President Biden is proposing to spend billions of dollars to build new lower cost housing and or to create more rental units. The country is short about 5 million homes, which is why prices have gone through the roof. There is just far more demand than supply, which is Economics 101 related to sky rocketing prices. Biden is proposing to add 2 million homes and apartments to help fill the gap. The problem with all of this is that sometimes government good intentions do not always work as planned. Many Government projects built after World War II are today massive slums. We really should not go down that road again.
However, what Biden is proposing is to do is the following:
Constructing or rehabilitating rental housing units using federal subsidies;
Expanding and strengthening the low-income housing tax credit;
Offer tax credits to those who build and rehabilitate homes for low- and middle-income homebuyers and homeowners;
Incentivize the removal of exclusionary zoning and harmful land use policies;
The most controversial of these notions is rezoning presumably away from Single Family housing to higher density apartments and condos. This could be fine in repurposing many commercial properties that may today be obsolete. It could be too that in big cities with homes that are 75 or more years old, it is time to scrape those homes to build apartments and condos. Clearly, we do need to add housing units to meet supply. Let's just hope that the heavy hand of government makes things better instead of worse.
