Biden administration unveils action plan for housing supply shortage

The Biden administration hopes to remove the shortage of housing issues collectively. Jim Parrott, a housing advisor of the former administration led by Obama, stated that the policies cover a lot of agencies and problems, and they are aimed at making housing more economical.

The Federal Housing Finance Agency and the Federal Housing Administration are exploring test pilots to boost the financing for small homes, increasing the supply of houses.

Fannie Mae, to encourage construction, would consider buying loans made to builders before the construction of housing. Presently, Fannie Mae buys mortgages for houses that are already built and are occupancy-certified. It makes it very later for small builders that do not have access to affordable financing.


The Biden administration also stated that it is considering moves to boost the availability of manufactured homes constructed inside factories and sent to their destinations instead of building on-site.

For instance, Freddie Mac is considering buying chattel loans that get secured through manufactured houses and not the land they are sitting on. Increasing financing for these types of loans would make it cheaper to borrow and boost liquid money to manufacture homes.

Regulations for land use and local zonings like minimum sizes of lots, parking requirements, and multifamily housing prohibitions have increased since the 70s. Shortage in housing has increased lately in San Francisco and Boston. Also, other places are facing shortages like Texas, Austin, Mich., and Grand Rapids.

There has been a high demand for homes in the past couple of years because of the lower mortgage rate and Covid-19. City dwellers looked to escape living in cramps and shift to suburban homes that were much more spacious.

The prices of homes and rent have increased significantly due to the shortage of homes and increased demand.