This is one in a series of States Newsroom reports on the major political issues in the presidential race.
WASHINGTON — As housing costs and supply remain top issues for voters, both presidential candidates have laid out plans to overcome the crisis, hoping to win over voters before the Nov. 5 election.
The coronavirus pandemic that began in 2020 has deepened the problems in the housing market, and supply chain disruptions, record low interest rates and increased demand have contributed to an enhance in housing prices, – according to a study conducted by the Journal of Housing Economics.
While housing is typically handled locally, housing supply is tight and rents continue to skyrocket, putting increasing pressure on the federal government to lend a hand. Democratic presidential candidate Kamala Harris and Republican presidential candidate Donald Trump agree that this is a problem that needs a solution, but their solutions diverge.
The Harris and Trump campaigns did not respond to States Newsroom’s requests for details about the overall housing proposals being discussed by the nominees.
The promise: millions of up-to-date homes
Harris plan calls for the construction of 3 million houses within four years.
The United States has a shortage of approximately 3.8 million homes for sale and rentaccording to Freddie Mac’s 2021 estimates, on which it is still based.
Additionally, homelessness reached a record high of 653,100 people since January last year, and “a record 22.4 million renter households spent more than 30 percent of their income on rent and utilities,” up from 2 million households since 2019, according to a study by Wspólne Harvard Center for Housing Studies.
“This is obviously a multi-pronged approach because there are many factors contributing to high rents and housing affordability, and my plan is to address many of them at once so that we can actually have the net effect of lowering costs and making home ownership and renting more affordable price-wise,” Harris said in a September interview with Wisconsin Public Radio.
Promise: intended for single-family housing
Trump has long opposed multi-family housing and instead favored single-family zoning that would exclude other types of housing. Zoning regulation is handled by local government agencies, not the federal government, although the federal government can influence this.
“There will be no low-income housing developments built in areas right next to your house,” Trump said at an August rally in Montana. “I will keep criminals out of your neighborhood.”
The promise: obtain congressional approval
They predicted the election that Democrats will regain control of the U.S. House of Representatives, but Republicans are poised to win the Senate, which means any housing proposals will have to be overwhelmingly bipartisan.
“How much money will really be available without a significant increase in revenue to be able to do all of the things that both Trump and Harris are proposing?” Ted Tozer, nonresident fellow at the Urban Institute’s Housing Finance Policy Center, said in an interview with States Newsroom. “All the money comes from Congress.”
Many of Harris’ policies rely on cooperation with Congress because historically the federal government has had confined tools to address housing shortages.
“There is a hunger on the Democratic side for more action, for more direct government intervention in the housing market than we have seen in a long time,” said Francis Torres, deputy director of housing and infrastructure at the Bipartisan Policy Center.
Almost all of Harris’ proposals would require Congress to pass legislation and appropriate funding. The first is S.2224introduced by Senator Sherrod Brown, Democrat of Ohio, which would amend the U.S. tax code to prohibit private equity firms from purchasing homes in bulk by denying “interest and depreciation deductions for taxpayers who own 50 or more single-family properties,” according to the bill.
Second bill, P. 3692introduced by Senator Ron Wyden, an Oregon Democrat and chairman of the Senate Finance Committee, would prohibit the employ of algorithms to artificially inflate rent costs.
Both bills would need to reach the 60-vote threshold to advance to the Senate, regardless of which party controls.
The promise: $25,000 down payment assistance
Harris has pledged to support first-time homebuyers, but Congress would have to appropriate funding for her proposed $25,000 down payment assistance program that would benefit about 4 million first-time homebuyers over four years.
It’s a proposal that has been met with skepticism.
“I’m really concerned that down payment assistance will actually put more pressure on home prices because you’re essentially giving people extra cash to pay more for the home they’re going to bid on,” Tozer said. “So by definition, by engaging in a bidding war, they will spend more.”
Harris also proposed creating a $40 billion innovation fund for local governments to build and create housing solutions, which would also require congressional approval.
The promise: opening federal lands
Both candidates support making some federal land available for housing development, which would mean selling the land for construction purposes with a commitment to retain a certain percentage of housing for affordable housing.
Federal government owns approximately 650 million acres of landi.e. approximately 30% of all land.
Neither candidate went into detail about this proposal.
“I think it’s a sign that at least the Harris campaign and people in her orbit are thinking about solving the housing affordability problem with more decisive government action than has been the case in several decades,” Torres said.
The promise: expand tax breaks
The biggest tool the federal government has used to address the housing crisis is the Department of Housing and Urban Development’s Low-Income Housing Tax Credit, known as LIHTC. Harris has promised to expand this tax break, but has not provided details on how much she wants it to expand.
This program provides tax credits to offset construction costs in exchange for a specified number of rent-restricted apartments for low-income households. But the limitation is momentary, lasting approximately 30 years.
There is no similar program for apartments intended for ownership.
“It’s an interesting moment because, on the other hand, on the Trump side, even though they’ve diagnosed a lot of similar issues, there’s not as much willingness to use the power of the federal government to ensure affordability,” Torres said.
Trump’s housing record
The Trump campaign does not include a housing proposal, but various interviews, rallies and a review of Trump’s first four years in office provide a roadmap.
During Trump’s first administration, many of his HUD budget proposals were not approved by Congress.
In all four of the president’s budget requests, he outlined proposals to enhance rent by 40% for the roughly 4 million low-income households on rent vouchers or for those who live in public housing, according to an analysis by the left-leaning think tank. Brookings Institution.
All four of Trump’s budgets also called for eliminating housing programs such as the Community Development Block Grant, which directs funds to local and state governments to renovate and build affordable housing. Trump’s budget would also cut the Low-Income Home Energy Assistance Program, known as LIHEAP, which is a home energy assistance program for low-income families.
Additionally, Trump Opportunity Zones authorized under the 2017 Tax Cuts and Jobs Act, which provide tax incentives for businesses and real estate to invest in low-income communities, have yielded mixed results.
The promise: cut regulations and add tariffs
In an interview with Bloomberg Trump has said he wants to focus on reducing regulations in the permitting process.
“Your permits, your permitting process. Your zoning if… and I went through years of zoning. “The zoning is like… it’s a killer,” he said. “But we will do it and we will reduce housing prices.”
During campaign rallies, Trump often said he would impose 10% tariffs on all goods entering the US. He also proposed tariffs of 60% on China.
Trump said this tariff at a rally in Georgia is “one of the most beautiful words I have ever heard.”
Tozer said adding trade policies such as tariffs on construction materials such as lumber would raise home prices.
Promise: deport immigrants
Trump argued that his mass deportation plan would lend a hand free up the housing supply. Karoline Leavitt, Trump’s national press secretary, he told the New York Times. that deporting immigrants would lower housing costs because migration “raises housing costs.”
The former president did it main campaign promise deport millions of immigrants.
Tozer said housing and immigration are linked because the ability to build homes depends on workers approximately 30% of construction workers are immigrants.
“By closing the border, you are probably taking away the ability to build these houses,” he said, adding that all of these policies are interconnected.
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