A bipartisan initiative in the US Senate has resulted in the reintroduction of the Affordable Housing Credit Improvement Act, three weeks after a similar endeavor occurred in the House of Representatives.
The new version of the legislation seeks to increase the number of credits allocated to each state by 50% for the next two years and to make the temporary 12.5% increase secured in 2018 permanent. It would also increase the number of affordable housing projects that can be built using private activity bonds and upgrade the Low-Income Housing Tax Credit (LIHTC) program to better serve at-risk and underserved communities including veterans, victims of domestic violence, and rural Americans.
Reps. Darin LaHood (R-IL) and Suzan DelBene (D-WA) reintroduced the bill in the House on April 8, where it has a bipartisan co-sponsorship of 119 legislators. The Senate version was introduced by Finance Committee Ranking Member Ron Wyden (D-OR) and Sens. Marsha Blackburn (R-TN), Maria Cantwell (D-WA) and Todd Young (R-IN) and has 30 co-sponsors.
Make housing more affordable by blocking mega-investor groups from buying up homes in areas where housing costs are NOT affordable for most people.
Alternatively, restrict any single investor from owning more than 8 homes in areas where housing costs are NOT affordable for most people.
Yes, some investors buy rental units for their own income and for a retirement payment plan. But mega-investor groups bought up 28% of all homes for sale during 2019 to about 2023, which pushed housing costs far higher. In some new developments, mega-investors bought up every single home, and no regular home owner got to buy any home at all in some of those new home developments.
This rising trend of big money buying up homes and driving prices even higher is an obvious attempt to make homes unaffordable for most people, driving them into being renters, sometimes permanently.
So stifling investment in real estate is the answer to making housing more affordable? That’s not capitalism. More like socialism. What about people getting better educated and/or a good paying skillset? Your answer is to just reward underachievement! Too many people think their first house should be a new 2,000 sq ft house. How about starting small like many of us did and in older homes. 900 sf to 1400 sf to 2000 sf to 3700 sq ft. I upsized every 7 years with equity and savings. I worked 2 jobs. Imagine that! I worked 2 jobs for over 21 years. But you want to reward those who didn’t work for it. Move to North Korea.
Low interest rates drove investors to buy up residential properties for rentals. When they can only get 1- 2% on safe fixed income investments, they have two choices to make money- gamble in stock market or buy real estate.
When interest rates are at a more normal level, the fixed income securities become more appealing than real estate. That’s why when interest rates rose you saw a lot less mega buyers gobbling up or building whole subdivisions for the purpose of renting.
There’s more to it in terms of rent hikes. Artificially low interest rates when an economy has recovered from a recession, damages the lives of the lower income and puts huge profits in the pockets of the wealthy.