Families living in urban, suburban, and rural communities across the country are struggling to find housing that they can afford. As of 2021, the United States had an estimated shortage of 3.89 million homes, and this unmet demand is contributing to rising housing prices. Without access to an affordable place to live, families are more likely to face housing and financial instability, with ripple effects across employment and educational opportunities. These consequences tend to be the most acute for under-resourced communities.
The housing supply and affordability crisis requires innovative solutions. In 2021, JPMorgan Chase committed $400 million in philanthropic capital over five years and shared data-driven policy recommendations to support housing affordability and access to homeownership. In 2023, we published an update on policies to advance affordable, sustainable homeownership. Supply has consistently emerged as one of the most pressing challenges facing the housing market, with public-private partnerships as the foundation to drive impact in communities across the U.S.
Building on the firm's policy, data, philanthropic and business expertise, the JPMorgan Chase PolicyCenter has identified three immediate steps that could meaningfully impact the housing supply and affordability crisis in 2024:
- Expand the Low Income Housing Tax Credit program. The Low Income Housing Tax Credit is the country’s most productive affordable housing financing tool. This federal program pairs local knowledge and development capacity with private capital to subsidize the costs of building affordable housing. Over 3.7 million affordable rental homes have been financed since the program was created in 1986, making it easier for families to live closer to schools, jobs, transit, and other services that improve household mobility and strengthen neighborhoods. Demand for the program outpaces the supply of credits, which limits how much housing can be developed. The Affordable Housing Credit Improvement Act – which has over 200 bipartisan co-sponsors in Congress – would expand the Low Income Housing Tax Credit program to produce an estimated two million additional affordable units over the next decade.
- Create a new Neighborhood Homes Tax Credit. Despite the Low Income Housing Tax Credit’s success in producing affordable rental housing, there has been no comparable federal homeownership program. The bipartisan Neighborhood Homes Investment Act (NHIA) would unlock affordable homeownership opportunities by filling a longstanding gap in housing markets: financing the acquisition and rehabilitation of single-family homes in economically distressed neighborhoods where the costs to update the home exceed a property’s sale value. If enacted, NHIA would add an estimated 500,000 starter homes in under-resourced communities.
- Build affordable housing practitioner capacity. Lawmakers can help better equip affordable housing practitioners by maximizing resources for proven and effective housing supply programs. For example, the Treasury Department’s Community Development Financial Institutions (CDFI) Fund manages the Capital Magnet Fund, which allows CDFIs and affordable housing developers to leverage additional private capital to finance affordable housing. The Capital Magnet Fund has generated $20 of additional investment for every $1 funded through the program, reflecting the strength of public-private financing models.
Public-private financing tools, like the Low Income Housing Tax Credit, can be effective solutions to addressing the country's housing supply shortage. These programs align public subsidies with private sector capital and community practitioner expertise. Now is the time for the federal government to advance solutions that work.
