Millions of American citizens are failing to leverage the benefits of homeownership due to the excessive shortage of affordable housing. This shortage is visible, especially in affordable housing, where the low and middle-income families, young first-time buyers, and common people are losing their hope of owning a permanent home to fulfill their dreams.
Therefore, the US should do better. The United States requires more than 5.5 million housing units to solve the affordable housing crisis in the nation. Developing more homes for the low and middle-income buyers as well as young first-time buyers, while also providing affordable financial tools so that they can afford the homes without being cost-burdened is necessary.
Even though the affordable housing crisis is not new in the United States, the situation became worse during the COVID-19 pandemic. As a result, developers were forced to stop building small and affordable homes in favor of luxurious homes where they can generate more profit. Here are some ways the United States can tackle the affordable housing crisis.
Focus on the Manufactured Housing
Modular, manufactured, precut and panelized homes are one of the most important aspects of affordable housing, says Maxwell Drever. Built partially or entirely in warehouses and assembled on the site, these different forms of prefabricated dwellings are one of the most attractive solutions as they require less expensive to produce.
Before 41994, roughly 220,000 manufactured homes used to ship yearly. However, nowadays less than 100,000 are manufactured yearly. Similarly, panelized, modular, and pre-cut homes constituted more than 7% of new single-family homes compared to just 3% today. But due to the encouragement of the Government, the production of affordable housing has been increased in these areas. Building code flexibilities and expanded zoning can undoubtedly enhance the development of manufactured housing.
Improve Financial Condition for the Existing House
Maxwell Drever says millions of affordable housing in the existing stock needs to be repaired carefully. Many people in the market of affordable housing cannot just purchase a house and repair it on their own due to the complexity of mortgage financing. Most lenders will lend only when the current value of the property is relevant. As a result, this doesn’t allow for adequate repairs. The potential homebuyers might miss the chance to purchase a home to corporations or investors who are capable of purchasing the homes in bulk, financing the repair, and then renting the property. As a result, they prohibit the property from returning to the market as affordable housing.
One of the best ways to tackle affordable housing is by upgrading and repairing the homes before they arrive in the market. Therefore, the owners won’t need to finance the construction and repair.
Lift Condo Lending Restrictions
Financial incentives can undoubtedly encourage the builders and developers to develop more affordable homes that are within the financial condition for many first-time buyers. Possible incentives will save the gamut from subsidies and federal support so that they can create better terms on local restrictions and regulations. The fewer restrictions and regulations will increase the building costs.
Conclusion
Affordable housing is undoubtedly one of the biggest concerns in the United States. If you have any other questions, make sure you comment below.
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