On January 17, 2024, Brookings Metro Senior Fellow Jenny Schuetz testified before the United States Congress’ Joint Economic Committee for a hearing titled “Rebuilding the American Dream: Policy Approaches to Increasing the Supply of Affordable Housing.”
To inform the committee on the role the federal government can play in increasing the nation’s supply of affordable housing, Schuetz began her testimony by outlining the four major challenges currently facing U.S. housing markets. These challenges fall both on the supply side (a persistent and widespread housing shortage; the aging stock of available homes) as well as the demand side (high rates of housing cost burdens and instability; a poor financial environment for first-time homebuyers).
The tight supply and high costs these housing challenges produce also create harmful spillover effects for surrounding communities and regional economies—all the more reason to pursue policies that can increase the supply of affordable housing. To that end, Schuetz offered four recommendations on how the U.S. Department of Housing and Urban Development (HUD) and other federal agencies can support better functioning housing markets:
- Coordinate and disseminate research on effective policy solutions, including the reasons behind declining construction productivity, the effectiveness of recent state and local zoning reforms, and the impacts of local affordable housing programs.
- Leverage relationships with other federal agencies and the real estate industry to monitor real-time data on the health of U.S. housing markets, including measures of household well-being.
- Encourage regional collaboration among housing authorities to preserve and expand affordable housing, which can join together otherwise fragmented efforts to address affordability.
- Build up HUD’s triage and rapid response capacity by creating an in-house team that monitors signs of impending housing market distress, in coordination with other relevant agencies.