Question

What are the options open to policymakers if their goal is to increase the availability of affordable housing in an area?

Answer 1

If the goal of the policymakers is to increase the availability of affordable housing in an area, the options available to the policymakers are following:-

( I ) Subsidize the suppliers or builders of affordable housing which will in turn lower their cost of supply of new affordable housing units. This will incentivize suppliers to increase the supply of affordabl housing units.

( II ) Government can also provide credit support, such as, in the form of a lower interest rate on housing loans, to the buyers of affordable housing units, this will also decrease total cost of the houses. Higher demand and profitability will lead to an increase in supply of the new housing units