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In many parts of the country, there is a severe shortage of affordable and workforce housing. Supply constraints, often related to restrictive state and local policies, exacerbate the problem.
The impact of this growing undersupply of affordable housing is far-reaching and undermines economic growth, particularly in urban areas.
A diverse and accessible housing sector is critical to the overall health of the economy. Expanding the supply of housing across the geographic and economic spectrum is essential for the economic vitality of the nation. As such, we support all initiatives to increase supply over the long term.
The Roundtable encourages policymakers to focus on policies that incentivize builders, developers, and owners to build more affordable housing for low-and middle-income tenants. Policies should encourage investment in housing and not be a disincentive to investment in housing.
We support specific measures to expand the supply of housing, such as the low-income housing tax credit (LIHTC) and property conversion tax credits. We oppose misguided restrictions such as rent control, rent stabilization, and other restrictions on tenant engagement that deter investment in housing production.
The Roundtable is also exploring other potential policy ideas to expand the supply of housing such as a property conversion tax credit, which would help offset costs involved in converting old office buildings into new and affordable housing units.
To increase housing supply, the reform of the Government-Sponsored Enterprises (GSEs)—Fannie Mae and Freddie Mac—must focus on supporting underserved areas and mortgages to aid low- and moderate-income families with home ownership and rental housing, instead of imposing new regulations such as rent control.
The United States faces a severe housing shortfall, exacerbating a scarcity of affordable housing and impeding economic vitality across the economic spectrum. Freddie Mac research indicates that there is a market shortfall of some that is raising the cost and reducing the availability of housing—particularly at the lower end of the economic spectrum. Housing underproduction has translated to higher housing costs—resulting in a decline of 4.7 million affordable apartments. Further complicating this chronic housing shortage, rising interest rates have stalled new construction.
The federal government provides housing assistance through various programs: portable vouchers that can be used in the private market; project-based rental assistance that provides subsidized rent in designated private buildings; and subsidized rent in public housing. In addition, the low LIHTC subsidizes the production of rental housing for income-eligible tenants.
The LIHTC is regarded as one of the most successful public-private partnership programs in history. The Roundtable supported its initial passage and continues to support efforts to expand the program.
An expanded LIHTC could create and preserve more than 2 million additional affordable homes, support 3 million jobs, and generate $119 billion in sustainable tax revenue.
For more information and recent updates, reference our resources below.
