Biden's housing plan will be front and center in 2024, top economic advisor signals

President Joe Biden's top economic advisor says housing affordability is moving to the top of the administration's economic agenda as it continues moving to ban “rental junk fees” and reduce closing costs to increase affordability for homeowners and renters.

The remarks by Lael Brainard, the director of the National Economic Council, signal the administration will continue making the case for affordable housing beyond Biden’s State of the Union address and that the issue will be one of the biggest he will be talking about on the campaign trail.

“Whenever the president is sitting at kitchen tables with Americans in every community, they all talk about housing affordability as a very important priority,” Brainard said in an exclusive interview with USA TODAY. “Housing affordability is front and center in, in the challenges of affordability, many families face.”

Brainard, who was scheduled to speak to the Urban Institute later Tuesday to champion the issue, said Congress should support Biden’s plan to the construct two million additional homes to solve the housing crunch and increase affordability for both renters and homeowners. She also said Congress should back measures that open up the housing market for first time homebuyers and families seeking to trade up or downsize.

“We really think this plan meets the moment and addresses one of the areas that pose the greatest affordability challenges for working families, which is a huge priority for the president,” Brainard told USA TODAY. “We already have a lot of excitement from builders.”

Soon after the State of the Union address, the National Association of Home Builders released a statement in support of the plan.

“Many of the initiatives proposed by the president to build and preserve an additional 2 million homes −including a new $10,000 tax credit for first-time home buyers, strengthening the Low-Income Housing Tax Credit and up to $25,000 in down payment assistance to first-generation home buyers − are important steps forward to address a national housing shortage of roughly 1.5 million units and to boost housing affordability,” wrote Carl Harris, chairman of NAHB, and a custom home builder from Wichita, Kansas.

In the aftermath of the Great Recession, home building fell from a peak of two million units in 2006 to just 585,000 in 2011.

An estimated 1.4 million units were started in 2023, down from 9% in 2022, according to Housing Wire, a trade publication.

Regulatory barriers and development fees have also pushed up costs. To account for higher line items, builders have shifted to building bigger single-family and higher-end homes.

In the 1990s, one-third of new homes were smaller than 1,800 square feet. Today it’s one in five, according to a study by Harvard’s Joint Center for Housing Studies.

The median home price in January was $379,100, an increase of 5.1% from one year ago, according to the National Association of Realtors, and the share of first-time buyers dropped from 31% to 28%.

In rental markets, where the median asking rent on new units is $1,800 per month, just 5% of all newly completed units in 2022 had asking rents at a level affordable to a household with the U.S median renter income, the study found.

Last fall the Federal Trade Commission proposed a rule banning misleading and hidden fees across the economy, including in housing rental agreements, and is currently working to finalize that rule, Brainard said.

“The president's going to keep talking about this plan," Brainard said, adding that this "really unlocks the housing market now and builds the affordable housing we need for the future.”

Swapna Venugopal Ramaswamy is a White House Correspondent for USA TODAY. You can follow her on X @SwapnaVenugopal

This article originally appeared on USA TODAY: Joe Biden housing plan 'front and center' signals top economic adviser