Biden's $100M Initiative to Tackle Housing Shortage

The White House has announced a $100 million initiative aimed at increasing housing supply by offering grants to state and local governments.

Jordan B. & Han-Gwon Lung
August 14, 2024

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Good morning. The Biden administration launched a $100M initiative to boost housing construction and address the national housing shortage.

Today’s issue is brought to you by PACE Loan Group—a national lender offering owners non-recourse, long-term, fixed-rate C-PACE financing.

🎙️ No Cap Podcast: Tune in Sunday for Episode 5 as we sit down with Michael Mandel, former broker, and CompStak founder, about the impact of data and AI on commercial real estate.

Market Snapshot

S&P 500

GSPC

5,319.31

Pct Chg:
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FTSE NAREIT

FNER

784.27

Pct Chg:
+0.95%

10Y Treasury

TNX

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SOFR

1-month

5.35%

Pct Chg:
0.0%

*Data as of 8/8/2024 market close.

HOUSING BOOST

Biden's $100M Initiative to Tackle Housing Shortage

The White House has announced a $100 million initiative aimed at increasing housing supply by offering grants to state and local governments.

What happened: While the U.S. has seen a surge in multifamily housing, driven by the pandemic-era construction boom, single-family home production remains weak, reaching a four-year low in June. With housing construction overall on a decline since December, the Biden administration is looking to counterbalance these trends through regulatory reforms and expanded financing options.

Key initiatives: The grants will support local governments in removing regulatory barriers, with a focus on long-term capacity building for housing supply. For instance, a $5 million grant was awarded to Bend, Oregon, to develop a five-year plan for addressing housing and infrastructure needs. The demand for such funding is high, with $13 in requests for every dollar available.

Agency moves: The Department of Transportation will now exempt certain projects from lengthy environmental reviews, potentially halving construction time. HUD and the Treasury are expanding a public-private initiative that's already built over 100,000 affordable units since 2021.

➥ THE TAKEAWAY

All eyes watching: With single-family home production lagging and congressional action on housing tax credits stalled, the Biden administration is intensifying its efforts through grants, regulatory reforms, and expanded financing to keep housing construction on track and address the nation’s housing needs.

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See how C-PACE could benefit your project today.

✍️ Editor’s Picks

Aging opportunities: At 93, Larry Silverstein eyes Midtown Manhattan's aging office buildings amid falling property values, seeking opportunities for office-to-resi conversions.
REITs on the rise: In Q2, U.S. REITs raised $16.6B in aggregate—$12.5B in secondary debt and $4.1B in equity—benefiting from improved capital markets.
Railyard saga continues: Watermark Capital Group faces foreclosure on a $45.3M loan for a failed 28-story, 497-unit project, its third failed attempt at the former railyard.
Trump's towering vision: The Trump Organization plans to add 1.5K luxury condos and 142 KSF of commercial space at Trump National Doral Miami.
Real estate revival: Real estate stocks are rebounding, with commercial property possibly near its bottom. Public REITs are up 10–15%, while private markets are down 20%.

🏘️ MULTIFAMILY

Texas tightens: Housing affordability is slowly but surely decreasing in Texas, as a nonprofit secures an $18.6M loan for a 204-unit affordable property in Fort Worth.
Rental trends: Some South Florida areas are seeing undeniable rent drops, with 13 of 25 municipalities down, while Sunny Isles Beach leads the slump at -10.2%.
Multifamily mayhem: A fraudulent $74M Fannie Mae (FNMA) loan led to an $18M loss for JLL (JLL), with 3 investors pleading guilty to wire fraud conspiracy.
Balancing act: Tampa's multifamily vacancy rate exceeded 10% in 3Q24 for the first time since 2001, reflecting a concerning supply-demand imbalance.

🏭 Industrial

Industrial resilience: The US industrial real estate market is stabilizing with a 6.1% vacancy rate, as newer tech facilities remain in high demand and major metros see rising supply.
Building boom: Jacksonville issues a permit for a 547 KSF speculative warehouse at Imeson Park South, a $1M project that’s part of a larger multi-building plan for the site.
Data center deal: Thor Equities Group purchased a 270-acre manufacturing plant in Atlanta and plans to convert it into a data center.

🏬 RETAIL

Suburb optimism: New York developer Ben Ashkenazy loses his Magnificent Mile property due to default, but remains bullish on Chicago suburbs despite the struggling retail market.
Urban rebirth: Santa Ana is considering replacing a shopping center with an urban village that would include 3.75K apartments, 350 KSF of retail, a 250-room hotel, and 13 acres of green space.
Bargain to riches: CRC has sold Centre at Hagerstown, MD, for $36.3M, doubling its initial purchase price, with an exit value of $52.4M.
Foreclosure frenzy: Blackstone (BX) and Rialto Capital are foreclosing on RFR’s retail properties, defaulting on $22.4M loans for locations across NYC.

🏢 OFFICE

Studio struggles: Hudson Pacific Properties reported a $47M loss in Q2 with gradual office leasing growth, as studio operations remain uncertain.

🏨 HOSPITALITY

Visiting California: In 1H24, California hotel deals dropped 50% to $1.2B, while individual deals only slipped by 1.6%.

📈 CHART OF THE DAY

The U.S. industrial sector slowed down in 1H24, with construction starts falling and top markets expecting decreased new supply despite a strong long-term outlook. Only 209 MSF was delivered in the six-month period, down from 262.3 MSF in 2023.

According to CommercialEdge, the top five metros for industrial deliveries were Dallas (20.63 MSF across 65 projects), Inland Empire (18.74 MSF, 52 projects), Phoenix (17.9 MSF, 91 projects), Chicago (8.8 MSF, 22 projects), and Austin (8.1 MSF, 62 projects).