Home builders at work in Sacramento, Calif. Democrats in Congress are trying to pass a bill that would make the largest investment in affordable housing in history and try to boost construction of more moderately priced homes.
It used to be people complained about housing being too expensive in New York, San Francisco, or Washington, D.C. The problem is now way bigger than that.
“Unless you’re making a lot of money right now you can’t afford a house in this country,” Senator Jon Tester said at a recent hearing. He represents the state of Montana where now home prices and rents have been rising dramatically too.
“We’ve got businesses that can’t expand because there’s no workforce housing,” Tester continued. “There’s no housing for people who make regular wages ok?”
In their social spending bill, Democrats want to make the biggest investment in affordable housing in history – more than $150 billion.
The biggest problem facing the housing market is that there just aren’t enough homes for people to buy or rent.
In the aftermath of the housing market collapse and financial crisis more than a decade ago, about half of home building companies went out of business. Year after year since then builders just did not build enough homes. So now economists say we’re roughly 2 million homes short of what we need.
“Given the population, there are fewer homes available to rent or to own than we’ve had really at any time since World War Two,” says Jim Parrott, who was an economic advisor for housing policy in the Obama White House.
In the past, he says, Congress has spent money on things like first time homebuyer tax credits. But right now that would just juice up demand and makes things worse by pushing prices higher. He says it’s just basic economics: to make housing more affordable you have to increase supply by building a couple million more homes.
The spending bill aims to help with that underlying problem. By Parrott’s …….