White House pushes for bipartisanship in housing goals

Innovation and bipartisanship are essential components toward achieving the president's goals at opening homeownership opportunities and lowering nationwide housing costs, his key advisor said on Tuesday.

Following President Biden's State of the Union address last week, where he made housing costs a key talking point, Lael Brainard, the White House's director of the National Economic Council, discussed the reasons behind his emphasis on this specific part of the economy in an address at the Urban Institute on Tuesday.  

"Every place that we go around the country — whether it's red or blue or purple — everybody has a shared interest in being able to afford quality housing for their families," said Lael Brainard, director of the White House's National Economic Council.

The White House's current focus on the topic might also point to the significance the Biden administration places on housing issues in this year's election. Redfin research conducted prior to the State of the Union showed a majority of households saying home affordability might play a part in who they vote for president. Biden continued to opine on the same themes Monday in a speech at the National League of Cities annual conference, saying the country needed to "build, build, build" to reduce housing costs.

In her remarks, Brainard said underbuilding in the years since the start of the Great Financial Crisis, coupled with current interest rates and prices, created the sluggish market conditions and inventory shortage seen today. Construction has "never fully recovered." 

"The most populous generation in American history was aging into the housing market with demand outstripping supply construction skewed to the higher end, rather than starter homes needed for first-time home buyers and workforce housing," she noted. 

The president claims his plan would help create two million more affordable homes across the country. Brainard said pandemic-era innovations achieved at the local level in several states and smaller jurisdictions, such as New Hampshire and Jackson, Michigan, could provide impetus for development. A proposed $20 billion in innovation grants are featured in the president's initiative. 

"That fund reflects lessons we learned from the American Rescue Plan. States, cities and tribes committed over $18 billion to housing initiatives, with about $6 billion of that going towards housing production and preservation."

Brainard also emphasized how tax credits benefitting both buyers and sellers would help to unlock the housing market. While down-payment assistance and up to $10,000 of mortgage relief credit would be available to some buyers, Brainard said supply can only grow if a similar offer was made to sellers.

"We can't wait for mortgage rates to come down further. We need to provide relief to homeowners and home sellers today in order to get that inventory of starter homes on the market," she said.

Within housing related industries, the president's plans have been met with a range of reactions. While stakeholders have welcomed the new focus on affordable housing and issues affecting their businesses, many also openly criticized some parts of his proposal they found detrimental. 

Among the issues receiving pushback is a pilot waiver program that would eliminate the requirement for title insurance in some refinances. The American Land Title Association has publicly voiced opposition to the idea multiple times in the days since, including at a press briefing Wednesday. 

Brainard said Tuesday that the pilot was part of a larger conversation needed on how to make housing more affordable. "Good questions are being asked about very low-risk transactions," she said. 

"Our broader goal here is to try to find ways to introduce competition into closing costs more generally, because those closing costs have gotten quite high and are a real deterrent, particularly to first-time home buyers."