Countercyclical Stimulus Proposals for Multifamily Housing

In conjunction with earlier efforts to analyze the current downturn in housing construction, GAO conducted two symposia on countercyclical stimulus for multifamily housing in which leading housing experts discussed the key issues and evaluated the most significant options for aiding the homebuilding industry. This report contains a summary and the individual papers presented at the symposium on multifamily housing.

The opinions expressed at the conference focused on six proposals geared toward increasing the production of multifamily housing and rental units. Activities which have the potential to respond quickly to rental housing production needs include: (1) the conversion of buildings from nonresidential to residential use or subdivision of larger housing units into smaller rental units; (2) the development of small rental buildings with a few units where the development and construction process is similar to single-family housing; (3) the moderate rehabilitation of rental housing in substandard condition; and (4) the conversion of unsold ownership housing to rentals. An analysis of countercyclical aid to multifamily housing revealed two primary strategies for attacking the inhibiting effect of high interest rates and falling real income: subsidies to homebuyers to stimulate the construction industry, and Federal economic policies to cultivate an economy which attracts more homebuyers. The conference produced analyses of the current economic factors affecting the housing industry and the relative cost of options proposed by GAO to stimulate rental housing production.