In response to the shrinking supply of affordable starter homes and the ongoing affordable housing crisis, Habitat for Humanity gathered advocates in Washington, D.C., this week to urge Congress to act and prioritize policies that will increase the number of affordable homes, especially for entry-level homeownership.
While in D.C., Habitat CEO Jonathan Reckford spoke with BUILDER to expand on why the organization prioritizes annual visits to the nation’s capital and how this year feels slightly different.
In the interview, he also addresses Habitat’s new Homeownership Supply Accelerator, an innovative federal policy concept designed to rapidly increase construction and rehabilitation of affordable starter homes, among other policy proposals. Read on to learn more.
What’s Habitat for Humanity doing in D.C. this week?
We are here for our 19th annual Habitat on the Hill legislative conference. We have almost 500 donors, volunteers, and affiliate leaders from 44 states. It's a combination of training, and then we'll visit with over 300 members of Congress to talk about housing issues.
Talk to me about the advocacy program that just ended in 2024, Cost of Home.
Cost of Home was our first U.S. advocacy campaign. We believe that housing has to be a multi-sector approach. The public sector, private sector, and civil society all need to work together if we're going to solve something as complex as housing. But, government obviously plays a really important role at the local level, at the state level, and at the federal level for housing affordability. Cost of Home was all about affordability. Right now, the gap between what it costs to create a unit of housing and what families can afford is the widest it's been in modern history. We've got a real affordability crisis. This was really to bring awareness to that. It was a local campaign in over 400 communities across the U.S. One of the strengths for Habitat is we work in 1,000 communities. We are urban and rural, red and blue, and our view is that everybody needs to care about housing. This was about land use, about financing, about trying to find solutions and policy changes that would enable us to increase the supply of affordable housing.
What’s the new Homeownership Supply Accelerator? How does it differ from Cost of Home?
Cost of Home was an umbrella campaign for all kinds of issues around affordable housing. Each affiliate that was part of the campaign looked at what was needed in their community. And then within each state, we had a state strategy. It was an umbrella and then there was a federal component of it as well.
The Supply Accelerator, we feel, is a really important issue now at the federal level because one of the giant challenges is the supply of starter homes is shrinking and does not exist in many communities. Historically, if you look at the wealth gap in our country, until you get to quite wealthy people, most of it's explained by those who have the opportunity to purchase a home versus those who haven't. Those long-term kind of forced savings through homeownership are the best way for low- and moderate-income families to build a financial asset over time and intergenerational assets.
The idea behind the Supply Accelerator is if we give demand help and give subsidies, or first-time home buyer down payment assistance or things like that, which we're all for, but we don't increase the supply of homes, you're just bidding up the existing inventory. We've got to increase the supply of those starter homes. This would be specifically funding that and could go to nonprofit or for-profit developers, as long as they are building and selling homes to low- and moderate-income families.
How would this funding work in practice—would it be a grant program, revolving loan fund, or another financial structure?
I think the one difference is rather the funding going to the individual, in this case, the funding would be available for developers to help meet that gap. Because, as you probably hear from many builders, it's not an unwillingness to build the affordable end of the market. It's that no one can make the math work.
What are the key challenges in getting lawmakers on board with this initiative?
The biggest challenge now is that overall appropriations are going to be a huge challenge when you look at the interest on the debt being larger than the defense budget this next year. Then obviously, with entitlements continuing to grow, health care costs are accelerating way above inflation. That's going to put a squeeze on everything. So the challenge for us is to make sure housing is a priority.
Now, what we are hearing and that's different from past years, is that everywhere I've gone, in the U.S. and globally, housing is now at the top of the agenda, not just for mayors and local leaders, but for national leaders as well. I was just in Brussels last week for European Union (EU) meetings and housing is suddenly the No. 1 priority in the EU. That’s unprecedented. I expect in these meetings that we will have people leaning in on housing. And something I've said is that now that middle-class families children can't afford to live in the communities they grew up in, it's become a federal issue. Before it was a local issue and a somewhat invisible issue, because a lot of people were insulated from that, but now that it's gotten so extreme, I think members of Congress are hearing about it, and I'm hearing that from them.
Are there other organizations in D.C. with you that are helping you champion this?
We will certainly build a coalition of support around those federal issues, but Habitat on the Hill is just the Habitat extended family. We will certainly work broadly with other partners. This one's a little unique because there aren't a lot of players in the affordable homeownership space, and this is typically targeted at affordable homeownership, which is Habitat’s niche. We do advocate for support of the entire funding of every kind of affordable housing. We think we need more of the entire continuum of affordable housing, but from a production perspective, our particular niche is the building and preservation of affordable homeownership.
What’s at stake if the federal government fails to act on homeownership affordability now?
I think people have to understand that housing is inextricably linked to all the other things we want. If we don't address the housing issues, we continue to have one in six families paying over half their income on their rent or mortgage. We won't achieve our health goals. We won't achieve our education goals. We won't achieve our economic goals. It's really becoming an economic break in communities who can't hire workers or teachers or essential folks, because there's no housing. It's actually fundamental to all the other goals we have. Certainly, housing is not the only need, but in many ways, it's a foundation and prerequisite for everything else we want to work in our society.
What are the most urgent legislative priorities beyond the Accelerator that Habitat is advocating for on Capitol Hill this week?
We’re trying to support a couple of really important federal supports for housing. For HUD, we are supporting the HOME program, which is one of the biggest generators of new supply of housing. We are pushing to keep HOME at a minimum of $1.5 billion.
There's a small program called SHOP, the Self-Help Homeownership Opportunity Program, which is one of the rare programs that can actually help with land and infrastructure for affordable homeownership. It's a very small program, and we're hoping to keep it at no less than $20 million.
Another important one that's less visible is the Department of Agriculture has an important rural housing program under the U.S. section 502, direct loan program, and we're advocating to keep that at no less than $1.25 billion. That's been a critical financing vehicle for rural housing opportunities.
Then, on the tax side, and we certainly have many partners in this and bipartisan support, the Neighborhood Homes Investment Act, we think is a great opportunity for historically underserved areas. It’s essentially a homeownership version of LIHTC, low income housing tax credit. In parts of cities all around the country where you can buy a home still relatively affordable, but it's in terrible shape, and then by the time you put the money in to bring it up to code, it won't appraise for the combination of the purchase price plus the cost to bring it up to code. Those houses are sitting there. This would be a federal tax credit for covering that gap if you sell it to an income-qualified family. We think that could actually get hundreds of thousands of units on the market, preserve housing, and do it relatively quickly, because those houses exist. So, that would be a high priority on the tax side.
You've been with Habitat for nearly two decades—how does this moment compare to past efforts to expand affordable homeownership?
I think there’s lots of similarities, but the sense of urgency is probably the highest I've ever seen. The last five years have been a truly a perfect storm for housing affordability. As I mentioned earlier, the traditionally affordable markets suddenly are not affordable. It was always tough in New York City or California or Hawaii, where land was already incredibly expensive. But, what's shocking now is the sort of sweet spots for Habitat, the Southeast, the Midwest, where historically we could build lots of single-family homes that were mostly affordable with very small subsidy to a wide swath of families. That house in Charlotte, North Carolina, that used to be $125,000 is now $300,000 and that's the shocker. Incomes have gone up a little bit, but in no way fast enough to keep up with those cost accelerants. Florida, Georgia, North Carolina, Virginia, Tennessee, Texas, all those markets that historically were more affordable have shot up significantly, and then the moderate markets have gotten super expensive. I think the scale of the challenge has gotten much worse, and I think that's creating a real sense of urgency for us.
If you had the chance to speak directly to every lawmaker on the Hill this week, what’s the one thing you’d want them to take away from this visit?
One thing I would say is that when we think about what every family needs, after food and water and clothing, shelter really is the most fundamental need. Housing, as I said before, is critical to the future of every child. What we know is, if you have stable, affordable housing, children stay healthy, do well in school, have economic opportunities, and are able to grow into all that God intends for their lives. If you pull housing out of that, we don't achieve those other outcomes. And so, housing really is fundamental to both the economic and community health of our country.
