Why Affordable Housing Is Critical to an Inclusion Strategy

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America has a national housing problem: to put it simply, there is too few houses to meet the demand from potential buyers. This mismatch between supply and demand created an affordability problem as house prices rose rapidly in many places across the country.

This could be good news for homeowners who are understandably happy to see the value of their property risesand sellers who can realize windfall profits. But for low- and middle-income families and young buyers looking for their first home, this dynamic threatens their ability to buy property and start making money.

We need more affordable housing – and since it will take time to resolve the supply shortage, we must start the necessary reforms now. As we celebrate National Home Ownership Month in June, it’s worth pause to consider the magnitude of the housing crisis and what steps we can take to address the problem.

According to a recent Freddie Mac’s economic analysis, the current supply of new and existing homes for sale is at an all-time low, with an estimated 3.8 million homes lacking to meet current demand. This shortage is caused by many factors, including a shortage of construction workers; high costs for lumber and other materials; low mortgage rates; other. As a result, the asking price for affordable homes has skyrocketed, according to Freddie Mac, with prices rising 12 percent in the past year alone.

The same analysis notes that the stocks of “entry-level single-family homes or starter homes” are the most acutely lacking. As a result, many young first-time buyers are struggling to acquire their first home, reducing their ability to gain a foothold in the market and begin to accumulate wealth. For historically marginalized populations such as black and Hispanic families, the problem is even more seriousputting them even further. According to Freddie Mac’s analysis, the supply shortage is likely to persist for the foreseeable future.

At a time when we are increasingly concerned about the inequality that plagues our country, the inability of many young Americans and minorities to obtain affordable housing only threatens to exacerbate these inequalities. The question is, what can we do to make the dream of our own home more accessible to a more diverse population?

This spring, the chairman of the National Credit Union Authority (NCUA), Todd Harper, named me a member of the company’s board of directors. NeighborWorks America, a not-for-profit organization founded by the US Congress dedicated to expanding access to home ownership and affordable rental housing in communities across the country. I am grateful for this opportunity to represent NCUA on the board, as well as for the opportunity to work on affordable housing and affordability issues that have been an ongoing concern for me throughout my career.

NeighborWorks is a longtime leader in providing creative and innovative solutions to affordable housing challenges. Funded in part by federal funds, NeighborWorks has a range of instruments at its disposal, including direct investment in new home construction and renovation ($ 9.3 billion invested in FY2020); providing counseling services on housing needs for families and individuals; and working with local organizations to meet community housing needs.

In addition, I plan to urge my fellow board members to consider changing the rules that currently restrict the supply of affordable housing. Regulatory reform is not the only response to a shortage of affordable housing, but smart adjustments to regulatory barriers where needed can go a long way in increasing the supply of homes. Likewise, based on my position on the NCUA board, I intend to explore reforms that will help more credit unions expand affordable housing lending.

Equally important, I look forward to using the bully from the podium to highlight the message that affordable home ownership must be a critical component of our national commitment to financial inclusion. Affordability is a civil rights issue for our generation, and attracting more Americans, especially young people and minority families, to decent and affordable housing is an important step up the ladder to financial opportunity.

The shortage of affordable housing did not appear overnight, but over decades, and there is no single reason for this crisis. Thus, there will not be a one-size-fits-all solution – we need a smart mix of investment, incentives and regulatory reforms to stimulate new apartment construction and renovation of existing homes and rented apartments to meet housing demand. …

I urge credit union leaders and other members of the financial services industry to pay special attention to the affordable housing crisis – and think about how we can play a meaningful role in addressing it.



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