US Democratic presidential candidate and Vice President Kamala Harris delivers a speech at a campaign rally in Las Vegas on August 10.
Justin Sullivan | Getty Images News | Getty Images
Supply is ‘bipartisan best’ for housing policy
“The best bipartisan option to address current housing affordability challenges is to increase supply,” said Dennis Shea, executive director of the J. Ronald Terwilliger Center for Housing Policy, a bipartisan policy center.
Since the foreclosure crisis, the major period of property forfeitures in the United States from 2007 to 2010, there has been an increase in the number of new single-family homes and multifamily rental buildings being built, said Janneke Ratcliffe, vice president of housing finance policy. The number is greatly reduced.
She said there is a “worse shortage” of affordable housing, whether for renters looking for quality rental units or first-time buyers looking for their first home.
To secure those 3 million new homes, the Harris-Walz administration would introduce “first-ever tax incentives” for homebuilders who build starter homes for first-time buyers, according to proposals unveiled last week.
The initiative will supplement the Neighborhood Housing Tax Credit, according to the announcement. A bill pending in Congress is called Neighborhood Residential Investment ActShea said it would promote the creation and rehabilitation of new homes for sale in poor neighborhoods and would create tax credits.
“This will create a tax credit and has strong bipartisan support,” he said.
My conclusion is that (Harris’) housing plan is worse than doing nothing.
Edward Pinto
Senior fellow and co-director of the Housing Center at the American Enterprise Institute
Former President Donald Trump also talked about ways to increase the supply of housing as part of his presidential campaign proposals.
“We will open up federal lands for housing,” Trump said in an Aug. 15 statement. according to Meeting. “We desperately need housing for people who can’t afford what’s happening now.”
But Edward Pinto, senior fellow and co-director of the Housing Center at the American Enterprise Institute, said it would be “much more difficult” for the government to create demand through “supply-side proposals” than the government’s efforts to create demand by making it easier for consumers to buy homes.
“My conclusion is that (Harris’s) housing plan is worse than doing nothing,” he said.
“It’s hard to define what a starter home is”
James Tobin, chief executive of the National Association of Home Builders, said it was important for Harris to clarify what she meant by a “starter home.”
“It’s hard to define what a starter home is,” Tobin said, because the underlying costs make it difficult to keep construction costs low.
“In most markets in the country, it’s difficult to build homes for first-time buyers because of labor costs, land costs, builders’ borrowing costs and material costs,” he said.
It’s also important to identify a range of price points for starter homes, Tobin said, because price points can vary widely in different markets.
“In California, a starter home might cost $70,000 or $800,000, but in the South … it might only be $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. This funding will enable local authorities to fund and support local home building solutions.
However, some experts are skeptical that it can achieve its goals.
“The federal government doesn’t have a lot of power over what happens at the local level,” Fairweather said. “Whether local planning committees are going to allow more housing to be built gets (Innovation Fund) money.”
“But time and time again, local people, local government, local homeowners ignore incentives because they are so resistant to building more housing,” Fairweather said.
Additionally, a $40 billion Housing Innovation Fund may be too costly and unlikely to gain bipartisan support, Shea said: “I don’t know if the market will bear that price in Congress.”
Less support for first-time homebuyers
Harris wants to provide $25,000 in down payment assistance to first-time homebuyers who pay two years of rent on time, as well as more generous support for qualifying first-generation homeowners.
The proposal stems from an idea floated by the Biden-Harris administration earlier this yearcalls on Congress to provide $25,000 in down payment assistance specifically for 400,000 first-generation homebuyers (or first-time homebuyers whose parents are not homeowners) and a $10,000 tax credit for first-time homebuyers.
Harris’ blueprint would apply to all first-time homebuyers and expand coverage to more than 4 million qualified applicants within four years.
But “there’s not a lot of bipartisan support,” Shea said.
On Aug. 16, Sen. Tim Scott, R-S.C., told Fox Business Channel that Harris’ $25,000 down payment assistance “will only increase demand while supply remains the same.” Meaning prices will go up and the population will be less able to afford it. “
“Frankly, unless they incorporate financial literacy into any plan, it just means that default rates are going to be higher,” Scott said.
To help renters, Harris addressed two pending pieces of legislation. Democratic presidential candidates call on Congress to pass Stop Predatory Investing Acta bill calling for eliminating a major tax break for people who own 50 or more single-family properties. The move would restrict major investors from purchasing large numbers of single-family rental homes.
at the same time, Preventing Algorithms from Promoting Rental Housing Cartels Act There will be a crackdown on companies using tools to determine market rental prices.
