President Biden Unveils Plan to Tackle Housing Affordability Crisis

President Biden has rolled out an ambitious plan to address the pressing issue of housing affordability, hoping to alleviate the burden on working families across the United States. The plan, outlined during his recent State of the Union Address, encompasses a range of strategies aimed at making homeownership more accessible and lowering rental costs.

Here's a breakdown of the key components of the plan:

Lowering Costs of Homeownership: Biden is asking Congress to enact legislation that would provide significant relief to first-time homebuyers through a $10,000 tax credit; $5000 per year for two years. This is the equivalent of reducing the mortgage rate by more than 1.5 percentage points for two years on the median home. The President is also suggesting a one-year tax credit of up to $10,000 to middle-class families who sell their starter home, defined as homes below the area median home price in the county, to another owner-occupant.  The President continues to call on Congress to provide up to $25,000 in down payment assistance to first-generation homebuyers.

Reducing Closing Costs: The Federal Housing Finance Agency has approved policies and pilots to reduce closing costs for homeowners, including a pilot to waive the requirement for lender’s title insurance on certain refinances. This would save thousands of homeowners up to $1500, and an average of $750, and the lower upfront fees will unlock substantial savings for homeowners as mortgage rates continue to fall and more homeowners are able to refinance. Homeowners will still be able to purchase their own optional title insurance policies.

Building and Preserving 2 Million Homes: To address the housing supply gap, Biden is proposing renovating over 2 million homes. This includes expanding tax credits and establishing a competitive grant fund to support housing development efforts. ALso proposed is that the Federal Home Loan Bank double its annual contribution to the Affordable Housing Program – from 10 percent of prior year net income to 20 percent – which will raise an additional $3.79 billion for affordable housing over the next decade.

Fighting Rent Gouging and Rental Fees: The administration is cracking down on unfair practices that drive up rental costs, including rent gouging by corporate landlords and excessive fees charged to renters. Earlier this month, the Federal Trade Commission and DOJ argued that it is illegal for landlords and property managers to collude on pricing to inflate rents – including when using algorithms to do so. Many tenants incur heavy unnecessary costs in the rental application process and throughout their lease, from “convenience fees” to pay rent online to fees charged to sort mail or collect trash. Last fall, the FTC proposed a rule that if finalized as proposed would ban misleading and hidden fees across the economy, including in housing rental agreements. 

These are just some of the recent proposals included in Biden's plan to tackle the housing affordability crisis, with a focus on increasing supply, expanding access, and promoting fairness in the housing market. This plan aims to provide relief to millions of working families struggling with housing costs, fostering economic opportunity and stability. Do you think this will help? I would love to hear your thoughts!

Source: https://www.whitehouse.gov/briefing-room/statements-releases/2024/03/07/fact-sheet-president-biden-announces-plan-to-lower-housing-costs-for-working-families/