed. But I remain | ||
| optimistic about what we can do together in the years ahead to tackle | ||
| the challenge of housing affordability by building and preserving more | ||
| housing. | ||
|
|
||
| This does not mean housing supply solutions alone are sufficient. We | ||
| must also support the lowest-income households and promote fairness and | ||
| competition – from prohibiting egregious rent increases when federal | ||
| dollars are used to ensuring that algorithmic price fixing does not | ||
| diminish the incentive for housing providers to compete on price and | ||
| quality. | ||
|
|
||
| But we can’t begin to address the housing challenges facing workers, | ||
| families, and communities, without a dedicated effort to build and | ||
| preserve more housing at a scale we haven’t seen in decades. And I | ||
| remain optimistic that the coming years can bring such an effort. | ||
|
|
||
| \### |