Following the recent elections in the United States, the Democrats have taken control of both chambers of the US Congress. According to observers, the decisive factor behind the election result was above all the persistently high cost of living, which prompted many voters to opt for a change in political direction. In the Senate, the Democrats secured at least 54 seats, whilst simultaneously winning a majority in the House of Representatives.
The incoming congressional leadership announced that easing the burden on private households would be given top priority. Senator Chuck Schumer of New York stated that the Senate majority would focus immediately on lowering expenses for citizens through the legislative process. Representative Hakeem Jeffries of Brooklyn also emphasised that his party intended to deliver on its promise to noticeably reduce the burdens of food, energy and housing costs.
Housing shortage as a primary burden on households
Housing costs represent the largest expenditure item for the majority of American families. According to surveys by the Urban Institute, nearly half of US citizens lacked sufficient funds to fully cover basic needs at the start of the year. Rents rose considerably faster than incomes over the past decade, with the shortage of affordable housing long having spread from expensive metropolitan areas to more affordable regions. James Whelan, president of the Real Estate Board of New York, suggested that the federal government should primarily facilitate financing, planning approvals and new construction, as well as dismantle regulatory hurdles.
Several initiatives to stimulate homebuilding are at the centre of forthcoming legislation. Measures under discussion include tax incentives, expanded rental vouchers and longer-term construction loans for multi-family housing through Fannie Mae and Freddie Mac. California Representative Maxine Waters, who is expected to take over the chairmanship of the House Financial Services Committee, called for investments of $1 trillion in federal housing programmes. These funds are intended, among other things, for homelessness assistance, the repair of existing buildings and the replenishment of reduced funding within the Department of Housing and Urban Development (HUD).
- —Expansion of tax credits and rental vouchers to protect low-income tenants
- —Introduction of longer-term construction financing for multi-family properties via Fannie Mae and Freddie Mac
- —Restoration of staffing capacity and programme funding in the federal Department of Housing and Urban Development
- —Reliable funding of the Section 8 voucher programme to strengthen private lenders
Stabilisation of the rental sector and progressive initiatives
Real estate industry representatives such as Erin Burns-Maine of the Community Preservation Corporation warn against restrictions on the Section 8 rent subsidy. Reliable state funding forms the foundation upon which private lenders can underwrite long-term commitments for housing projects. Alongside these support measures, other bills exist in Congress, including the Homes Act by New York Representative Alexandria Ocasio-Cortez, which provides for an annual budget of $30 billion to acquire distressed stock for permanently affordable housing.
