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How to Increase Housing Flexibility for Low-Income Americans

Summary:
Skyrocketing real estate prices are creating a housing affordability crisis for middle and lower-income Americans. Through a targeted grant program and expanding access to Section 8, federal policymakers can help. Why it matters: In many major cities, high housing costs caused by local restrictions prevent American workers from pursuing better job opportunities. With nearly half of renters paying more than 30% of their income on housing, these restrictions burden household budgets, reduce workers’ wages, and limit income mobility. Driving the news: Home prices in the US are up 24%, a record high, while inventory is down 37%, a record low. As many people leave major metropolitan areas for smaller cities and look to buy homes, first-time homebuyers and middle and lower-income families find

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Skyrocketing real estate prices are creating a housing affordability crisis for middle and lower-income Americans. Through a targeted grant program and expanding access to Section 8, federal policymakers can help.

Why it matters: In many major cities, high housing costs caused by local restrictions prevent American workers from pursuing better job opportunities. With nearly half of renters paying more than 30% of their income on housing, these restrictions burden household budgets, reduce workers’ wages, and limit income mobility.

Driving the news: Home prices in the US are up 24%, a record high, while inventory is down 37%, a record low. As many people leave major metropolitan areas for smaller cities and look to buy homes, first-time homebuyers and middle and lower-income families find themselves priced out.

Details: Local zoning restrictions—such as single-family zoning, minimum lot-size requirements and long, costly approval processes—limit new housing construction in US cities, driving up the cost for housing. 

Federal policymakers have an opportunity to provide leadership on housing policy reforms by encouraging localities to adopt policies to open up cities to more housing at more affordable prices with two key policies: 

  • Incentivizing localities to reform land use regulations through grants.
  • Expanding access to Section 8 vouchers to all households that qualify based on their income and experimenting with cash transfers in lieu of the current voucher system 

Go Deeper: Learn more about solutions to the housing affordability crisis with the Fixing America’s Housing Problem guide.

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