Neel Kashkari on Affordable Housing-Only the private sector, through increased housing supply, will be able to address the affordable housing crisis
Affordable housing is a big and growing issue in most parts of the country. Local, state and federal governments have continued to expand subsidy programs that help low income individuals offset some housing costs. This has been in contrary to research suggesting more effective measures should be geared towards increasing supply.
I do applaud the new direction the Fed is taking to possibly focus on the supply side. During the America’s Rental Housing Report Release, Neel Kashkari emphasized the need to incentivize the private sector to increase housing supply. Mr. Kashkari made the following points, among others, which I agree should drive housing policy;
- Affordable housing affects not only very low income individuals but also middle class workers.
- There is simply not enough money in any of local, state or federal government budgets to scale subsidy programs to all individuals who need help in affording a place to live.
- Only the private sector can move in and address the supply problem at a larger scale.
- If the private sector builds more units, even market rate units, it adds to the supply to a region, which ends up creating space for everybody.