In a statement echoing its pledge to "Build Back Better," the Biden administration this morning announced a plan to create 100,000 additional affordable homes.

While it announces clear support for affordable housing development, the proposal is unlikely to bridge the immense gap between the supply of affordable housing and the need. The National Low Income Housing Coalition estimates that the country needs 7.2 million affordable housing units to fill the gap between supply and demand. For a comparison of ambition, New York City Mayor Bill de Blasio in 2014 proposed an affordable housing program that aimed to create or protect 200,000 housing units.

The statement also acknowledges the supply constraints caused by the increasing footprint of large, institutional, and corporate investors in the housing market1 —positioning the announcement on the YIMBY side of the spectrum of U.S. housing and development politics2.

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  • 1. The proposal also shows direct support for manufactured homes and duplexes, three-plexes, and four-plexes—the latter variety of residential density has been the desire of a series zoning reforms approved by a growing number of cities and states. To support these alternative housing typologies, the proposal notes a recent decision by the Federal Housing Finance Authority (FHFA) to accept loan delivery on single-wide manufactured housing.
  • 2. To create and protect 100,000 units, the proposal relies mostly on the financial mechanisms of federal institutions to unlock new opportunities for affordable housing. For example, the proposal would boost affordable housing supply by relaunching the Federal Financing Bank—a partnership between the U.S. Department of Treasury and the U.S. Department of Housing and Urban Development. The Federal Financing Bank allows state housing finance agencies to provide low-cost capital for affordable housing development. Another financing mechanisms included in the proposal would increase the Low Income Housing Tax Credit (LIHTC) investment cap. The LIHTC program was blamed by a recent article published by the Financial Times for creating some of the market for companies like Blackstone to make large inroads into the housing market.