Summary
There is a chronic shortage of housing in the U.S. that is driving up housing prices and making it more difficult for lower-income individuals to find safe, affordable housing. Housing production in the U.S. is not keeping pace with expanding housing needs. The underbuilding gap in the U.S. now totals more than 5.5 million housing units. The impact of this growing problem of an under-supply of affordable housing is far-reaching and undermines economic growth—particularly in urban areas.
Key Takeaways
Safe, decent, and affordable housing is critical to the well-being of America’s families, communities, and businesses. The COVID-19 pandemic intensified the nation’s persistent housing crisis and heightened the need to expand the supply of affordable housing.
Having a robust housing finance system is critical to meeting the nation’s longstanding goal of ensuring decent and affordable housing for all. Debate over reforms to the government-sponsored enterprises (GSEs) continues, but no legislative proposals are currently under consideration.
Confronting the housing crisis requires a national transformation in housing policy, including a strategic plan to expand the supply of affordable housing.
Policymakers should look at the full scope of tools available to bridge the underbuilding gap as part of this national strategy, including:
RER has partnered with 16 other national real estate organizations to jointly advocate for policies that will help to increase housing supplies, grow jobs, and modernize our nation’s critical infrastructure.
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Enact Federal YIMBY Legislation: Proposed legislation like the bipartisan Yes in My Backyard (YIMBY) Act would help eliminate discriminatory land use policies and remove barriers to production of affordable housing.
Implement Property Conversion Incentives: The bipartisan Revitalizing Downtowns and Main Streets Act of 2025 (H.R. 2410) would create a market-based tax incentive for converting older commercial buildings to residential use.
Reform Zoning and Permitting Rules: Restrictive zoning and permitting rules create prohibitive barriers to constructing affordable housing and are exacerbating the housing crisis.
Extend and Improve OZs: Opportunity Zone (OZ) tax incentives have successfully mobilized private investment in historically underserved communities. Long-term extension and targeted reforms are essential.
Expand the LIHTC: The LIHTC is a critical federal tool for addressing the widespread lack of affordable rental housing. Expansions to the program are critical to maximizing its impact.
Pass the Housing Affordability Act: Senators Ruben Gallego (D-AZ) and Dave McCormick (R-PA) introduced the bipartisan Housing Affordability Act to expand the supply of affordable housing by increasing Federal Housing Administration’s (FHA) outdated multifamily loan limits.
The Underbuilding Gap