U.S. Democratic presidential candidate Vice President Kamala Harris speaks at a campaign rally on August 10 in Las Vegas.
Justin Sullivan | Getty Images News | Getty Images
Supply is the “bipartisan sweet spot” of housing policy
“The ideal solution to the housing affordability challenges we face today is to increase supply,” said Dennis Shea, executive director of the J. Ronald Terwilliger Housing Policy Center at the Bipartisan Policy Center.
Since the foreclosure crisis, a major period of property seizures in the United States between 2007 and 2010, there have been far fewer new single-family homes and multifamily rental buildings under construction, said Janneke Ratcliffe, vice president of the Housing Finance Policy Center at the Urban Institute, a nonprofit think tank in Washington, D.C.
There is “a more acute deficit” when it comes to affordable housing, he said, whether for renters looking for quality rental units or first-time buyers looking for their first home.
To get to those 3 million new units, a Harris-Walz administration would introduce a “first-time tax incentive” for homebuilders who build starter homes sold to first-time homebuyers, according to proposals unveiled last week.
The initiative would complement the Neighborhood Housing Tax Credit, according to the announcement. A bill pending in Congress called Law on investment in neighbourhood housingwhich would promote the creation and rehabilitation of starter homes for sale in distressed communities, would create that tax credit, Shea said.
“This tax credit would be created and has strong bipartisan support,” he said.
My conclusion is that [Harris’] A housing plan would be worse than doing nothing.
Eduardo Pinto
Senior Fellow and Co-Director of the American Enterprise Institute's Center on Housing
Former President Donald Trump has also talked about ways to increase housing supply as part of his presidential campaign proposals.
“We're going to open up tracts of federal land for housing development,” Trump said in a statement on August 15. press conference. “We desperately need housing for people who can't afford what's happening now.”
But Edward Pinto, a senior fellow and co-director of the American Enterprise Institute's Center on Housing, said it is “much, much harder” for the government to pass “supply-side proposals,” compared with efforts that generate demand by making it easier for consumers to buy homes.
“My conclusion is that [Harris’] “A housing plan would be worse than doing nothing,” he said.
“It is difficult to define what a starter home is”
It will be important for Harris to clarify what she means by “first home,” said James Tobin, executive director of the National Association of Home Builders.
“It's hard to define what a starter home is,” Tobin said, because underlying costs make it difficult to keep construction expenses low.
“In most markets across the country, it's difficult for a first-time homebuyer to build because of labor costs, land costs, borrowing costs for a builder and then the cost of material,” he said.
Defining a price range for a starter home will also be important, as it can vary widely in different markets, Tobin said.
“In California, a starter home might cost $7,000,000 or $800,000, but in the South… it might only cost $250,000 or $300,000,” he said.
$40 billion innovation fund seems 'very high'
Harris' list of proposals also includes a $40 billion innovation fund. The money would allow local governments to fund local solutions for housing construction, as well as support local solutions for housing construction.
However, some experts are sceptical that the intended goal will be achieved.
“The federal government doesn't have a lot of authority over what happens at the local level,” Fairweather said. “It's up to local planning commissions whether they're going to allow more housing to achieve that goal.” [innovation fund] money.”
“But time and time again, citizens, local governments and local property owners ignore incentives because they are so reluctant to build more housing,” Fairweather said.
Moreover, the $40 billion housing innovation fund may be too expensive to afford, making it unlikely to receive bipartisan support, Shea said: “I don't know that the market could bear that price tag in Congress.”
Aid for first-time home buyers has less support
Harris hopes to provide $25,000 down payment assistance to first-time homebuyers who have paid rent on time for two years, with more generous support for qualifying first-generation homeowners.
The proposal stems from an idea put forward by the Biden-Harris administration Earlier this yearwhich called on Congress to implement $25,000 in down payment assistance exclusively for 400,000 first-generation homebuyers (or first-time buyers whose parents were not homeowners) and a $10,000 tax credit for first-time buyers.
Harris' plan would apply to all first-time homebuyers and expand outreach to more than 4 million qualified applicants over four years.
But “there's just not a lot of bipartisan support,” Shea said.
During an appearance on Fox Business on Aug. 16, Sen. Tim Scott, R-S.C., said Harris' $25,000 down payment assistance “will only increase demand while supply remains flat, meaning prices will go up and fewer people will be able to afford it.”
“And frankly, unless they incorporate financial education into some program, it's just going to mean that there's going to be a higher level of default,” Scott said.
To help tenants, Harris addressed two pending bills. The Democratic presidential candidate called on Congress to pass the Law to stop predatory investmentsa bill that calls for eliminating key tax benefits for those who own 50 or more single-family properties. This initiative would prevent large investors from investing large sums of money in single-family rental homes.
Meanwhile, the Law to prevent algorithmic facilitation of housing rental cartels I would crack down on companies that use tools to fix market rental prices.