President Biden on Monday proposed several initiatives in his budget aimed at lowering housing costs at a moment when high interest rates and rapid inflation have made buying and renting more expensive.
The proposals include a mix of measures, including tax credits for first-time home buyers and new incentives intended to encourage the construction and renovation of affordable housing.
If enacted by Congress, the budget would invest more than $258 billion to build or preserve over 2 million units, according to the White House.
The budget calls for creating a tax credit of up to $10,000 for middle-class first-time buyers. It would also provide $10 billion to create a new assistance program for “first generation” buyers.
Administration officials have previously urged Congress to provide up to $25,000 in down payment assistance for buyers whose families have not built generation wealth from owning a home.
The administration also proposed expanding assistance for renters. The budget would provide $32.8 billion in discretionary funding for a program that provides housing vouchers to low-income renters, a $2.5 billion increase over the 2023 level. It would invest $9 billion to establish a housing voucher program for youth aging out of foster care.
The new proposals also intend to lower costs by increasing the supply of new housing.
The budget would provide $20 billion to finance the construction of rental apartment buildings and create a new tax credit that would encourage the construction of starter homes. It would also expand an existing tax credit for the construction and rehabilitation of affordable rental housing.
“For too many hardworking families, it costs too much to find a good home, so we are working to lower costs and boost supply of housing nationwide,” Mr. Biden said in the budget proposal.
The budget would also provide $4.1 billion in funding for Homeless Assistance Grants, which would expand aid to about 25,000 additional households, according to the White House.
During his State of the Union address last week, Mr. Biden highlighted his proposals to reduce the cost of housing, and said he is cracking down on “big landlords” that are responsible for egregious rent increases.
Mr. Biden also said his administration was already taking steps to lower costs.
The Federal Housing Finance Agency is expected to begin waiving requirements for title insurance for certain borrowers who are refinancing, and the Consumer Financial Protection Bureau is planning to pursue new rules to address “anticompetitive” closing costs that lenders impose on buyers and sellers.
The housing market has had to contend with a sharp increase in interest rates, which have made new mortgages more expensive and have discouraged homeowners with cheap mortgages from selling.