The U.S. housing shortage has been a problem in the making for years now, and experts have been sounding the alarm more than ever. While this shortage is a systemic issue that a singular homeowner cannot tackle on their own, there are some solutions that can make it easier to address how the problem impacts them.
Let’s explore some affordable housing shortage solutions that home buyers may find helpful.
What Caused the Affordable Housing Shortage?
There are multiple causes that led us down the path of an affordable housing shortage. However, as with other large-scale problems, the COVID-19 pandemic exacerbated most of them, directly leading to an increase in homelessness, mortgage and rent stress, and a migration away from larger urban centers with higher costs of living.
Here is a brief rundown of the issues that have pushed the housing shortage into 2023.
The 2008 Housing Bubble Collapse
Yes, the issue goes back over 10 years, to the subprime mortgage crisis and the bursting of the housing bubble in 2008, according to NPR. After the collapse and the global recession that accompanied it, home builders stagnated as the demand fell, and the average home value fell across the country.
Although the Great Recession ended a few years after the official housing collapse, many firms have been slow to start building again, leading to a lower inventory of new homes for buyers that has lasted to this day.
Pauses and Shutdowns from COVID-19
The COVID-19 pandemic itself also played a role in the current housing crisis. During the earliest days of the pandemic and local surges in infection rates, many home-building projects were forced to pause or shut down altogether due in part to state and local regulations.
Regardless of whether a given state shut down or not, practically every builder, home buyer, and supplier experienced delays relating to the ripple of supply chain issues that continued both on a national and global scale. Things are only now starting to get back to normal.
Low Supply Means a Housing Inventory Shortage
In addition to both of the above issues, there has also been a problem that will be familiar to anyone who has ever taken an economics class—supply and demand.
Because there are fewer homes for sale and more people wanting to ditch renting in favor of equity, affordable houses are harder to find than ever before. It’s important to note that there are other contributing factors, including but not limited to:
- Location: The severity of the affordable housing shortage varies by state. For example, home prices surged in the Front Range Urban Corridor in Colorado as people moved there in the mid-2010s. Boise, Las Vegas, and other metropolitan areas have also seen a similar trend recently as Californians leave for greener, less expensive pastures.
- Zoning laws: Regulations in many cities and towns make it difficult to rezone land for residential use once the lot is designated for commercial use.
- Labor: Some construction workers left the industry during COVID-related shutdowns and elected to move into a different field altogether to make ends meet, leading to a labor shortage at home building firms.
What Future Homeowners Can Do About the Affordable Housing Shortage
While the issues leading us to this point are systemic in nature, there are solutions for the housing shortage that future homeowners can leverage.
Use Home Building Voucher Programs for the Housing Shortage
Federal and state governments typically want to make it easier for families and individuals to buy a home. Here are a few unique situations that might be applicable:
FHA and HCV Loans
The U.S. Department of Housing and Urban Development and local agencies in cities across the country offer Housing Choice Voucher (HCV) homeownership programs. These are designed to help families purchase a home and facilitate closing costs, among other expenses.
Additionally, depending on your situation, the Federal Housing Administration (FHA) is also able to help home buyers seeking to build. FHA loans are a popular choice for first-time buyers, and they’re ideal for purchasing modular homes, since these homes meet FHA inspection standards by design.
Loans for Veterans
Veterans or active members of any branch of the U.S. Armed Forces may be eligible for loans from the Department of Veterans Affairs (VA). Your ability to qualify may vary depending on the amount of time you served, when you served, and in some cases your rank.
Other rules apply as well. For example, while modular homes are eligible for a VA loan, mobile homes are not. Veterans who are interested in applying should review the VA’s website for full details.
Tax Credits and Homeownership Programs
In addition to FHA and HCV loans and vouchers, tax credits are also available in a variety of different situations. Many states offer credits or deductions for property taxes, both for couples who are filing jointly and for those filing on their own. There are also options for mortgages with high interest rates, and a number of different home improvement credits.
There are also special HUD programs for members of indigenous tribal groups who are seeking to buy or build their own homes. Those seeking to apply under these programs should inquire with their regional Office of Native American Programs (ONAP) branch.
Fulfill Your Civic Duty with Rezoning
As mentioned previously, one of the problems playing into the affordable housing shortage is restrictive zoning laws.
Prospective homeowners should familiarize themselves with local zoning laws. If the rules don’t allow for easy development or reversal of commercial lands that aren’t being used, or have been sitting empty for years, it may be time to make some noise.
Get in front of your city council. Submit zoning requests. Argue that more land needs to be zoned for residences or mixed use if they want to make housing more affordable. Even more, get organized with your friends and neighbors—because this could impact them, too.
If your city council is willing to listen to zoning requests and public feedback, then you could be well on your way to having the option of owning your own lot within the city. However, if they’re not, then it might also be time to look at electing new city council members—after all, they work for you.
Invest in a Modular or Manufactured Home
Modular and manufactured homes are often more affordable than traditional site-built homes, making them an attractive option for home buyers. They also allow you to build the exact home you want, without spending hundreds of thousands of dollars on a design-build.
However, there are differences between modular and manufactured homes that you should know.
Modular homes are partially constructed by a manufacturer before the builders place the constructed pieces on a permanent foundation. They also look nearly identical to a stick-built home, while being far more affordable to buy new and easier to customize exactly how you like it.
In many cases, modular homes are an ideal choice because it can be easier to purchase or rent a lot for your house and buy the home separately, rather than buy property with an established house. Modular houses are also relatively low-maintenance, especially compared to older homes that have experienced wear and tear over the years.
Unlike modular homes, manufactured homes are not necessarily placed on a permanent foundation when they’re constructed.
While manufactured homes have the benefit of mobility, the home typically isn’t considered real property until it’s permanently affixed to the site. However, Preferred Homes also offers both single wide and double wide homes that you can place wherever you need to, meaning there is some level of customizability for buyers.
There are some financing limitations with manufactured homes—many are not eligible for VA and other federal loans, whereas modular homes typically have no limitations.
Schedule a Tour with Preferred Homes
There are multiple housing shortage solutions for homeowners to explore on an individual basis, up to and including investing in a modular or manufactured home. Schedule a tour with us today to learn how we can help you find the affordable, accessible home of your dreams.
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