Breaking Down Harris and Trump’s Proposals to Solve the Housing Affordability Crisis

Housing affordability has become a key concern for many voters nationwide. Both Vice President Kamala Harris and former President Donald Trump have put forward proposals to address the issue, each taking a different approach that aligns with their overall economic visions. Here's an overview of their plans and potential challenges brought up by critics.

Vice President Kamala Harris' Proposals

Vice President Kamala Harris has a multifaceted plan to address housing affordability. One of the cornerstones of her plan is the construction of 3 million new housing units over the next four years through tax breaks that incentivize homebuilders to focus on creating lower-cost starter homes. Harris believes this plan will make it easier for middle and lower-income families to enter the housing market.

Another significant element of Harris' plan is direct financial assistance. She has proposed offering up to $25,000 in down payment assistance to eligible individuals and families. This initiative aims to reduce the financial barriers that prevent many from purchasing their first home, especially lower-income buyers who struggle to save for a large down payment.

In addition to these measures, Harris has suggested new restrictions on how landlords determine rent increases. These restrictions aim to prevent excessive rent hikes, which have been a growing concern in many urban areas where rents have risen faster than wages.

Furthermore, Harris proposes limiting tax breaks for institutional investors who purchase single-family homes. By curbing such investments, she hopes to make more homes available to individuals and families rather than corporations looking to profit from the housing market.

Criticisms

One of the main criticisms is that Harris's plan requires significant congressional approval, making its implementation uncertain. Critics argue that without bipartisan support, the ambitious goal of building 3 million homes and providing financial assistance may face delays or never come to fruition.

Additionally, limiting investor participation could lead to fewer rental properties on the market and further increase home and rental costs.

Harris’ proposed rent control plan has also sparked debate. While intended to make housing more affordable for renters, rent control policies have historically led to unintended long-term consequences, such as:

• Driving up rents of properties not subject to rent capping

• Increased inequality --existing renters stay longer, making it difficult for new renters to secure affordable housing.

• Deterioration in housing quality due to landlords having less incentive to invest and maintain their properties.

Former President Donald Trump’s Proposals

Former President Donald Trump has a more market-driven approach to addressing home affordability that centers on reducing regulations that increase the cost of building new homes, reducing corporate taxes to stimulate the economy, and opening up federal land for housing development, which could significantly increase the amount of land available for construction.

By lowering regulatory barriers, stimulating the economy, and making more land accessible, his plan seeks to boost the housing supply and bring down costs for homebuyers.

Although Trump has not outlined specific steps to reduce regulations in his current proposals, his past presidency provides some insight into his approach. During his first term, Trump signed the Tax Cuts and Jobs Act (TCJA), which aimed to boost economic activity by reducing corporate taxes. In 2018, the U.S. economy grew by 2.9%, partly fueled by corporate tax cuts and increased consumer spending from larger paychecks, attributed to this legislation passed by Congress and signed into law by Trump.

He also promoted Opportunity Zones, encouraging investment in economically distressed areas. Development projects funded by Opportunity Zones created new housing and jobs, boosted local economies, and enhanced the quality of life by creating parks and community centers.

Another key element of Trump's housing policy is addressing the supply chain issues that have driven up the cost of building materials. Trump has emphasized that resolving these disruptions is essential for bringing down construction costs and, by extension, housing prices.

Criticisms

Former President Donald Trump's housing affordability proposals have sparked concerns, particularly around the ambiguity of regulatory rollbacks and the risk of overdevelopment.

While reducing regulations is a key aspect of Trump’s plan, the specific regulations he intends to target remain unclear. Critics argue that regulations, such as zoning laws, safety standards, and environmental protections, ensure that housing developments are safe, sustainable, and high-quality. Rolling back these safeguards without careful consideration could result in poorly constructed housing and worsen existing community issues.

Additionally, easing land use restrictions could encourage speculative building, leading to "ghost developments"—vacant or underutilized areas—further destabilizing the market and potentially triggering boom-and-bust cycles, further reducing affordability.

Initiatives similar to Opportunity Zones could result in mixed results. While some areas saw significant improvements with this plan, others did not experience the same level of investment or revitalization.

Conclusion

Both Vice President Harris and former President Trump have offered solutions to the housing affordability crisis, though their approaches differ significantly.

Harris’ plan focuses on increasing the housing supply through developer tax incentives, financial assistance for homebuyers, implementing rent caps, and limiting institutional investments, particularly in single-family homes.

Trump’s plan emphasizes reducing regulations, incentivizing investing in distressed areas, stimulating the economy through corporate tax breaks, and opening up federal land for development.

Both approaches aim to address the pressing issue of housing affordability, but each presents its own set of challenges and potential consequences. We encourage you to investigate each candidate's approach further for more information.