A struggling housing market. A contentious battle for the White House. An American electorate hungry for solutions.
In 2008, as I prepared to enter the Obama administration as housing secretary, we faced a foreclosure crisis that had turned into a world economic crisis. Our job was to make sure people could stay in their homes but also to ensure that the contagion of foreclosure and neighborhood decline didn’t spread to every part of the country. It was an emergency, and one that required immediate, bipartisan efforts to stabilize not just families and communities but our housing market and the financial system more broadly.
Today, we face a different kind of crisis, but one that is equally consequential: a profound lack of affordable housing—both for renters and owners—that threatens to destabilize our economy and the future of millions of families. Like the foreclosure crisis 16 years ago, it is bringing together unlikely political allies, realigning politics and our political conversation in a way that has the potential to break through and bring lasting reform.
Even with the Fed’s long-awaited rate cut, the costs to buy and maintain a home are among the highest in decades. According to Fannie Mae, 83% of Americans say it’s a bad time to buy. The market suffers from perilously low housing inventory, a trend that started after the Great Recession and continues today.
The picture is even more dire for renters, more than half of whom are now cost-burdened. Every year, the average cost-burdened household spends $8,000 more on housing than they can afford, which is nearly the cost of a year’s supply of gas and groceries combined. That, in turn, is putting a drag on our broader economy—even with inflation cooling, housing costs are the driving force for more than 70% of core inflationary gains over the last year.
Most startlingly, thousands of Americans who are working full time, with good jobs and decent paychecks, are finding themselves homeless. In a scenario that should be unfathomable in the world’s wealthiest nation, people with full-time work are doubling up with relatives, checking into motels, spending a few nights in their cars, sleeping in shelters, or landing on the streets.
Unlike the foreclosure crisis, the broader challenges of affordability have been present for decades, at least in traditionally high-cost parts of the country like New York City and San Francisco. The difference today is that the crisis, accelerated by changes from the COVID pandemic, is both broad and deep, seeping into markets once seen as affordable. For the majority of people, from Bakersfield, California, to Buffalo, New York, rural communities to Tribal areas, housing is too expensive, and there just isn’t enough of it.
As my boss, President Obama, used to say (riffing on Churchill): A crisis is a terrible thing. It’s also a terrible thing to waste.
Like the foreclosure crisis, the affordability crisis has forged a new political consensus: If you don’t have a housing plan, don’t expect voters to flock your way. Responding to that pressure, more than 30 governors raised the issue in their State of the State addresses this year. Vice President Harris and former President Trump have put forward proposals to convince voters that they can bring down housing costs in the near term, mentioning housing five times during the ABC News debate.
Cynics will roll their eyes at such promises. Indeed, it’s true that in the United States we don’t have just one housing system—we have thousands, with varying rules, laws, and incentives at the local, state, county, and regional levels. I have worked in housing for three decades and know how complex change can be.
But this growing national consensus is generating real, rapid change at the local and state level in particular. Communities from Florida to New Mexico to Minnesota are reevaluating zoning and land-use restrictions that have historically stifled the growth of affordable housing and contributed to the racial wealth gap. Governors are working with their federal counterparts to propose new tax credits and incentives to get more people into homes they can afford. A new configuration of faith groups, housing advocates, business leaders, and voters are looking beyond partisanship and forcing action.
Even at the federal level, we saw Republicans and Democrats team up earlier this year to support an expansion of the low-income housing tax credit. For four decades, the housing credit has been responsible for financing nearly all affordable housing development in the United States, producing or preserving some 4 million affordable homes, generating over $250 billion in tax revenue, and supporting jobs and local economies in nearly every community in the country. With tax reform looming in 2025, it’s a road map for how to get communities the investments they need to build and preserve affordable homes.
Political consensus is nearly impossible to come by. That’s more true now than it was when I was in the White House. But like 16 years ago, the nation is focused on our housing challenges like no other time in our history. That’s pulling housing out of the gravitational pull of political bickering. As with so many political moments, this one may be fleeting. As a nation, we can’t afford to waste this crisis.
