SOTU | March 8, 2024

SOTU 2024: Housing Gets Its Day

Written by L. MacArthur and A. Kolachalam

Reading time: 5 minutes

Yesterday, just ahead of the State of the Union Address, the White House issued its official plan to lower housing costs for working families. Acknowledging both the difficult interest rate environment and a growing housing shortage, the plan addresses barriers to homeownership, preservation of existing housing, and the urgency of lowering costs for renters.

While housing has consistently been a priority of the Biden administration, it’s a pretty big deal that the President of the United States publicly set a national goal of 2 million affordable homes over the next 10 years.

Why is he doing that now? Aside from the U.S. being 3.9 million units short of housing, Biden makes a habit of chatting with folks he runs into and allowing those conversations to filter into his policy decisions. As of 2022, nearly one-third of Americans were cost-burdened. It’s hard to imagine that everyone he talks to is not experiencing some kind of pain from the housing squeeze.

“I know the cost of housing is so important to you. If inflation keeps coming down, mortgage rates will come down as well… but I’m not waiting,” Biden said. In addition to an annual tax credit to incentivize first time homeownership and rightsizing, he also wants to eliminate title insurance on federally backed mortgages – a barrier long understood to be artificially increasing closing costs for homebuyers. And, at least according to “housing Twitter” (or X, or whatever it is now) that was a good move, calling title insurance for federally backed mortgages “basically worthless and absurdly expensive.”

Slightly more provocative was the recurring theme of corporate imbalance. Biden called out Big Pharma (for being Big Pharma) and corporations (many of whom hail from the great state of Delaware) for not paying their fair share of taxes. In the real estate industry, at least, he is “cracking down on big landlords who break anti-trust laws by price-fixing and driving up rents”, while simultaneously “cutting red tape” so builders can get federal financing.

You can expect the multifamily real estate trades to push back on this characterization and other tenets of Biden’s plan (in fact, they’ve already started), but by-and-large the call for more and more affordable housing, and the not-insignificant resources this administration is throwing at it, is good news for housing providers, enthusiasts, and people trying to find housing nationwide.

As the plans begin to roll out, you can expect a deeper analysis of the policy recommendations included in Biden’s address, but for today, we are celebrating a big win for housing supply and are hopeful that more people can achieve the dream of a home in a community they choose. And 10% more Snickers to boot.