When Indiana Sen. Todd Young visited Columbus recently to take part in a roundtable with local Realtors, he heard what he likely heard on stops around the state to promote his affordable housing legislation in Washington.
Realtors, like homebuyers, are having a tough time these days, and it’s anyone’s guess when that situation will change.
For every house that’s on the market now, there were four on the market back in 2014, according to data from the Indiana Association of Realtors. Because fewer homes are for sale, competition is fierce. This has kept prices high even as interest rates soared in recent years. Realtors told Young it’s not uncommon for a just-listed home to get multiple offers, often in cash. First-time buyers and those buying with an FHA or a VA loan that takes longer to process simply cannot compete.
Basic economic considerations are at play here. Homeowners with interest rates in the 3% range have every incentive to stay put, even if they could make a small fortune selling their home. They know after they sell they’d have to pay a lot for their next place, and they could easily wind up with an interest rate twice what they had been paying.
As a result, buyers and sellers alike in this market are in something of a no-win situation.
But there is also this economic reality: In lots of places where home values are depressed, there is no incentive for homes to be rehabbed or for new homes to be built. Builders and banks don’t see how they can recoup their investment, and so these areas continue to struggle. In some places, that’s been the story for decades.
Young has a potential remedy that could get more homes on the market and create new avenues for first-time buyers. Young is a co-author of the Neighborhood Homes Investment Act (NHIA), which aims to revitalize distressed neighborhoods by providing tax credits that states could use in targeted areas to build or renovate homes. Recipients would have to meet low- to moderate-income eligibility criteria.
Young’s office said the bill, if passed, could revitalize nearly 9,600 homes and create $2.4 billion in development revenue in Indiana in the next 10 years. Advocates say areas in Columbus, Franklin, North Vernon and Seymour are among those that could benefit if this bipartisan bill becomes law.
This proposal strikes us as sound policy Congress should have passed yesterday. The federal government has always played a role in housing — especially on the affordable side. But frankly, Washington has failed to respond to a dearth of affordable housing nationwide.
So we applaud Young for making these issues a priority. His Neighborhood Homes Investment Act is part of an affordable housing agenda he is advocating. Few things have more direct benefit for everyday Americans and their communities than expanding homeownership opportunities.
For most people, a home is their greatest investment as well as their key to building equity, wealth and stability. It simply makes sense for the government to do everything it can to make homeownership a reality for as many people as possible. Because it’s not just homeowners who benefit from that; our communities, state and country do too.
