The New Plan to Make Housing More Affordable
By: Anneken Tappe · September 20, 2024 · Reading Time: 1 minute
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.
Please understand that this information provided is general in nature and shouldn’t be construed as a recommendation or solicitation of any products offered by SoFi’s affiliates and subsidiaries. In addition, this information is by no means meant to provide investment or financial advice, nor is it intended to serve as the basis for any investment decision or recommendation to buy or sell any asset. Keep in mind that investing involves risk, and past performance of an asset never guarantees future results or returns. It’s important for investors to consider their specific financial needs, goals, and risk profile before making an investment decision.
The information and analysis provided through hyperlinks to third party websites, while believed to be accurate, cannot be guaranteed by SoFi. These links are provided for informational purposes and should not be viewed as an endorsement. No brands or products mentioned are affiliated with SoFi, nor do they endorse or sponsor this content.
Communication of SoFi Wealth LLC an SEC Registered Investment Advisor
SoFi isn't recommending and is not affiliated with the brands or companies displayed. Brands displayed neither endorse or sponsor this article. Third party trademarks and service marks referenced are property of their respective owners.
SOSS24092001