Helping more families achieve dream of homeownership

Homeownership forms the core of the American dream. A home allows families to build equity, plant their roots and, most importantly, make lasting memories.

However, due to the bleak state of our economy, that dream is out of reach for too many families in rural Iowa.

As the Federal Reserve increases the cost of borrowing to cool the economy and combat record inflation spurred by wasteful government spending, interest rates have skyrocketed — eclipsing 7 percent — while housing inventory remains tight nationwide; a disastrous recipe for affordable housing across our country.

This cannot be the norm. Folks who have responsibly saved their money and made financial sacrifices should not be hindered by limited housing options, soaring housing prices and exorbitant mortgage rates.

For rural communities, in particular, we have to do more to lower home prices and attract young people to raise their families and start their careers in rural Iowa.

Fortunately, we have several policy levers at our disposal that we can activate to lower home prices, combat expensive mortgage rates, increase housing inventory and help more families unlock the front door to their dream home.

Serving on the House Ways and Means Committee, I recently helped introduce two pieces of legislation — the Neighborhood Homes Investment Act and the Affordable Housing Credit Improvement Act — that can help make homes more affordable for families who have been shut out of the market through no fault of their own.

Between labor shortages and record inflation to depressed inventory and budgetary restrictions, the cost of building a home has significantly increased, discouraging investors and developers from spearheading new projects, and in turn, expanding housing inventory. This is a serious problem that requires thoughtful solutions to ensure that families who want to buy a home — especially in rural communities — can do so.

The Neighborhood Homes Investment Act will mobilize private investment — through a new federal tax credit — to construct new, affordable homes and revitalize existing homes to attract and keep families and businesses in rural America.

By the numbers, this legislation would support the construction or rehabilitation of 500,000 homes for middle- and low-income families. In exchange, the Neighborhood Homes Coalition — a group of housing, lending and construction organizations — estimates that this bill would spur $125 billion in total construction activity, support 861,000 jobs in construction and adjacent industries, generate $56 billion in wages, and produce $26 billion in federal and $12 billion in state and local tax revenues.

We know that, since we want to keep our families and businesses in rural Iowa, we need to incentivize the construction of new homes and the rehabilitation of older structures.

I’m confident that this legislative solution will promote population growth in rural communities, generate economic development and support our thriving main streets.

In the same vein, the Affordable Housing Credit Improvement Act also seeks to achieve the same goal of making housing more affordable for our families but specifically for renters. This legislation would support the construction of 2 million new affordable homes for rental purposes through the expansion of the low-income housing tax credit, which has a proven track record of success.

More specifically, this bill would double the amount of credits allocated to each state to support affordable rental housing construction and energize private capital to accompany the tax credit.

Since its creation, over 8 million households have benefited from this tax credit, allowing more people to rent a home without breaking the bank. By strengthening the low-income housing tax credit, this legislation would also create 5.5 million jobs and spur more than $617 billion in wages. Again, through simple tax-code adjustments, the return on investment for our families, workers and communities is enormous.

The facts are clear. Too many families have forgone buying a home or renting a more spacious property because poor economic conditions and rising interest rates have forced their hand and closed the door.

Born and raised in rural Iowa, I am encouraged that these two pieces of common-sense legislation will lower the cost of new homes for Iowa families, incentivize new home construction, lower housing costs, support neighborhood revitalization and make the dream of homeownership attainable and affordable for our families in rural America.

In Congress, I will continue to champion solutions to the challenges facing our families, rural communities and our nation. The status quo cannot be accepted.

This op-ed was originally published in the Northwest Iowa Review on August 1, 2023.