HOUSING | 3 Funding Directives Would Make Biden’s Housing Plan Work

HSAP’s focus should encourage citybuilding

“Joe Biden in The White House, 28 January 2021.” By The White House. Public Domain

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Recently, the Biden Administration released its Housing Supply Action Plan (HSAP), aimed at closing America’s housing shortfall in five years. This essay outlines why and how Biden should separate suburbs from cities. In doing so, he can have extraordinary impact on the market where affordability has historically been created—within small, local developments. 

Here’s the problem: The Federal Housing Finance Agency (FHFA) oversees Fannie Mae and Freddie Mac, who act as the secondary market for nearly all owner-occupied residential home mortgages (and 50 percent of the total). FHFA is the 800-pound gorilla of American housing policy: Their rules control which homes get built and how, which effectively also dictates where they get built. FHFA has long been antagonistic toward incremental development, most obvious in their inability to create underwriting reforms that finance citizen-built affordable housing like Accessory Dwellings Units (ADUs). 

Further, it has long been known in the practitioner community that off-street parking mandates and large-lot single family zoning effectively eliminate or reduce otherwise ample opportunities for smaller-scale, more affordable housing. But there is a solution.

Here are three directives the Biden Administration can issue to make its HSAP work: