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Housing Takes Center Stage in the Presidential Election

A view of a residential block in Central Falls, Rhode Island.

The future of US housing policy is a major question in the 2024 election. Photo: Maggie Janik.

Every presidential election cycle, those who work on housing issues (“housers”) watch the policy debate hoping that the nation’s housing challenges get some attention from those in the race. For decades those hopes have been dashed as housing has barely received a mention. But this year housing has not only made an appearance on the political stage, it has taken a leading role. In this election, housing affordability has emerged as a critical issue not just for the country’s poorest households or those on the expensive coasts but for those solidly in the middle class and in the heartland. Renters across a broad spectrum are struggling to find apartments that don’t require an excessive share of their monthly income, while would-be homebuyers are increasingly priced out, if they can even find an available home in today’s historically tight market.

So what are the candidates proposing to address these issues? Vice President Kamala Harris has formulated a fairly detailed housing plan that both seeks to stimulate greater production of affordable homes and help households afford to buy one. On the supply side, she has proposed expanding the Low-Income Housing Tax Credit program (LIHTC), which has been the principal source of new affordable rentals since 1986. Harris has also proposed tax incentives for homebuilders to produce more entry-level homes, as well as a tax credit to support the construction and rehabilitation of homes for sale in distressed communities where these investments don’t pencil out. The plan also includes financial incentives for state and local governments to streamline restrictive regulations that currently limit housing production and support innovative means of developing homes.

The campaign asserts that these initiatives would enable the construction of three million new homes over four years. That goal is certainly ambitious; it would represent a roughly 50 percent increase in housing production over the current rate. But while the target may be difficult to achieve, the emphasis on efforts to expand the housing supply—particularly of affordable rentals and entry-level homes—represents a sea change in the federal approach to housing assistance that has largely focused on demand-side help in recent decades.

In fact, the Harris plan includes a substantial new program that would provide $25,000 in downpayment assistance to four million first-time homebuyers over the next four years. This proposal has raised concerns that it would spur inflation in a tight housing market. However, this concern would be mitigated if the supply-side initiatives are quickly implemented and successful. And given the stark racial differences in wealth in the US, failing to address this critical demand-side constraint would unfairly leave millions on the sidelines. Given the massive cost of supporting so many homebuyers, a smaller scale and more targeted program would be more likely to get passed by congress, less likely to be inflationary, and give more time for supply-side efforts to bear fruit.

Finally, the Harris plan calls for efforts to rein in investors in single-family rentals who may compete with first-time buyers. Her proposal would limit tax breaks available to investors and would curtail coordinated efforts by large property owners to share data to set rents. It is difficult to gauge how effective these approaches would be. Single-family rentals play an important role in expanding choice for renters and the national share of single-family homes for rent is not particularly elevated relative to historic standards, although the shares are high in selected markets in the South and West. Cracking down on firms that aggregate rental data to help owners set rents is also unlikely to turn back the clock on what is now a far more sophisticated industry with respect to mining data to assess market conditions.

The Trump campaign has also consistently highlighted housing affordability, although it has not released any detailed policy proposals, so the specifics of their approach are not known. The Republican platform simply calls for the limited use of federal land for housing construction, tax incentives for first-time homebuyers, and efforts to cut unnecessary regulations that raise housing costs. Former President Donald Trump’s principal talking point on the campaign trail has been that immigrants are a chief cause of housing inflation and that efforts to curb immigration and deport millions of immigrants will bring housing costs under control. Notwithstanding the substantial personal suffering and economic toll that massive deportation would entail, the argument that immigrants are behind the recent housing cost rise has been rebutted by numerous economists who note that there is only a small correlation between house prices, rents, and levels of immigration. Immigrants are also an important source of labor to help expand the supply of homes.

Having made it to the political stage, the question is whether housing will see greater action by the federal government once the dust settles on the election. Given the specifics of the Harris plan in my view there would be more hope of progress in a Harris administration. But most of her agenda will require congressional action and bipartisan legislation, which has been rare in these hyper-partisan times. Still, many of these proposals have strong support from both parties, building as they often do on existing proposed legislation. And the groundswell of public opinion that has brought housing to center stage is not going away, as home prices and rents continue to stay near record levels. Housers will be eager to see how this drama unfolds, keeping hope alive that there will be meaningful action to address our country’s significant need for decent, affordable homes.

Chris Herbert is the managing director of the Joint Center for Housing Studies of Harvard University.