The housing crisis is one of the most important policy issues facing our country. Housing shortages drive up the cost of living for many people and prevent millions from moving to places with better jobs and educational opportunities, slowing economic growth and innovation. Kamala Harris and Donald Trump have both taken positions on housing, but their ideas are often more harmful than helpful. Unfortunately, neither candidate has proposed meaningful measures to break down the biggest barriers to housing construction in most parts of the country. Exclusion zone rules Makes it difficult or impossible to build new housing to meet demand.
Harris is the one who has put forward a more detailed proposal. She suggests the following: Provides a $25,000 tax credit for new homebuyers and tax incentives for developers who sell homes to new homebuyers. She also advocates Limiting the use of algorithms Set the rental price, Set rent caps and crack down on “corporate” landlords. The rent control idea may be a reference to the Biden administration’s recent plan to cap rent increases at 5% annually, but it’s unclear whether Harris supports that. Harris also Promise to build 3 million new homes by 2029But it’s very vague as to how she plans to do that.
These policy ideas range from mediocre to abysmal. Giving first-time homebuyers a $25,000 subsidy is not going to do much to alleviate the housing shortage. The fundamental problem is regulatory constraints on supply. In such an environment, subsidizing demand simply drives up prices. Furthermore, the people who are hurt the most by the housing shortage are mostly renters, not homeowners. This subsidy plan does nothing for them. Neither does a plan that provides tax incentives to developers. It does little to increase supply as long as developers are prohibited from building new homes in many areas, especially multifamily housing.
Once zoning and other regulatory restrictions are lifted, Harris’s tax credit incentives will be redundant. And there is no good reason for the tax code to favor home purchases over other types of spending.
Rent control is a terrible idea that is likely to actually worsen the shortage. This is economics 101, widely accepted by economists across the political spectrum. Don’t take my word for it. Prominent progressive economists, for example, Paul KrugmanAnd Jason Furman, former chairman of Barack Obama’s Council of Economic Advisers, said:[r]Economic controls were as shameful as any economic policy in the tool kit.”
Finally, there is no good reason to think that corporate landlords are worse than other types of landlords or that algorithmic pricing is somehow making the housing crisis worse. On the contrary, corporate landlords are usually as good or better than “small” landlords. Listen to what longtime tenants of both types of landlords say: Corporate landlords usually manage their properties better and provide better customer service. And algorithms can help owners identify situations where they can lower or raise their prices to increase their profits.
Harris is right to want to build 3 million new homes. In fact, she would do well to build more. But so far, she hasn’t offered much in the way of doing so. Unless she does, her desire for 3 million new homes is much less feasible than my desire to add 3 million unicorns to the national stock of magical animals.
At times, she has spoken out about reducing the hassle of procedures. She has also been a vocal supporter of President Biden. Plan to make “underutilized” federal lands available for housing construction. The latter Good idea.However, it is not clear exactly which lands will be opened and under what conditions.
Trump’s housing agenda is less detailed than Harris’s, but it could be much worse. Housing Manager The Heritage Foundation’s controversial Project 2025 emphasizes that “conservative administrations should oppose any efforts to weaken single-family zoning,” which is, of course, the most restrictive type of exclusionary zoning that prevents new housing construction in many parts of the country. Donald Trump has disavowed Project 2025, He claims he “knows nothing about it.” But the author of the housing chapter is Ben Carson, Trump’s former secretary of housing and urban development. In the run-up to the 2020 election, Carson and Trump jointly wrote: no way The Wall Street Journal editorial He is attacking efforts to curb the designation of exclusive single-family housing zoning. He recently reaffirmed that positionHe promised to block “low-income development” in suburban areas. When it comes to housing, at least Project 2025 seems to reflect Trump’s mindset and the mindset of those who could potentially influence housing policy in a second Trump administration. Trump’s worldview is NIMBYism (“not in my backyard”).
Trump’s immigration policy is central to his agenda, and it will have a negative impact on housing. Evidence shows that mass deportations of illegal immigrants reduce the supply of housing and increase its cost, since illegal immigrants are a significant part of the construction workforce (a larger effect than the effect of immigration increasing the number of people needing housing, which could drive up prices). Trump and his allies also Plans for massive cuts to most types of legal immigrationA drastic reduction in work visas would also likely have a negative impact on housing construction. Damage the economy in other ways).
If there is a saving grace to Harris and Trump’s housing policies, it is that most of them cannot be implemented without new laws, which would be extremely difficult to pass in a closely divided Congress. Harris’s rent control policies, subsidies for home purchases, and plans to crack down on “corporate” landlords are no exception. Likewise, any major effort by the Trump administration to protect single-family zoning against state-level reform efforts will require new laws.
But Trump’s immigration policy is an exception. This administration can increase deportations and reduce legal immigration without new laws. In fact, the Trump administration has done just that. drastically cut legal immigration During Trump’s previous term, deportation efforts Partly hampered by resistance from state and local governments (as happened during Trump’s first term). But Trump was able to partially offset that by trying to use the military with his and his allies. Plan to do (Whether legal challenges to these efforts will block them is debatable.) At the very least, increased federal deportation efforts will force illegal immigrants further underground and reduce their ability to work on construction sites, where workers are in relatively open positions and more likely to be detected than in other occupations.
In conclusion, Harris and Trump are offering mostly terrible housing policies. Their main advantage is that they are difficult to implement.
In fact, there are steps the federal government could take to ease the housing shortage. Most restrictions on new housing are set by states and localities, so the potential for federal intervention is limited. However, Congress could enact legislation requiring states and localities that receive federal economic development grants to enact “YIMBY” bills that would relax zoning rules. Perhaps a stronger version. YIMBY Act As proposed by Republican Senator Todd Young and Democratic Representative Derek Kilmer (their versions would be a useful start, but they lack enough force). Those who oppose such bills on the grounds that they protect local autonomy should remember that YIMBYism is really the ultimate localism.
The Federal Department of Justice may also assist. A lawsuit to persuade a court to rule that the exclusion zone designation violates the acceptance clause. (any Yes, that’s right!). Such a lawsuit could go a long way toward breaking down barriers to new home construction. Federal assistance won’t guarantee victory, but it could help by giving judges immediate additional credibility to the argument.
Finally, the federal government could pursue the opposite of Trump’s immigration policies and instead make legal immigration easier, which would increase the construction workforce and make home construction cheaper and faster.
Unfortunately, neither major party candidate is willing to do this. Instead, they mostly just spit out nonsense that will likely make the housing crisis worse.
