A federal freeze on most evictions enabled last year just expired August 2021 after Joe Biden’s administration extended the original expiration date by a month. This was the only thing that was keeping millions of tenants in their homes during the pandemic, jobs were lost, and people have fallen substantially behind on their rent.
The nationwide eviction moratorium is over and housing is becoming more and more of a luxury than a requisite to life with housing being so unaffordable these days. Now with tenants and landlords biting their nails about what’s going to happen next, The Biden administration announced their plans for the future of housing affordability and rental assistance.
It’s no secret that the nation is facing a severe housing shortage, especially with homes in the lower price points that are very much ideal for first time home buyers. As these shortages persist, rental and home prices continue to surge with such high demand throughout the pandemic.
The Biden administration's plan is to make 100,000 new homes available for the 6 or so million homes needed to fill the gap in housing supply. It definitely doesn’t seem like much, but it is 100,000 more homes than the market didn’t have before. The National Association of Realtors is working closely with congress to try and expand access to the American dream of homeownership. It is a step in the right direction even though it seems very miniscule when looked at on a larger scale.
How will the White house go about achieving this 100,000 affordable housing goal exactly? I’ll read their plans verbatim to ensure you’re not missing the details.
-They are going to relaunch the partnership between the Department of Treasury Federal Financing Bank and the Department of Housing and Urban Development (HUD) Risk Sharing Program. The program, which originally ended in 2019, would allow eligible state housing finance agencies to provide low-cost capital for affordable housing development.
-Boost the supply of manufactured housing and 2-4 unit properties by expanding financing through Freddie Mac.
-Make more single-family homes available to individuals, families, and non-profit organizations—rather than large investors—by limiting the sale to large investors of certain FHA-insured and HUD-owned properties. Also, expand and create exclusivity periods where only governmental entities, owner-occupants, and qualified nonprofit organizations are able to bid on certain FHA-insured and government-owned properties
-Work with state and local governments to boost housing supply by using existing federal funds to launch local action, explore helping states and local governments reduce exclusionary zoning, and launch learning and listening sessions with local leaders.
Biden says they will “use every tool accessible in the government to make this happen.” Many people think that investors have taken a seat on the sidelines during the pandemic since prices are so high, but in reality one out of every six homes purchased during the second quarter of 2021 was acquired by an investor. Large investors have been buying up homes and the transition into a rental property drives up prices for the lower cost homes, making it harder for aspiring homeowners to achieve homeownership.
The president’s “build back better campaign” will supposedly enable the construction and rehab of more than a million affordable housing units. With the expansion of the Low-income Housing Tax Credit (LIHTC) to Home partnership orgrams, Housing Trust Funds, and the Capital Magnet Fund, this campaign will give people the opportunity to have more affordable housing.
One of the ways they plan to push forward is by making financing more available for manufactured housing, 2-4 unit properties, and prioritizing homeownership in the sale of FHA-insured properties and HUD homes. Biden wants to make purchasing a home easier for owner occupants and non-profit organizations, rather than large investors.
The Neighborhood Homes Investment Act will lead to the rehabbing of distressed properties and boost homeownership and wealth-building possibilities for more middle-class families.
Let me touch on this point real quick, the Biden administration is trying to give owner occupants and non-profit organizations a leg up on purchasing homes, which sounds all fine and dandy, but you really need to look at the print when it says FHA-insured homes, HUD homes, distressed homes etc. The administration is giving people a leg up on HUD homes..
There really aren't a lot of options in most markets for homes like that, so this isn’t a true benefit in my opinion. If the housing shortage is so bad, they should limit investors on the purchase of houses altogether or give sellers an incentive to create more housing inventory like I've said in a few of my other videos. There have been numerous incentives given to buyers which just created a larger buyer pool that tipped the scale in the wrong direction.
It’s time to give sellers a better incentive, possibly accepting certain types of financing that will allow for a great tax credit or something just to create some balance in the housing market. This method would be extremely helpful for first time home buyers as a lot of these finance types are catered to them.
Another factor that is depressing the supply of housing is the exclusionary zoning laws and practices. For example, the minimum requirements, dwelling unit restrictions, parking requirements and square footage requirements are all part of the build back better agenda for a zoning reform incentive.
Jumping to rental assistance. There is $45 billion in federal funds for the emergency rental assistance program, which is available in every state to balance the housing market and avoid any unnecessary evictions. As of mid-August, there has been roughly $4.2 billion that has been allocated due to delays in guidance. In most states, housing providers can apply for these benefits for their tenants as long as they have their permission, and they can receive up to 18 months of direct payments for rent. The most ideal way to get this done is for housing providers and tenants to work together and make sure they can get the maximum amount of aid they qualify for.
If you’re a housing provider or a renter, click the link in the description below to get more information about the available aid and what you can qualify for.
Andrew McManamon is a Michigan REALTOR® with Signature Sotheby’s International Realty and provides real estate services to Buyers, Sellers and Investors throughout SE Michigan including Livingston County, Oakland County, Washtenaw County, Genesee County & beyond. Andrew has become one of the rising stars of Michigan real estate agents. Prior to his real estate career Andrew was responsible for managing a senior living facility in Brighton, Michigan as a dining supervisor and an activities assistant. Andrew’s passion to help people is unlike any other, and he continues to strive to be best resource he can be. Andrew graduated from Cleary University in Howell, Michigan with a double major and currently resides in White Lake, Michigan.