One writer looks at what the federal government, particularly HUD, can and cannot do regarding housing:

The problem is structural: Washington just isn’t set up to address the housing crisis. The federal government plays a large, but largely indirect, role in the housing market. It operates through incentives, credits, guarantees, and subsidies. Rather than building housing, it makes mortgages cheaper and covers part of market rents. Rather than setting up retirement communities, it provides tax breaks for developers. You could say the country’s real department of housing and urban development is the Treasury Department, along with Fannie Mae and Freddie Mac. The Senate committee responsible for housing is the Banking Committee…

It wasn’t always that way. Indeed, Washington played an aggressive role in expanding the country’s housing stock from the 1930s to the 1970s. As part of the New Deal, the government financed the construction of homes for tens of thousands of families. HUD was founded during Lyndon Johnson’s administration and, as part of his Great Society, set out to build or rehabilitate millions of housing units…

Something else is stopping Washington from addressing the housing crisis: the Tenth Amendment to the Constitution. Land-use policy is not the purview of the federal government. It’s the purview of the states. Congress cannot rewrite Los Angeles’s building code. The White House can’t decide to upzone West Hartford, Connecticut. “I used to spend time with my counterparts in other countries and they’d say, Well, we just updated our national building code and national zoning code. We just wrote a national housing strategy,” Donovan told me. “I’d say, Wait, you have a national building code?”

As my colleague Jerusalem Demsas has written, we have delegated our housing policy not just to state and local governments but to every neighborhood’s homeowners association. Residents of a given place have ample opportunities—zoning-board meetings, candidate forums, historical architectural reviews, city-council open mics—to stop development. So they do. And thus mostly wealthy, mostly older people shape policy to their preferences: keeping new families out, maintaining single-family zoning, stopping development, and prioritizing the aesthetics of buyers over the needs of renters.

I understand the difficulties of creating federal laws or policies that then run into local government and zoning issues. I have written about this.

But, I am a little confused about the argument overall. It might be more accurate to say that the HUD and federal agencies have been reluctant to be directly involved in providing housing. The United States tried to provide some public housing in the mid-twentieth century and this did not go well. The federal government ended up retreating and, as the article notes, largely provides help now through housing vouchers.

At the same time, the federal government has an impact on financial markets, housing policy, and housing aspirations. Look at all of the interest in addressing interest rates. Or, the interest in mortgage regulations. Or, how politicians discuss homeownership. In other words, one journalist provided this quote of how housing works in the United States: “The former governor of the Bank of England, Mervyn King, told me this: “Most countries have socialized health care and a free market for mortgages. You in the United States do exactly the opposite.”

Could the federal government do more to provide actual housing units? Yes, it could. This would require a concerted effort and resources as this has not been the approach for a while. Does the federal government promote housing, specifically supporting single-family homes? Yes, it does.