HOWARD HUSOCK: It’s time for a massive effort to solve America’s housing crisis

Homeownership has long been a part of The American dreamBut this dream was postponed.

Ownership by households in their 30s is just 42%, more than 20 points below the national average.

The median age of all homebuyers is a record 59, and the age of a first-time buyer is 40 — up from 29 in 1981.

Top 3 Reasons Why Housing Is Unavailable in the US Market – It’s Not What You Think

eyeliner, Trump administration It is a floating mortgage for 50 years.

Although I don’t agree with this specific idea, I’m relieved that they are brainstorming ways to address the problem.

We need a Marshall Plan for Housing, a set of broad initiatives to make housing affordable and get the dream back on track.

The federal government can use its bully pulpit to bring about changes in red tape and regulations that hinder construction, and encourage policies that will increase housing and lower costs.

To start, the White House and Fannie Mae should instead promote shorter-term mortgages of 20 years.

As Ed Pinto of the American Enterprise Institute has argued, the 20-year loan is repayable: “When a 30-year loan leaves most homeowners saddled with another decade or more of mortgage payments, the cash flow freed from a short-term, repayable loan becomes available to finance a child’s post-secondary needs and later stimulate their retirement.”

The 20-year loan can be incentivized by a first-time buyer tax credit.

This will be especially important today when the vast majority of taxpayers no longer itemize their tax returns – which means they cannot take advantage of the mortgage interest deduction.

Banks increasingly bought up real estate as an investment and pushed up prices.

This deduction has always favored wealthy buyers of high-end homes anyway — so a targeted tax credit would help those who actually need it much more.

It’s also time for the Trump White House to roll back one of the key initiatives of Elizabeth Warren’s pet project, the Consumer Financial Protection Agency.

The CPFC has pressured banks to limit mortgages to “simple vanilla” mortgages, based on their rules or what consumers can afford.

Experts say Trump’s 50-year mortgage could saddle Americans with more debt

Adjustable rate loans and other “mortgage products” can be suitable for some buyers – who should have a choice of how much risk they want to take for entering the local market.

However, a low down payment may be difficult to come by for those who cannot take advantage of generous in-laws.

Those who do not have wealthy parents may turn to a “home savings account” — similar to the popular health savings accounts created by George W. Bush, which are worth about $59 billion and are tax-sheltered.

However, new housing accounts should only be for down payments, not for long-term maintenance and other homeowner needs.

Buyers today are also allowed to take $10,000 from their 401(k) without penalty to go toward the down payment on a home.

Perhaps it is time to raise this ceiling.

Of course, it goes without saying that even the most creative financing and incentives will not be able to meet our housing needs without confronting the most important problem: supply.

There are many reasons why there are not enough homes to start.

Regulation in many cities makes construction difficult.

More Boomer retirees own second homes.

Banks increasingly bought up real estate as an investment and pushed up prices.

Low turnover is another reason why Generation X buyers have such a hard time breaking into the market.

During the coronavirus outbreak, mortgage rates reached record highs and many were refinanced.

These owners have a strong incentive not to trade their 3% mortgage for a new home at a much higher price.

Another major reason: More and more of us live in small families or even alone.

The Census Bureau reported that between 2019 and 2021, the number of households increased by more than 2 million annually.

That means we need not just more housing, but more types of housing — many smaller units in particular, rather than the two-acre lot that is a single house common in many suburbs.

This is where Washington’s hard power reaches its limits.

Much of housing policy in the United States is made at the very local level, through planning boards and zoning boards.

That’s why outgoing Mayor Eric Adams deserves so much credit for New York’s “Yes City” rezoning, which will allow safe basement apartments and “accessory dwelling units” in parts of the city.

Accessory units — or “granny flats” — can also be a way for older couples to sell homes to younger families and downsize.

However, as part of federal efforts, a Marshall Plan for Housing could encourage these same changes nationwide: changing zoning to allow more housing; Or seizing undeveloped state land and offering tax incentives to build on it.

It’s the 18,000 municipalities across the country that often stand in the way of what might be called normal affordable housing — tiny homes on tiny lots, like those in the original Levittown, where homes are just 750 square feet.

Housing and Urban Development Secretary Scott Turner should urge localities to allow the construction of small, private, non-subsidized homes and apartment buildings, or what AEI’s Pinto calls “light touch density.”

It is much more likely to win local approval than the subsidized low-income housing that Democrats have long favored, starting with public housing in the social sector. Zahran Mamdani He wants to revive.

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Private construction is also less expensive; New housing units in California subsidized by the low-income housing tax credit can cost up to $800,000 per unit, a bonus for developers but not for many renters.

However, the costs of building any housing will inevitably rise as a result of another Trump policy: his 10% tariff on abundant Canadian lumber and wood products and a 25% tariff on kitchen cabinets and furniture.

Actual taxes cause what the National Association of Home Builders calls “headwinds” that hinder new construction.

As a builder, he must rethink these definitions.

Homeownership is a virtuous plot to make the nation better.

Landlords are more likely to preserve neighborhoods than renters, and are more likely to improve schools and services by participating in local government—the essence of American federalism.

Declining homeownership is an issue that must be addressed at the federal and local levels.

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But the Trump administration is able to take the lead, through tax breaks and encouraging construction.

The president can bring the dream back to life.

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