Housing Debate Takes Center Stage in Presidential Campaign

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ICARO Media Group
Politics
18/08/2024 17h26

In the race for the White House, the issue of housing has emerged as a major point of contention between Vice President Kamala Harris and former President Donald Trump. Both candidates have unveiled their housing plans, but navigating the tricky politics of real estate poses a significant challenge.

On Friday, Vice President Harris revealed her detailed housing proposals as part of her economic agenda. Her plan includes assisting struggling renters, cracking down on corporate landlords, and stimulating the construction of 3 million new homes within four years. Meanwhile, former President Trump aims to address housing costs by curbing immigration, which he believes would free up housing supply and lower prices.

The central challenge for both candidates is finding a balance between affordable housing and wealth generation. Chen Zhao, economics lead at Redfin, pointed out the dilemma, stating that generating wealth requires rising prices, but if prices escalate, housing becomes unaffordable.

Although mortgage rates have started to retreat after skyrocketing in recent months, the task of buying a home remains historically difficult. Renters also struggle, with shelter costs increasing over 5% since last year, resulting in an alarming number of households burdened by high rents. Additionally, the country faces a shortage of 2.5 million to 4.5 million homes, making the need for increased supply a major concern.

Addressing this supply shortage poses a significant challenge, primarily due to local zoning rules and building regulations. However, changing these regulations is a complex and politically sensitive task. Local zoning is often a flashpoint within communities, and reducing housing costs may have adverse effects on existing homeowners' property values, potentially impacting their voting preferences.

Both candidates have emphasized the need to bring down housing costs in the current supply-strapped market. Vice President Harris has proposed $25,000 in down payment assistance for first-time homebuyers, surpassing the $10,000 tax break previously suggested by the Biden-Harris administration. Meanwhile, Trump's platform aims to promote homeownership through tax incentives and support for first-time homebuyers.

The focus on affordable housing and the needs of low-income individuals has increased substantially amongst Democrats. Diane Yentel, president and CEO of the National Low Income Housing Coalition, mentioned that Democrats now prioritize the issue more than ever, reflecting the severity of the housing crisis.

Trump's approach to addressing housing costs involves cracking down on immigration to free up housing supply for U.S. citizens. However, economists question the validity of this approach, as restricting immigration could impact construction labor forces and increase the costs of construction materials due to tariffs.

Both parties support opening more federally owned land for development to boost housing supply. Vice President Harris proposed a new tax break for builders of "starter homes," expanded tax incentives for constructing affordable rentals, and a $40 billion fund to stimulate innovative housing construction.

However, the journey to increasing housing supply is not without its challenges. Jim Tobin, CEO of the National Association of Home Builders, welcomes tax incentives but raises concerns about the existing hurdles faced by the industry. Tobin suggests that easing regulations and leveraging federal dollars to encourage zoning reforms would be more effective.

Vice President Harris acknowledged the difficulty of the building process and the need to address barriers and cut red tape at the state and local levels. The Biden-Harris administration has already attempted to influence zoning through a grant program for municipal governments, aiming to accommodate more affordable housing.

While efforts are being made, some experts argue that these initiatives only scratch the surface. Funding is viewed as a crucial pressure point for federal policymakers to bring about the necessary reforms. Both candidates are determined to make affordable housing a priority, but the path to achieving this goal remains a highly debated topic.

As the presidential election approaches, housing remains a significant concern for voters. The divergent approaches of Vice President Kamala Harris and former President Donald Trump on this issue highlight the complexity of finding a solution that balances affordability and wealth generation.

The views expressed in this article do not reflect the opinion of ICARO, or any of its affiliates.

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