Today’s housing market isn’t meeting most Americans’ needs. Historically high prices for homes—both to rent and own—are driving up monthly costs and driving down monthly savings. Homeowners who wish either to downsize or to move into larger homes feel locked in given the high cost of mortgages. And a record number of people are precariously housed (PDF) and fearing imminent eviction or are unable to find adequate shelter at all. A common thread for all these situations is the lack of affordable housing, a result of many years of underbuilding and underinvestment, from the public and private sectors.

Given the scale of the challenges, a comprehensive and significant national response is needed. In our new report, A Road Map for Affordable and Stable Housing for All, we suggest an array of administrative and budgetary federal policy levers that could repair the housing market and make it work for families now and in the future. To address pervasive housing unaffordability, federal policymakers must address the immediate and pressing housing affordability challenges of today while preserving and producing almost every type of housing to create the housing market for the future. To strike this balance, policymakers will need to implement many of the levers identified in the road map while considering three cross-cutting strategies.

1. Create housing that matches future household needs

   Projections of household formation in the coming decades show there will be more households of color, more senior households, declines in homeownership, and more renters, especially among retirees. Addressing these housing trends will require housing types that aren’t currently being built at scale.

   Growth in households of color will require a better understanding of how to make ownership a possibility for households with less access to generational wealth—pointing to an increased need for starter homes and down payment assistance. Growth in retirees who are likely to be renters and have less retirement funds points to needs for more multigenerational housing options and expansion of federal programs that provide housing for older adults, such as the Section 202 program. And declining homeownership trends will require a better understanding of how to support new forms of land and asset ownership that offer stability of tenure outside of homeownership, including land trusts and cooperative housing, at scale.

2. Ensure new and preserved housing is sustainable

   Climate change and its effects present a national threat and outsize risks for households living in especially vulnerable areas. The housing sector, which itself contributes to greenhouse gas emissions, could become greener and more resilient. 

   To accelerate sustainability, the federal government can leverage existing programs and land to make developing new housing supply more cost-effective in infill locations, such as along existing transit corridors, rather than contributing to sprawl. New housing supply can happen quickly and with fewer emissions through preserving existing housing stock and developing modular and manufactured homes. Finally, federal investments through the Inflation Reduction Act, including the Greenhouse Gas Reduction Fund, can support resilience improvements for households with the lowest incomes, who often live in areas prone to climate effects and have little savings to rebound and recover when emergencies happen.

3. Repair neighborhood segregation and disinvestment

   We must also make housing investments that help end generations of disinvestment in neighborhoods of color to improve housing stability, affordability, and quality for all. New housing development must include meaningful engagement of households who have suffered from the effects of neighborhood disinvestment, including crime, discrimination, environmental issues, and poor-quality schools.

   The US Department of Housing and Urban Development’s Affirmatively Furthering Fair Housing interim rule includes a focus on robust community engagement and could provide a starting place for many communities across the country. Such discussions can accompany new federal investments that unlock the potential for development in these neighborhoods, like those proposed in the Neighborhood Homes Investment Act.

Enacting a coordinated, comprehensive national housing strategy

Many of the policy approaches highlighted in the road map can advance more than one of these goals, offering multiple benefits. Transit-oriented development provides positive environmental outcomes while improving mobility to jobs and bettering people’s lives and neighborhoods. An emphasis on housing preservation could improve homes in long-disinvested neighborhoods, offer new opportunities for wealth building, increase the supply of starter homes, and cut down on greenhouse gas emissions. Addressing climate risks in neighborhoods of color can help to stop a renewed cycle of devaluation.

Our roadmap includes practical ways to move forward quickly by expanding and modifying existing programs and by fast-tracking currently proposed legislation and offers many new ideas that can contribute to a strong, affordable, and robust housing sector. Using these approaches, federal policymakers can ensure we don’t replicate the challenges we face now, but that we thoughtfully build the housing market we want to have—one that offers all Americans housing that is affordable, stable, and provides a path to economic mobility.