Housing Policy Initiative

High housing costs continue to be a major concern among Americans, and in the coming months, state lawmakers can build on bipartisan approaches taken last year to ease the nation’s housing shortage, a key driver of soaring rents and home prices.

The United States has a shortage of 4 million to 7 million homes and, at the same time, an all-time-high office vacancy rate of 20%, meaning that more than a billion square feet of office space is unused. But despite the urgent need for housing—and many local policymakers’ desire to convert underused office space to apartments to help revitalize downtowns that lost residents and businesses during the pandemic—construction costs remain too high to make most such conversions profitable, even with today’s high market rents in many U.S. cities and towns.

Manufactured housing—the modern version of a mobile home—is an important, but underused, form of low-cost housing. Today, about 18 million people live in these homes, and most own rather than rent. When borrowing to buy a manufactured home, buyers usually use financing from traditional lenders such as banks or credit unions in the form of mortgages, which finance the house and land together, or home-only loans—also known as chattel or personal property loans—which finance only the house and not the land beneath.

Americans living in rural areas often struggle to get a mortgage, which limits their ability to attain homeownership. One key reason is the limited availability of small mortgages, those under $150,000, which hits particularly hard in rural communities. But potential buyers in these areas also face several distinct barriers to financing that prevent them from using mortgages at the same rates as their urban counterparts.