For years, affordable housing has been a hot-button topic throughout the United States. It is essential in large cities like NYC and L.A. However, virtually every place with a high population density is struggling to address this increasingly common issue.
Fortunately, federal governmental groups in 2021 have taken a proactive approach to the affordable housing crisis. These entities are looking to curb the current problem while also addressing future generations of growth.
What is Considered to Be Affordable?
According to the federal government, housing is “affordable” if it costs 30% of a resident’s monthly income or less. This guideline takes both rent and utilities into account. Most affordable housing is purpose-built for low-income families who earn 60% or less of the area median income (AMI).
Affordable Housing Credit Improvement Act of 2021
April 2021 saw the introduction of two substantial bills into Congress that, if passed, will “…promote equitable development and further fair housing by investing $2.5 billion in fair housing enforcement and requiring grantees of federal funds to consult with local fair housing agencies when applying for investments,”
On April 15, 2021, a group of bipartisan members of the 117th Congress (2021-22) cosponsored the Affordable Housing Credit Improvement Act of 2021 (S. 1136/H.R. 2573) to amend the Internal Revenue Code of 1986 in reformation [ES1] of the Low Income Housing Tax Credit.
The bill would provide a 50% increase in the 9% Housing Credit authority, which would spur the construction of affordable housing, provisions to help preserve existing affordable housing units, and additional administrative tools for agencies, among other needed changes to the program.”
HUD Allocates $700M to National Housing Trust Fund
Another notable introduction to 2021 affordable housing legislation came with The U.S. Department of Housing and Urban Development (HUD) allocation of nearly $700 million to the national Housing Trust Fund (HTF). The historic increase by almost double over the 2020 allocation of $326.5 million would produce more affordable homes for extremely low-income households.
Benefits of These Policies: Demand for New Construction
Perhaps the most obvious impact of new government policies on affordable housing will spur new construction. In response, developers will be able to bid for contracts to build new housing. They must decide how many units to build at each location. However, all this new development will be subject to local zoning guidelines, which can be restrictive, especially in major cities.
To complete these projects, developers and contractors will need access to quality building supplies. Without them, project lead times can become protracted, resulting in lost revenue and other severe financial consequences.
Although most zoning regulations will still exist, these new government policies will positively impact the construction industry. General contractors, major developers, and everyone in between are sure to see new opportunities to participate in lucrative projects. These entities will also have the chance to impact the lives of thousands of people positively.
The Future of Affordable Housing
As you can see, new government policies will rely on some tried-and-true methods for creating affordable housing. These practices encourage new property construction reserved for low-income tenants.
For decades, EFY Sales, LLC, has been a staple in New York Metro region. We have supplied general contractors and developers with high-quality bathroom and kitchen cabinetry for affordable and market rate housing projects. We also offer custom casework, specialty items, and bathroom accessories.
Our team believes the exciting legislative developments in 2021 alone could spur significant growth in the New York construction industry. We look forward to providing clients with top-quality products and doing our part to help change the affordable housing landscape.
Sources:
Affordable Housing Credit Improvement Act of 2021
National Low Income Housing Coalition (HLIHC)
https://www.nhlp.org/resources/lihtc-admissions-rents-grievance-procedures/
https://www.nationalreview.com/2021/08/more-affordable-housing-yes-in-my-backyard/
https://www.congress.gov/bill/117th-congress/senate-bill/1614/text?r=18&s=4