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President Biden says he wants to invest in 1 million affordable housing units

Posted at 5:33 PM, May 10, 2022
and last updated 2022-05-10 17:35:10-04

DETROIT (WXYZ) — Housing costs have many concerned about the American Dream.

“It is going to come to a phase where even people making $100,000 to $150,000 can’t afford it. So, what happens to the average American?” Charice Mitchell said.

Mitchell lives in the Boulevard Apartment Building that opened just before the pandemic at West Grand Boulevard and 3rd Avenue in Detroit. She lives in a market price apartment but says the community is improved by the fact that 20% of the units are below market price, with rent based in part on income.

This is possibly due to government funded affordable housing programs.

President Joe Biden says low housing supply is causing inflation. He proposed a plan to fight inflation on Tuesday. One part of it involved investing in one million additional affordable housing units.

A release from the White House said it would be done “through a set of tax credits that have received bipartisan support; expanding and improving federal financing for the construction of new housing; and using existing federal funding to reward communities that eliminate needless barriers that prevent new housing from being built.”

“The fewer units we have, the fewer supply we have. It pushes housing prices up for everyone and creates affordability concerns across the housing sector,” said Julie Schneider, director of the Detroit Housing and Revitalization Department.

Schneider says the city needs such investments. Due to inflation, some affordability housing projects have been delayed.

“There is nothing better or more satisfying than delivering a working class family a new home. And it has just become more challenging and challenging,” Rino Soave, the founder of Infinity Homes Founder, said.

Soave takes pride in using his company to provide homes working families can afford. He aims for price points that working families will find manageable. Houses currently being sold by Infinity Homes start close to $300,000 now.

His current developments are not in the subsidized affordable space. 7 Action News spoke to him about the challenges builders have making less expensive homes without government subsidies. Soave says inflation means the costs of labor and lumber have skyrocketed.

This has pushed many builders to focus on more expensive homes. The profits are big enough in the high-end space that additional costs can be absorbed. When you are building less expensive houses, an increase in lumber and labor can leave you losing money, unless you raise prices.

“Your $250,000 house 18 months ago is now in the $325,000 to $350,000 range,” he said.

He wants housing available at reasonable prices, but he is concerned about unintended impacts of government investments in more housing. He says supply of labor and lumber is currently not meeting demand, impacting his costs of building.

Mitchell says she feels living in a building with subsidized housing improves her neighborhood.

‘We need to do this now. We see people in other states becoming homeless because of how much housing costs, and Michigan is not somewhere you want to see people homeless, especially with our winters,” Mitchell said.