How Government Can Help with the Affordable Housing Crisis
Affordable Housing
With skyrocketing rent and home prices, affordable housing remains a critical issue worldwide. Millions of individuals and families struggle to find decent, reasonably priced homes.
Government intervention is crucial to creating sustainable solutions to this crisis. In this article, we’ll explore four ways that government initiatives can help alleviate the affordable housing crisis for both renters and homebuyers.
1. Adjust Subsidies to Keep Pace with Rising Costs
According to the Government Accountability Office, subsidies have failed to keep pace with drastic increases in the cost of housing. This includes subsidies for both developers and renters/homebuyers.
- Developer Subsidies: Help offset the costs associated with building or renovating affordable housing units, making them more economically viable.
- Renter/Homebuyer Subsidies: Help offset the costs of renting or buying a home, and include rent subsidies, mortgage interest deductions, housing vouchers, and programs to help renters pay for affordable housing options.
The GAO wrote, “Land prices increased 60% from 2012-2019, and the cost of homes more than doubled from 1998 to 2021. But HUD doesn’t adjust spending limits for grant recipients’ activities to keep pace with these increased costs.” Exemplifying this situation, the Self-Help Homeownership Opportunity Program (SHOP), which subsidizes the construction of affordable homes, has seen a sharp decrease in output, falling steadily since 2004.