
Voters’ biggest grievance is housing, yet the topic has only recently started to emerge off the campaign trail. One important factor in this is the complex politics of real estate.
Vice President Kamala Harris unveiled her economic program on Friday, containing new housing ideas that include measures to support renters in need, take tough measures against corporate landlords, and accelerate the building of three million new homes in four years.
The Democratic contender has presented more thorough housing plans thus far than her Republican opponent, former President Donald Trump. However, both must contend with a political obstacle that has always plagued American housing policy and will only get more difficult as the affordability crisis deepens: Chen Zhao, the economics head at real estate firm Redfin, stated, “As a nation, we want housing to be both an affordable and a way to generate wealth.”
“The issue lies in the fact that wealth creation is contingent upon price increases, and when prices rise, affordability becomes a challenge,” the speaker stated.
Although mortgage rates have finally dropped after surging above 7% in recent months, purchasing a home is still extremely challenging. Millions of tenants are still struggling to pay their rent, and half of all renter households are now “cost burdened” due to increases in housing expenses of more than 5% since last year. In the meantime, there are still between 2.5 and 4.5 million unaccounted-for homes in the economy.
Zhao stated, “The main issue we need to be concerned about is supply.” “The most important thing we need to do is build more supply, and local zoning laws and building regulations are frequently one of the main obstacles—possibly the main obstacle to building more supply.”
That is a politically explosive truth. Not only does the federal government have little control over state and local zoning, which may be a hot-button issue in communities, but affordable housing runs the risk of devaluing existing landowners’ properties, who may then take political retribution.
Therefore, it should come as no surprise that, in the current supply-strapped market, both Trump and Harris have stressed measures to reduce costs.
Harris went above and above the $10,000 tax relief that the Biden-Harris administration had suggested on Friday, proposing $25,000 in down payment aid for first-time buyers. In a similar vein, the GOP platform urges to “Encourage homeownership and provide first-time purchasers with tax breaks.”
This policy drive, according to Diane Yentel, president and CEO of the National Low Income Housing Coalition, represents a change that started around four years ago and has only become stronger. “When presidential candidates discussed housing in any capacity before 2020, it was always in reference to middle-class home ownership,” she stated.
Democrats in particular are now giving the problem “much more attention than they have before,” according to Yentel, in part because of “the severity itself” of the crisis and “the needs of people with the lowest incomes.”
On the other hand, Trump has stated that extensive crackdowns on both legal and illegal immigration, including the detention and deportation of millions of people, would increase the quantity of housing available to Americans and reduce housing costs. However, some economists contest that finding, primarily due to the effect on new supply: homebuilding may be restricted if the construction industry’s sizable workforce of foreign-born workers were reduced.
According to Scott Lincicome, vice president of general economics at the libertarian-leaning Cato Institute, “It is commonly accepted that restricting immigration will ultimately drive up housing costs.” Furthermore, according to some analysts, Trump’s demands for higher tariffs may raise the price of various building supplies, which would discourage development.
The former president “will reduce government expenditures, halt the unsustainable immigration invasion that is raising housing costs, lower taxes for American households, do away with onerous regulations, and release suitable areas of federal land for housing,” according to a Trump campaign spokesperson, without directly addressing these criticisms.
Aside from other suggestions to increase supply, both parties are in favor of developing more land owned by the federal government. Harris put up new tax breaks for developers of “starter homes,” increased tax breaks for building affordable rental units, and a $40 billion fund “to spur innovative housing construction” on Friday.
The National Association of Home Builders CEO, Jim Tobin, expressed his support for tax incentives as a means of accelerating construction, but he also noted that there are still too many obstacles in the way.
He declared, “This administration has spoken with both hands.” “They put more obstacles in the way of creating more supply, while they talk about more supply.”
He mentioned the energy efficiency guidelines that federal agencies adopted this year for newly constructed homes that are supported by public funds. According to the Kansas City NAHB chapter, the proposed change would result in a price increase of almost $31,000 per home in the metro region, with only $657 saved in annual energy expenses. Tobin said that instead, the government should relax rules and use federal funding to support zoning changes.
“Building is too difficult in many places, and it’s driving up prices,” Harris said on Friday while in North Carolina. “Including at the state and local levels, we will remove obstacles and reduce red tape,” she declared.
The White House has already made an effort to change zoning, one way it has done so is by providing funding to local governments who want to modify the regulations to allow for more affordable homes. Although Zhao acknowledged that the primary means of pressuring federal politicians to pursue these reforms is through money, she contended that the administration’s housing initiatives thus far amount to “a lot of nibbling around the edges.”
“As president, she will carry on the struggle for universal access to cheap housing, and she is the ideal choice to turn America’s most infamously avaricious landlord, Donald Trump, into a loser once more in November,” a spokeswoman for Harris’ campaign said.
In contrast, a Republican-led government might not support zoning modifications.
In an effort to thwart developers’ and legislators’ attempts to reduce costs through higher housing densities, Trump has pledged to preserve single-family zoning. He charged supporters of threatening to destroy the suburbs by flooding them with low-income people and “criminals” during his 2020 reelection campaign.
A few housing economists advise against taking this position. “In some areas, single-family zoning would be negatively impacted by federal efforts to vigorously defend it at the state and local levels, which would negatively impact home affordability,” Lincicome stated.
In the past, Trump has changed his mind about zoning. Ben Carson, the secretary of Housing and Urban Development, commended localities that made it easier to create multifamily units and attacked single-family zoning while in office. However, the former secretary stated that “Any attempts to weaken single-family zoning should be opposed by a conservative administration” in the housing chapter Carson prepared for Project 2025, a policy playbook that Trump has rejected despite having longstanding ties to its writers.
Trump said at a rally last month that “There won’t be any developments of affordable homes close to your home,” despite having just told Bloomberg that he would relax environmental and permitting requirements to cut costs.