Warren: Federal government needs to ‘step up’ on housing crisis
By Tréa Lavery, MassLive
Despite Massachusetts’ efforts to fight the housing crisis, including the massive $4.12 billion bond bill that Gov. Maura Healey proposed in October, homes remain unaffordable to a large portion of the state’s population.
That’s because a local or even state government isn’t powerful enough to fix the crisis on its own, according to U.S. Sen. Elizabeth Warren.
“It is time for the federal government to step up, not to tell local governments what to do, but to be a good partner for communities that are prepared to act,” Warren, D-Mass., said during a speech to the New England Council in Boston Monday.
Warren said that frequently when she speaks to constituents anywhere in Massachusetts, they say affordable housing is their number one concern. For employers, the biggest challenge is finding workers because of the high cost of housing.
Nationwide, 7 million more homes are needed to house U.S. residents, she said. In Massachusetts, up to 200,000 new homes will need to be built over the next six years to address the housing shortage and bring prices down.
However, last year, only 17,692 housing units were approved in the state.
“That is not even one-tenth of the units that we need, just to get us to a point where we’re even not where we have excess capacity,” Warren said. “Even at this rate, we can’t even hold steady on this crisis. This crisis will continue to grow.”
Warren gave several reasons why intervention from the federal government was necessary. The first, she said, it’s the only way to raise enough revenue to make the needed changes. A bill she filed that would put a 15% minimum corporate tax on companies that report over $1 billion in earnings could be used to stimulate the creation of more housing, Warren said.
In addition, improving the housing landscape could relieve pressures on other issues the federal government pays for, such as Medicaid, she said.
Finally, Warren said increasing the housing supply was a simple question of the country’s values. She pointed out that while the housing crisis affects a large portion of the population, it disproportionately hurts low-income residents and people of color.
“For less than 5% of the annual defense budget, for example, we can create a fund that year after year after year could be used to increase and upgrade the supply of housing nationwide,” she said. “If we’re serious about equity, both generational equity and racial equity, then creating more housing opportunities is a great place to start.”
Proposed legislation that Warren has been pushing which would contribute $40 billion annually to the construction of affordable housing would kickstart that change, she said. That money could fund incentives for communities that modernize building codes and improve zoning, grants to help homeowners build accessory dwelling units, commonly known as “granny flats,” and contribute to construction projects to allow them to create more units.
“The price per unit for apartments and condos comes down if you’re willing to make even a modest upfront investment,” Warren said. “Housing is local, but there is an important role for the federal government to be a good partner to boost housing supply. It’s time for us to start building out that role.”
Warren pointed out that in addition to the shortage of homes, another issue exacerbating the housing crisis is the trend of corporate landlords picking up homes for sale, often ones that are being sold after a foreclosure, and using them as an investment or astronomically raising rents for existing tenants.
She said that by 2030, corporations are expected to own up to 40% of single-family rental homes in the country.
“They use their immense reserves of wealth and their deal-finding algorithms to swoop into markets and snap up homes that otherwise could have gone to first-time homebuyers,” Warren said. “For someone selling a home, a corporate all-cash offer is often too sweet to pass up.”
While Warren acknowledged that passing legislation like this would be difficult, earlier this year, President Joe Biden’s administration released a blueprint for a Tenant Bill of Rights, which would implement protections such as fair leases, anti-discrimination measures, the right to organize and eviction protections.
In addition, Biden has proposed new measures to prevent rent gouging and asked the Consumer Financial Protection Bureau and Federal Trade Commission to collect information on unfair practices.
“This is a big, big problem,” Warren said. “Solving this crisis requires creative solutions and persistence from us at all levels of government.”