The Housing for the 21st Century Act proposes significant changes to the home purchasing and building market. Learn about this bill, what it proposes to change, and its potential impact on landlords, property investors, and other housing providers.
As of this month, the Housing for the 21st Century Act, a bill aimed at tackling the nationwide housing shortage, has officially passed through the House of Representatives. This bill is intended to address the shortage of homes in the U.S., particularly affordable starter homes. The goal is to help more people own homes in the U.S., as the median age of first-time home buyers has recently risen to 40 years old, a record high.
It is believed that America is currently facing a housing shortage of about 5 million homes, according to the National Association of Realtors. As such, this act proposes to fulfill the needs of millions of people nationwide, seeking out housing that is within their budget.
As a housing provider, it is important to understand how this act may affect you, your business, and the market as a whole. Here are some of the proposed changes that this bill entails and what they mean for housing providers and renters.
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What is the Housing for the 21st Century Act?
The Housing for the 21st Century Act is a bill intended to alleviate the nationwide housing crisis. The primary goal is to make it easier, faster, and cheaper for builders to construct new homes, thereby lowering costs for buyers. There are several goals to this act, including increasing protections for veterans, renters, and assisted families to help them find and keep housing more easily. It also helps landlords finance and build houses to rent by making it easier and more affordable.
The bill does this by helping communities to address zoning laws and regulations that may make building houses more challenging and expensive. Additionally, it aims to streamline and modernize many processes that can cause costly construction delays. The bill also proposes improving coordination between homebuilding programs and updating government homebuilding loans to reflect the actual cost of construction in today’s market.
What does the Housing for the 21st Century Act mean for landlords, investors, and property managers?
This bill will create many changes for landlords and property investors, with numerous benefits and a small number of potential obstacles. It is slated to make housing more affordable, which means you, like any other prospective homeowner, can purchase property more easily. Investors and landlords are projected to be able to build housing more quickly and at a lower cost due to reforms in zoning and inspection laws. It will also mean that the limits to multifamily mortgages can be higher when loaning through the Federal Housing Administration.
However, this may also result in a shrinkage of prospective tenants for your rentals as more renters become homeowners if these changes become law. It may be helpful to prepare for a cooler rental market than in years past, but with such a large pool of current renters and the newest generation of renters entering the market, the impact may be negligible, depending on your area’s current market. These changes could spell advantages too, as new landlords begin their journeys and buy their first investment properties. If you are new to investing, more affordable houses can help you get a foot in the door. Additionally, with new investors entering the market, now may be an excellent time to grow as a property manager.
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What is coming next?
While this bill has not been made law yet as of the time of writing, its supporters are optimistic that it will be addressed in the near future. As such, it is wise to prepare for the potential change now. Additional modifications may be made to the bill before it becomes law, as with any proposed bill, but none have been implemented yet. Specifically, some parties want an addition prohibiting large-scale investors from purchasing single-family homes.
Whether or not these changes are made to the bill, savvy industry professionals know it is wise to keep an eye on these potential changes.
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Final Thoughts
This bill has the potential to make a lot of changes to the housing market. As a housing provider, whether you are a landlord, property manager, or investor, keep your eye on these changes and stay up to date with the progress of this bill. Watch your real estate news outlets closely to know when and how law changes might affect you.