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Americans are facing a historic housing affordability crisis<\/a> that\u2019s left millennials feeling \u201cdisenfranchised<\/a>\u201d\u2014and hindered Gen Z\u2019s attempts to leave the nest<\/a>. With sky-high home prices and burdensome mortgage rates weighing on buyers, the housing market is locked in a deep freeze<\/a>. Meanwhile, rents have surged roughly 30% since the pandemic, forcing a record number<\/a> of renters into unaffordable housing.<\/p>\n The Biden administration has introduced a number of measures meant to address these issues, including tax credits<\/a>, down-payment assistance<\/a>, and reduced closing costs<\/a>. But a top Biden official admits the housing crisis can\u2019t be controlled without a shift that many<\/a> in the real-estate industry have been calling for: building more. A lot more.\u00a0<\/p>\n \u201cIn order to be able to afford to buy homes, we need more homes in general,\u201d Adewale Adeyemo, deputy secretary of the Treasury, told Fortune<\/em> in an interview after President Biden\u2019s State of the Union Address.<\/p>\n \u201cWe have a supply challenge in the economy,\u201d Adeyemo explained. \u201cSince the financial crisis, we\u2019ve built too little housing here in the United States.\u201d\u00a0<\/p>\n Indeed, the U.S. needs between 2 million and 7 million homes to make up for its current supply gap, according to calculations from Realtor.com<\/a>. Despite the U.S. starting construction on about 1.5 million new homes in each of the last three years, the nation\u2019s housing supply remains far behind where it needs to be.<\/p>\n In his State of the Union Address on Thursday, Biden highlighted his moves to address the housing crisis, noting he had \u201ccut red tape\u201d to boost federal financing for housing projects and put forward a number of other measures to control housing costs.\u00a0<\/p>\n This week, Biden proposed a tax credit that would give first-time homebuyers and sellers roughly $400 a month over the next two years to help with high mortgage costs. The new plan would eliminate title insurance fees for federally backed mortgages as well. \u201cWhen you refinance your home, this can save you $1,000 or more,\u201d Biden said.<\/p>\n Still, a savings of $1,000 is small potatoes against the backdrop of home prices that have surged roughly 40% since before the pandemic; for the average American, that would cover roughly two weeks\u2019 worth of rent, according to Zillow\u2019s latest figures<\/a>.<\/p>\n So despite Biden\u2019s mostly demand-related proposals, Adeyemo pointed to the President\u2019s call on Thursday to build and renovate 2 million homes as evidence that he understands \u201cthe only way to deal with the supply challenge is to build more supply.\u201d<\/p>\n Biden proposed building on his 2022 Housing Supply Action Plan<\/a> before the State of the Union Address on Thursday with tax credits for home builders that construct affordable housing; a new $20 billion \u201cinnovation fund\u201d for the construction of multi-family units, starter homes, and to \u201cincentivize\u201d the removal of barriers to construction; and doubling the Federal Home Loan Bank\u2019s annual contribution to the Affordable Housing Program. And for renters, Biden pledged to crack down on rental \u201cjunk\u201d fees and \u201cfight rent gouging\u201d by corporate landlords.\u00a0<\/p>\n \u201cThe President\u2019s fighting to do everything he can to lower costs using the authorities Congress has already given us,\u201d Adeyemo said of the actions. \u201cAnd we\u2019re going to call for Congress to give more resources to allow us to build more housing supply.\u201d<\/p>\n<\/div>\n\nSubscribe to the CFO Daily newsletter to keep up with the trends, issues, and executives shaping corporate finance. Sign up<\/a> for free.<\/div>\n