A three-point proposal for bipartisan action on affordable housing

Some 54 percent of adults say that they’ve seen their mortgage, rent, or utility costs rise in the past year, new polling by “Morning Consult” shows, while 52 percent of renters say they’ve had trouble paying their rent in the past six months.  

Housing is unaffordable for too many families, due in large part to a shortage of affordable rental homes and entry-level homeownership options. In addition, wages and incomes have not kept pace with rising housing costs. The result: Millions of low- and moderate-income families pay unsustainable rents, often comprising more than half their monthly incomes, while millions more can’t afford to buy their first home. Plus, the homeless population has swelled, with some half a million individuals experiencing homelessness on any given day.  

Earlier this year, Congress considered making major investments in housing through the reconciliation process and the Build Back Better Act. But the process was inherently partisan, and the act’s housing provisions were pushed aside.    

The good news is that there are many bipartisan initiatives that would meaningfully respond to the housing affordability crisis. The Bipartisan Policy Center has developed a comprehensive proposal for legislation that builds on the best ideas from Democrats and Republicans and that would increase the production of affordable homes, preserve the existing stock of affordable housing, and help families afford and access housing.  

 Let’s take these in turn.  

• Increase the supply of affordable homes. The nation has underbuilt housing by millions of homes, failing to keep pace with new household formations and rising demand. To overcome this shortfall, we must enlist the energy and resources of the private sector. To this end, Congress should take what works and build on it. That means expanding and strengthening the federal Low-Income Housing Tax Credit, our nation’s most successful affordable rental housing production program. Since its bipartisan enactment in 1986, the housing credit has harnessed private investment to support the construction and rehabilitation of some 3.6 million affordable rental homes. Congress should also create a new tax credit to encourage private investment in the construction and rehabilitation of homes for sale in distressed communities. These homes, designed to be affordable to lower- and moderate-income families, would serve as an entry point for homeownership while supporting neighborhood revitalization. Some of the biggest barriers to more affordable housing supply are local land-use policies that restrict the type of housing that can be built and add unnecessary costs to new construction. To help local communities overcome these regulatory barriers, Congress should create a new competitive grant program that encourages communities to develop and implement effective barrier-reduction strategies. Taken together, these steps would support the construction and rehabilitation of more than 2.5 million homes over the next 10 years.   
•  Preserve the existing affordable housing stock.  Preserving an affordable home is generally more cost-effective than building a new one and it also prevents displacing a household. To support this critical preservation goal, Congress should ensure that new rental homes financed through the Low-Income Housing Tax Credit stay affordable, rather than have rent restrictions expire after 30 years. It should preserve access to federally assisted housing by permanently authorizing and expanding the successful Rental Assistance Demonstration program, which enables local public housing authorities to tap into private resources to tackle deferred maintenance and improve public housing. Policymakers should also give the Agriculture Department the authority, flexibility and resources necessary to preserve affordable, multifamily rental housing in America’s under-resourced rural communities. 
• Help families afford and access housing. Federal rental assistance enables millions of low-income families to secure stable housing. Because of limited funding, fewer than 1 in 4 eligible households receives assistance. In response, Congress should encourage greater landlord acceptance of federal housing choice vouchers, establish a permanent program of one-time emergency assistance for families facing eviction and fund 500,000 new housing vouchers to help families with young children move to high-opportunity neighborhoods. Congress should also convert the mortgage interest deduction to a tax credit, which would benefit a much larger pool of taxpayers, particularly lower-to-moderate income households seeking to buy a home for the first time. And let’s not forget those who served our nation in uniform. Congress should act to remove barriers to constructing transitional housing for veterans experiencing homelessness while giving national homelessness organizations the funding and flexibility they need to help unhoused veterans.  

Housing policy is one of the most powerful tools in Congress’ arsenal. It drives economic prosperity for families and communities, yet it has not been a top bipartisan legislative priority in recent years. The new Congress that convenes in January should focus on how to improve housing affordability. Our plan gives lawmakers a comprehensive, politically feasible way forward.  

Ron Terwilliger is chairman emeritus of the Trammell Crow Residential Company and the founder of the J. Ronald Terwilliger Center for Housing Policy at the Bipartisan Policy Center.