Biden suggests bigger federal role to reduce housing costs
Economists in the Biden administration are calling for more aggressive federal action to drive down costs for homebuyers and renters, taking aim at one of the biggest economic challenges facing President Joe Biden as he runs for reelection.
The policy proposals in a White House report released Thursday include what could be an aggressive federal intervention in local politics, which often dictates where homes are built and who can occupy them. The administration is backing a plan to pressure cities and other localities to relax zoning restrictions that in many cases hinder affordable housing construction.
That recommendation is part of a new administration deep dive into a housing crisis, decades in the making, that is hindering the president’s chances for a second term. The proposals, included in the annual Economic Report of the President, could serve as a blueprint for a major housing push if Biden wins a second term.
The report includes a suite of moves meant to reduce the cost of renting or buying a home, while encouraging local governments to change zoning laws to allow development of more affordable housing.
“It’s really hard to make a difference in this space, in this affordable housing space, without tackling land use regulations,” Jared Bernstein, chairman of the White House Council of Economic Advisers, said in an interview.
Bernstein added that administration officials believed many local leaders were encouraging a bigger federal role in zoning reform — which can help override objections from local groups that oppose development.
The administration has acknowledged that it has limited power over local zoning rules, which tend to dictate the design and density of homes in particular neighborhoods. Most of the president’s recommendations for expanding supply involve using the federal budget as a carrot to encourage local governments to allow more building.
The focus on housing, and the endorsement of a comprehensive set of policies to increase its supply and affordability, could serve as a blueprint for a potentially bipartisan effort on the issue if Biden wins reelection. It also could add momentum to a housing reform movement that is well underway in legislatures around the country.
The report documents how, over the past decade, home prices have outpaced wage growth significantly for American families. That has pushed ownership out of reach for middle-income home shoppers and left lower-income renters on the brink of poverty.
About 12 million households — now spend more than half their income on rent. Prices are so high that if a minimum-wage employee worked 45 hours a week for a month, a median rent would consume every dollar he or she made.