June is National Homeownership Month, which was created with the goal of helping more families achieve the American dream of homeownership. And while buying is not for everyone, housing and homeownership still greatly matter.
Homeownership not only provides a place to raise families, it also offers stability and helps create strong communities. Homeownership is also essential to wealth-building. For most Americans, their homes remain their largest asset. In fact, home equity accounts for more than $13 trillion in wealth for Americans.
At the same time, millions of Americans pursuing homeownership represent a major driver of the U.S. economy. Housing-related spending makes up more than 15 percent of our national gross domestic product. We know that locally, every new home creates more than three full-time jobs and increases the tax base that supports schools, parks and other community activities. Housing also means more jobs and resources in our communities.
For these reasons, policymakers must act to ensure homeownership remains a priority. Several key actions can be taken at all levels of government to promote homeownership and make housing more attainable.
First, as Congress debates tax reform in the coming months, it is critical that we protect the mortgage interest deduction. We must make sure it remains a meaningful tool to promote homeownership among middle-class Americans and not something that only helps buyers of more expensive homes. As various tax reform ideas are discussed in Congress, lawmakers should maintain the mortgage interest deduction as a viable incentive for all families considering buying a home.
Another way to promote homeownership is by enacting comprehensive housing finance reform. This is needed to ensure that housing credit is available and affordable in the future and is delivered through a sound, stable system. Congress should look for ways to bring the flow of private capital back into the marketplace with a limited federal government backstop to the U.S. housing finance system in times of crisis. This approach is key to maintaining the availability of the affordable 30-year fixed-rate mortgage, a staple of our nation’s housing finance system.
Here in Washington state, solutions are needed to address condominium liability issues that are making it hard to provide this affordable, entry-level housing. The current regulatory environment for condominium construction in Washington state is very challenging, and liability risks are making it prohibitively expensive to bring this housing product to market at an affordable price point.
Our state needs to find ways to address these issues and encourage more condominium development, particularly for middle-income families. The process of buying and financing condos already comes with its own set of challenges due to requirements from Fannie Mae, Freddie Mac, the Federal Housing Administration and the Department of Veterans Affairs, which collectively back most condominium mortgages. Anything that can be done at the state level to remove hurdles preventing condo development, or at the federal level to simplify the process of buying and financing these projects, would go a long way toward making homeownership more attainable in our region.
State policymakers also need to take a fresh look at Washington’s Growth Management Act to make sure it can meet its promise to provide a variety of housing types and encourage the availability of affordable housing for all economic segments of the population. To accomplish this, the state must provide local governments with adequate resources to do the necessary planning for growth.
We also need to make sure cities and counties have more accurate information to better understand how much buildable land supply remains in fast-growing regions like the Puget Sound. This is a critical step to help planners know how best to accommodate growth. Having more accurate data in our buildable lands reports will help cities and counties use our existing land supply as efficiently as possible by making certain we achieve true urban density in those areas designated for growth.
Homeownership and access to affordable housing must be a local priority, as well. Cities and counties must keep in mind the cumulative effect of their actions on the cost and supply of housing. Things that drive up housing costs—such as higher impact fees, lengthy permit timelines or overly burdensome development regulations—place homeownership out of reach for many families and individuals. Local governments need to carefully review the effects of regulations on housing supply and costs and determine whether there are other ways to meet their intended purpose without placing added cost pressures on housing.
To those who question whether homeownership is still a worthy goal, we clearly believe it is. As policymakers debate these and other housing-related measures, they must ensure that homeownership remains attainable and that access to safe, decent and affordable housing continues to be a priority.
Shannon Affholter is the executive director of the Master Builders Association of King and Snohomish Counties. Gail Luxenberg is CEO of Habitat for Humanity Seattle-King County.