A highly diverse group of more than 40 housing officials today sent a letter to President Biden asking him to create a Presidential Council on Housing Affordability. Leaders represent all facets of the housing industry, from affordable housing advocacy organizations to industry stakeholders.

The full text of the letter is as follows:

Dear Mr. President:

We are writing to respectfully request that you convene a Presidential Council on Housing Affordability. Despite gains in single-family and multi-family home construction levels, housing prices are rising rapidly. Due to more than a decade of housing production shortfalls, supply shortages, rising labor and material costs, and pandemic-related supply chain issues, the Housing costs are less affordable for everyone across the income spectrum, especially for those least able to afford it. . Housing is a continuum. Lower homeownership rates lead to higher rents where demand exceeds the already severe shortage of affordable housing for the lowest income households. This in turn can increase homelessness among those who already struggle to find housing.

The high cost of housing contributes, in part, to the current high levels of inflation and makes home ownership and affordable rents out of reach for many. Housing is the largest component of the Consumer Price Index, or CPI, comprising 33% of the basket of goods used to determine the index, which is commonly used to measure inflation. As you know, inflation has an extremely regressive impact, disproportionately affecting low- and middle-income people compared to high-income people. For first-time home buyers, the impact is severe. For every one percentage point increase in mortgage interest rates, monthly payments increase by 13-14%.

Unfortunately, the primary tool for controlling inflation is the Federal Reserve’s ability to raise interest rates, which negatively impacts housing affordability. While this may be necessary to control inflation, it makes the challenge even more difficult for those who need a mortgage to afford a home, which also has a ripple effect on the rental market, as many of these households will now be competing for rental accommodation. . Higher interest rates also increase the cost of building, preserving and operating rental housing.

Higher interest rates will also reduce the construction, development and preservation of much-needed housing for all types of housing, which will exacerbate the supply shortage and undermine cost reduction efforts. According to the National Association of Home Builders, costs for home building materials are up 21% year over year. Higher interest rates will not yield more lumber and building materials. Falling supply in a market still short of inventory despite hard-won gains in homebuilding does not bode well for a recovery.

To address housing affordability, we respectfully request that you convene a Presidential Council on Housing Affordability, comprised of a wide range of external stakeholders and officials from the Ministries of Agriculture, Trade, Health and Social Services, Housing and Urban Development, Labor, Treasury, and Veterans Affairs to develop practical inter-agency solutions.

Truly,

National Housing Conference

AARP

AFL-CIO Housing Investment Trust

Atlanta Neighborhood Development Partners California Housing Consortium

California Housing Partnership

Center for Community Advancement

cinnamon

Community Preservation Society DreamKey Partners

Eden housing

Fahe

Granite Housing Strategies, LLC

Grow South Dakota

Habitat for Humanity International

housing assistance council

Housing Partnership Network

Local Initiatives Support Corporation/National Equity Fund Investment Fund for Low Incomes

Prefab Housing Institute

Mortgage Bankers Association

National Alliance to End Homelessness

National Association of Home Builders

National Association of Local Housing Finance Agencies National Association of Realtors®

National Coalition of Homeless Veterans National Community Renaissance

National Community Stabilization Trust National Council of State Housing Agencies National Housing Resource Center

National Leased Housing Association National Low Income Housing Coalition National Multifamily Housing Council National NeighborWorks Association National Urban League

New US funding

New York Housing Conference

ROC United States

S3 Consulting Services

S.K.A. Marine

Affordable Housing Stewards of the Future

Ready for growth action

Urban Land Institute Terwilliger Center for Housing


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