The New Plan to Make Housing More Affordable

Affordability Crisis

A housing affordability crisis is raging in the United States. From every corner of the nation, to nearly every income class affected, record high home prices amid high demand and structural shortage of houses are making life difficult for prospective home buyers.

But a new policy proposal wants to change all that.

What Is the HOMES Act?

The HOMES Act, introduced by Representative Alexandria Ocasio-Cortez (D-NY) and Senator Tina Smith (D-MN), is designed to expand the nation’s affordable housing inventory for low- and middle-income Americans.

The legislation aims to establish a federal authority tasked with adding more than one million affordable homes. Of this new social housing, 40% would be available for extremely low-income households, with 30% bookmarked for low-income Americans, and the final 30% for middle-class families, per Business Insider reporting. The lawmakers compared the plan to a similar policy in Vienna, Austria.

Notably, the policy would directly enforce the 30% rule, a rule of thumb saying that one shouldn’t spend more than 30% of one’s income on housing costs. (The 30% rule has become much harder for Americans to follow in recent years.) For housing supplied under the HOMES Act, rent for all tenants would be capped at 25% of their income.

Back to Washington

Adding to America’s depleted housing inventory alone could help the affordability problem. But it’s unclear whether the HOMES Act has what it takes to garner the necessary support in Congress, especially with the presidential election looming.

Check it out

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