Jackson Morrill
President & CEO of the American Wood Council
The National Low Income Housing Coalition estimates that there is a shortage of almost 7 million affordable rental homes available across the nation. In fact, the Coalition found that nowhere in the U.S. can a renter working a full-time, minimum-wage job afford a two-bedroom apartment.
The National Association of Home Builders reports that 70 percent of households cannot afford a $400,000 home, which is still $60,000 less than the median home price. This crisis has far reaching effects on our communities, job opportunities and local economies.
Housing is more than just a physical space. It has long lasting implications for health, economic and social stability in all communities, but especially in low-income communities where affordable housing is lacking. When houses are not being built, rural communities suffer, manufacturing slows and local economies waver.
The U.S. wood products industry is uniquely situated to help meet the needs of our nation’s housing. Most single-family homes are built with wood, and a growing number of developers are turning to innovative wood products like mass timber for workforce and affordable housing projects.
The U.S. wood products industry directly employs almost 465,000 people with an additional 790,000 employed in indirect (industry suppliers, e.g. equipment manufacturers) and induced (where employees spend their salaries in the wider economy, creating jobs) positions adjacent to the industry. In total, this equates to almost $90 billion in compensation across the greater industry – compensation that provides family wage jobs and supports the growth of our nation’s manufacturing communities.
Additionally, our industry directly provides over $2.2 billion in state and local tax revenue that supports the growth of local communities across the nation. With a gross domestic product (GDP) contribution of $61 billion, our industry’s economic impact is a central stabilizing point for rural communities, and slow housing starts have compounding effects not only on our mills and mill workers, but also on the broader local and national economies.
While our industry is ready to meet the demands of the market, policies that incentivize housing starts are vital to overcome the economic inertia that has stymied housing construction and posed significant affordability concerns.
The Neighborhood Homes Investment Act (NHIA), recently introduced in Congress, aims to alleviate some of the financial burdens and uncertainties for construction and rehabilitation projects. The NHIA creates a business tax credit that helps reduce the developers’ risk of loss in the acquisition, rehabilitation or remediation of qualified real estate. It encourages increased development of single-family homes with estimates suggesting the Act would lead to half a million new starter homes nationwide.
Similarly, the proposed Affordable Housing Credit Improvement Act (AHCIA) seeks to use tax credits to incentivize housing starts by increasing the per capita dollar amount of credit and increasing the number of credits available to state housing authorities.
The U.S. wood products industry is ready and more than capable of supplying the quality products needed to build our next generation of homes and apartments, but we need policies in place that lead to more affordable housing availability. Simply waiting for interest rates to come down is not a formula for success; it is going to take creative approaches like those in the NHIA and the AHCIA to move the needle. We need a collective effort with all housing interests at the table, and AWC is proud to be a part of that discussion and support the NHIA and AHCIA as an important step in finally addressing our nation’s housing crisis.
