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Senators Introduce Housing Supply, Affordability Act

Monday, April 5, 2021

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Late last month, a bipartisan group of senates introduced the Housing Supply and Affordability Act, which would authorize an annual grant program for local governments to increase their supply of local housing over the next five years.

Senators Amy Klobuchar (D-Minnesota), Rob Portman (R-Ohio) and Tim Kaine (D-Virginia) put forth the program on March 23 and note that it aims to provide technical assistance to help states, localities and regional coalitions increase housing supply, improve housing affordability and reduce barriers to new housing development while avoiding the displacement of current residents.

“All Americans deserve access to an affordable home, but unfortunately the nationwide housing shortage has created an affordability crisis for far too many,” said Klobuchar in a press release. “These grants will help communities identify their housing challenges, improve affordability, and implement unique solutions to expand their housing supply.”

According to the officials, an estimated 2.5 million additional housing units are needed to match long-term housing demand in the country.

Smileus / Getty Images

Late last month, a bipartisan group of senates introduced the Housing Supply and Affordability Act, which would authorize an annual grant program for local governments to increase their supply of local housing over the next five years.

In response to this need, the Act will establish a $300 million-per-year grant program to award money for planning and implementation to municipalities. The bill also directs the Department of Housing and Urban Development to provide recommendations on strategies that states and localities should consider in developing and implementing these plans, including how to best inclusively engage with community members on housing reforms.

Finally, the bill requires routine reporting from applicants regarding the use of these grant funds, convenes a learning group of applicants and grantees to facilitate problem-solving regarding housing reforms and requires a study from HUD describing the impact of the program and outlining the most successful strategies in expanding the supply of housing.

Bloomberg reports that the bill could find its way into the $3 trillion infrastructure bill that’s expected to come out of the White House in the near future.

“The economic impact of the coronavirus pandemic has exacerbated the housing affordability crisis in Ohio and cities across the nation. To truly address the issue of housing affordability, we need to look closely at what’s happening at the local level, and that is exactly what this bill does,” said Portman.

“This bipartisan piece of legislation will provide localities and municipalities with resources to expand the supply of housing and increase affordability. As we turn the corner on the coronavirus pandemic, let’s make sure that housing affordability and availability is at the center of our economic recovery efforts.”

Contributing Factors

The housing supply shortage has been prompted by many factors, including materials shortages and skilled worker shortages. While those issues encompass more than the residential segment, they are also at the top of the list of issues for the industry as a whole.

Early in March, Reps. Jim Costa (D-California) and Jodey Arrington (R-Texas) sent a letter to President Joe Biden and the Department of Justice bringing attention to the building materials prices and supply shortages, urging the administration take action.

The lawmakers used data provide by the National Association of Home Builders and particularly pointed to the lumber shortage and its impact on the prices of new single-family homes.

“NAHB’s top priority is to find solutions that will ensure a lasting and stable supply of lumber for the home building industry at a competitive price,” the association said in its reporting of the letter. “NAHB is urging the Commerce Department to investigate why lumber production—particularly sawmill output—remains at such low levels during a period of prolonged high demand.”

Also last month, the Associated Builders and Contractors released an analysis of data from the U.S. Bureau of Labor Statistics that revealed that, in 2021, construction companies will need to hire 430,000 more workers than what they employed in 2020.

According to economic estimates, construction spending is likely to reach $1.45 trillion in 2021, up 1.3% from 2020. Assuming this occurs, employment demand will increase by 430,000 this year from actual employment of 7.829 million in 2020.

“According to forecasts analyzed during the COVID-19 pandemic, an impressive 430,000 more construction workers still need to be hired in 2021 to meet the demand, evidence that the construction industry is powering America’s recovery and economic engine,” said ABC President and CEO Michael Bellaman.

“ABC’s annual forecast incorporates several variables that may affect the U.S. construction spend and employment demand over the next few years. These variables, which range from inflationary pressure, rising commodity costs and other global supply chain concerns to the regulatory and legislative trajectory of a new administration and the vaccine rollout domestically and even globally, are considered in the ABC cone of probability.”

   

Tagged categories: Good Technical Practice; Government; Grants; Housing; NA; North America; Residential Construction

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