Co-authored by Kiley Yuthas, Graduate Intern at National League of Cities
America’s Housing Comeback, a partnership between National League of Cities (NLC), American Planning Association (APA), the National Association of Home Builders (NAHB) and the National Association of REALTORS (NAR)®, builds federal-local and public-private partnerships to support local governments’ ongoing housing supply efforts.
An initiative of the Housing Supply Accelerator, America’s Housing Comeback aims to accelerate the housing supply successes of local governments using the solutions, systems and partnerships approach outlined in the Housing Supply Accelerator Playbook.
On November 12, 2025, NLC, APA, NAHB, and NAR convened the America’s Housing Comeback Advisory Group in Houston, Texas, at NAR NXT to discuss the current landscape of housing finance and opportunities to bridge financing gaps in housing development to accelerate, preserve and improve housing availability.
Key Takeaways from the America’s Housing Comeback Advisory Group
Economic Outlook for Homebuyers
The current economic conditions and data on homeownership presented by Dr. Jessica Lautz of the NAR (PDF) highlighted the affordability challenges faced by millions of Americans. Homeownership is progressively out of reach for many households in the US. Home prices are at a record high, and sales of homes are at a low not seen since 1995. Key takeaways from Dr. Lautz’s presentation included:
- Housing inventory is increasing but is just starting to recover to pre-pandemic levels. Dr. Lautz estimated that up to 5 million additional homes are needed to meet current demand. A growing share of production is built for rent, likely in response to a shrinking share of first-time home buyers.
- Buyers are facing barriers to market entry. The average first-time home buyer is entering the housing market later in life—usually around 40 years old. Housing supply is not keeping pace with job growth in many communities, and the qualifying income to purchase a home is also increasing, with a six-figure household income now required to buy an average median-priced home with a 20% down payment. The median length of home tenure is rising, with many homeowners becoming “accidental landlords” who hold onto properties to benefit from low interest rates.
- The gap between homeowners and renters is increasing. The typical homeowner has an estimated $430,000 in housing wealth, compared to the typical renter who has only $10,000. The share of first-time homebuyers in the market has decreased by 50% since 1981, putting more pressure on the rental market. High rent, debt, and childcare costs are reported as significant factors among those who cannot afford a down payment on a home.
Systemic Barriers to Housing Production
The conversations during the convening highlighted systemic and cyclical barriers that municipalities must address to expand and preserve housing supply. These barriers include building political will at the community level, addressing challenges associated with infill development, navigating regulatory constraints beyond zoning, and maintaining local autonomy in housing decision-making.
- Not In My Back Yard (NIMBY) – Many municipalities face pushback from residents, particularly homeowners, who do not support changes that they see as having the potential to alter the character of their neighborhood or lower their property value, although almost no evidence supports this. While they may support housing production, a “not in my backyard” attitude can lead to strong opposition against attempts to build housing.
- Urban infill development challenges – Obstacles to small, infill development persist. Urban infill projects face more burdensome regulations, longer approval processes and higher fees than suburban development. Ongoing labor challenges and the high cost of building materials add to this challenge. To make infill financially viable, municipalities often need to contribute to the project in ways that include streamlining permitting processes and revising fee structures to lower the overall project cost.
- Beyond zoning code – While zoning modernization is an important step to increase housing supply, other local priorities work at cross purposes with housing supply and attainability goals. For example, projects can get waylaid due to traffic impact analyses, infrastructure requirements, and fees that require developers to absorb the cost of infrastructure improvements beyond what’s necessary for the project itself.
- Flexibility for locally driven housing solutions– Housing challenges do not have a one-size-fits-all solution. Utilizing local authority to maximize outcomes and maintaining flexibility to address unforeseen circumstances is essential for the successful implementation of comprehensive housing development planning tailored to the unique local context. Statewide laws limiting local authority can reduce the options and flexibility available to municipalities, making it more challenging for them to keep projects on track when unforeseen obstacles arise.
Innovative Financing and Public-Private Partnerships
Despite broader economic, local and regulatory challenges facing housing development, the convening highlighted a range of promising solutions. Discussed during the convening were creative financing mechanisms that help bridge funding gaps in housing production, particularly for affordable housing and small-scale housing development.
- Revolving Loan Funds – Publicly capitalized revolving loan funds provide subordinate, construction-phase debt for mixed-income projects, replacing the need for expensive, hard-to-secure limited partner equity and allowing the project to move forward. The key is the “revolving” nature of the fund: capital is deployed, repaid with interest upon project stabilization, and then immediately redeployed into the next stalled project. Unlike traditional subsidies, revolving loan funds establish a sustainable, high-leverage financing mechanism that can be utilized repeatedly without requiring new budget appropriations.
- Standardizing small-scale finance – New organizations, such as Build Trust, are working to standardize data and financing characteristics for small-scale infill development. This could help facilitate larger-scale investment in projects led by smaller developers by standardizing loan pools for smaller development.
- Leveraging federal funds – Funding like the Community Development Block Grant (CDBG) program, as well as recent federal tax legislation increasing Low Income Housing Tax Credit (LITHC) allocation and lowering the tax-exempt bond threshold, can help local governments spur housing development at a larger scale. Fannie Mae and Freddie Mac also continue to play a critical role, with significant increases in their investment to support larger affordable deals and underserved markets.
While significant barriers continue to limit access to homeownership and slow housing development, the convening demonstrated that progress is attainable with the right tools, partnerships and political will.
Concluding discussions highlighted creative financing strategies, public–private partnerships, and locally driven policy levers as critical tools for accelerating housing development. By aligning intergovernmental efforts and strengthening collaboration between the public and private sectors, meaningful progress can be achieved.
Special thanks to our program partners, U. S. Chamber of Commerce and Wells Fargo, for joining the convening.
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