The Trump administration has hinted at declaring a national housing emergency. Treasury Secretary Scott Bessent floated the idea and President Trump confirmed it was being considered.
A “federal emergency” sounds dramatic and makes headlines. But here’s the reality: Explaining this might ease financing constraints for single-family home buyers, for example by subsidizing closing costs, but can it actually alleviate the financial and regulatory challenges that exist around affordability? Development takes place at the state and local level. A national declaration cannot rewrite zoning codes, shorten permit periods or force municipalities to approve more density.
Second, the label does not correspond to the real problem. What needs to be declared is a national AFFORDABLE housing emergency. The “emergency” is that the pathways to affordable housing development are limited in many ways, and for many players who play a role in the development.
Anyone who has worked in this space knows the reality. Assuming projects get the often tricky green light from their local planning agencies, they can then get stuck in permitting purgatory, with months or even years lost to administrative backlogs while both hard and soft costs increase.
Affordable housing lives or dies in the financing structure. Developers are juggling debt, loans and layers of state and federal incentives just to close. When interest rates rise or construction costs rise, that delicate balance can collapse. And this is where national policy conversations need to dig deeper.
A state of emergency could spotlight this problem, but unless serious action is taken to stabilize and expand financing tools, consistent funding for rental subsidy programs, and continued liquidity through FHFA and HUD, it will not unlock the production of affordable units at the scale America needs. And according to some reports, the capital stack that holds together affordable projects is currently under enormous pressure.
Furthermore, HUD’s 2023 report to Congress entitled “Worst Case Housing Needs” found that there are only 57 affordable and available rental units per 100 renter households for those with an AMI of 50%. Add the qualification ‘sufficient’ and the number drops to less than half. Availability is even worse for households with the lowest incomes. This imbalance is nothing short of an emergency.
The National Low Income Housing Coalition is doing an excellent job of highlighting the issue on a regional level here: https://nlihc.org/gap
So yes, there is an emergency for low-income Americans. And yes, there is an imbalance in the supply on the market. But there is a capital problem. A clear example: emerging developers represent only a small part of the affordable housing development pipeline. Not because they don’t have ideas or local knowledge, but because they face barriers to capital.
The financing structure is a complex set of tax credits, bonds and private equity, which requires a deep legal, political and financial infrastructure to navigate and is significantly cost-prohibitive to implement. Larger, established companies have these resources. Local and emerging companies often cannot survive without significant institutional support and capital.
And without deliberate effort, emergency measures could worsen the imbalance. If Washington cuts some red tape but does nothing to expand access to capital, the result will be more deals flowing to well-capitalized incumbents, while emerging and local developers remain sidelined. That usually means a greater chance of community pushback, and weaker integration of housing and local plans.
The mission must be to change that dynamic and work to rebalance it. Structure creative, multi-layered financing that gives local developers a real seat at the table and welcomes impact investors who want to help reinvigorate housing opportunities. This will not only provide affordable housing, but can also create prosperity in communities that have been excluded from ownership for far too long.
Declaring an affordable housing emergency should not be just a consideration; it should be a mandate. And to summarize my assessment of the landscape:
- There would be no national housing emergency if the path to affordable housing was not hampered in the first place by outdated regulations and guidelines. We need (at least) statewide standards.
- Affordable housing is the cheapest way to solve the housing shortage. We must protect the structures that keep capital flowing into this sector.
- Local and emerging developers should be considered part of the solution. Without them, any effort at affordable housing risks repeating old patterns, building units but not building wealth or leadership in the communities that need both.
The affordable housing crisis is real. The affordability gap puts pressure on families and stifles communities. Our company is already working to solve this problem in Newark, Houston, Los Angeles, Atlanta and dozens of other markets where determined developers and AWC’s creative financing are bringing affordable units online.
The question is whether federal policy will help scale up that work, or whether the “national emergency” will remain just a headline.
Victoria Gousse is Senior Vice President Investments at A. Walker & Co.
This column does not necessarily reflect the opinion of HousingWire’s editorial staff and its owners. To contact the editor responsible for this piece: [email protected].
Related
#national #housing #emergency #lets #honest #means