Policymakers need to act to alleviate affordable housing crunch

The rate of vacant housing stock is as low as it has been in more than 30 years—a clear sign of a housing shortage for low- and middle-income households.

Moody’s Analytics economist Mark Zandi writes that policymakers must take “forceful action” to alleviate the shortage. Fannie Mae and Freddie Mac could reduce mortgage rates, he writes. “Because of the recent large cut in the corporate tax rate, Fannie and Freddie could charge a lower fee but still get the same return,” he adds.

The two mortgage juggernauts account for about half of all mortgage loans made today, mostly to households with modest means, Zandi points out. “Stiff zoning restrictions, higher permitting costs and other regulations are driving up building costs, particularly in urban areas where the shortage of affordable housing is especially acute,” he writes.

Part of the answer can come from state and local authorities. State housing authorities and Community Development Financial Institutions have the flexibility necessary to supercharge affordable home-building in places encumbered by a variety of complex and costly problems, Zandi writes. “They need lawmakers to empower them.”

New York City has two very large buildings dedicated to answering the 911 calls of its five boroughs. With more than 11 million emergency calls annually, it makes perfect sense. The second of these buildings, the Public Safety Answering Center II (PSAC II) is located on a nine-acre parcel of land in the Bronx. It’s an imposing 450,000 square-foot structure—a 240-foot-wide by 240-foot-tall cube. The gleaming aluminum cube risesthe equivalent of 24 stories from behind a grassy berm, projecting the unlikely impression that it might actually be floating. Like most visually striking structures, the building has drawn as much scorn as it has admiration.