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By Giulia Carbonaro
Senior Reporter
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President Joe Biden and Vice President Kamala Harris have announced measures to boost the construction of new homes across the U.S. and make them more affordable, including $100 million in community grants to identify and remove barriers to affordable housing production and preservation.
The new measures, which include expediting housing permitting and providing greater interest rate predictability for state and local housing finance agencies, are the first major housing policies to be announced since Harris' became the Democratic Party's presidential nominee. Newsweek contacted Harris' 2024 campaign for comment by email outside usual working hours.
The U.S. housing market could become an important issue in the 2024 election, as affordability is near an all-time low in the country, and many are struggling to get on the property ladder. According to Freddie Mac, the country needs at least 1.5 million more homes to relieve the national housing shortage.
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The U.S. housing market boomed during the years of the pandemic, when prices peaked across much of the country amid high demand, historically low inventory and relatively low mortgage rates. The boom led to a crisis of affordability, which in turn triggered a slowdown in sales in late summer 2022, causing a temporary price correction across the housing market that ended in spring 2023.
After that modest slide, home prices rose across the U.S. As of June, the latest data available on Redfin, the median sale price of a home was $442,451, up 4 percent compared to a year earlier and higher than the May 2022 peak of $432,000. A chronic shortage of homes at the national level has contributed to keeping prices high, as the country has significantly underbuilt in the years following the financial crisis of 2007 to 2008.
The new measures announced by the White House are in line with what the Biden-Harris administration has been doing in the past two years with the Housing Supply Action Plan, which sought to close the supply shortfall in the market in five years.
"After decades of under-investment in housing, we are finally seeing progress under President Biden and Vice President Harris: more units are under construction than at any time in over 50 years, and the rate of new housing starts is up 17 percent compared to the last Administration," the White House wrote in a news release on Tuesday. "The Biden-Harris Housing Plan would build over 2 million new homes to further increase supply and lower housing costs for Americans."
Among the new measures, expediting housing permitting at the local and state level could be crucial. "Permitting requirements contribute to the nationwide housing shortage, leading many would-be deals to not be financially viable or be scaled down, and driving up the cost of housing," the White House wrote. "Reforms to streamline permitting processes can lead to more housing being built more quickly, which will lower housing costs."
The administration is also planning on speeding up historic preservation reviews for federal housing projects and enabling more housing types to be built under the HUD Code.
"As a housing economist, I am excited to see ongoing housing policy announcements focused on supply during this election cycle," Ralph McLaughlin, Realtor.com's senior economist, said of the new measures.
"The current announcement by the Biden-Harris administration is focused on supply, something that housing economists like myself have been fixated on for the past few decades," he added. "It's promising to see such policies that target the underlying cause of much of today's housing troubles: a chronic undersupply of both market-rate and affordable housing stock."
At a recent rally in Atlanta, Harris mentioned the high cost of rent as a major housing issue she'd tackle if elected.
"It is true that by many indicators our economy is the strongest in the world, but while inflation is down and wages are up, prices are still too high," Harris told a crowd gathered at the Georgia State University Convocation Center on July 30.
"On day one, I will take on price gouging and bring down costs. We will ban more of those hidden fees and surprise late charges that banks and other companies use to pad their profits. We will take on corporate landlords and cap unfair rent increases," she continued.
Donald Trump, the Republican presidential nominee, also plans to encourage the construction of more homes should he be elected in November. NBC News reported, citing a Trump campaign official, that the former president wants to lower housing costs by spurring construction of new homes on the "periphery of cities and suburban areas" where land is cheapest. The report added that he also plans to eliminate Biden's "anti-suburban housing regulation."
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