Kamala Harris’ housing plan is the most aggressive since the post-war boom

One Washington Post In Wednesday’s opinion, they attributed the housing affordability crisis to a lack of supply, estimating that the U.S. needs 3 million more homes, almost all of them in the lower half of the market.

The Harris plan released earlier this month aims to increase affordable housing inventory by encouraging more construction while offering $25,000 down payment assistance for first-time buyers.

Parrott, who co-owns housing consulting firm Parrott Ryan Advisors and is a former White House economic adviser, and Zandi have pointed to expanding a tax break for developers known as the Low-Income Housing Tax Credit that would raise rents to affordable accessible. pound.

To add more affordable homes for purchase, the Harris plan would also allow builders to get a tax break on the profits of homes that are built and sold to first-time buyers.

Another part of the plan would create a new tax credit for renovating homes that couldn’t be sold at a high enough price to recoup the repair costs. This would bring additional supply to the market that would otherwise remain unused.

To overcome infrastructure shortfalls and any local political resistance, the Harris plan would provide more money for states and communities.

“Each of these moves would be significant on their own, but together they would represent the most aggressive supply-side push since the national housing investment that followed World War II,” Parrott and Zandi wrote.

The federal government then provided assistance to veterans through the GI Bill, which included, among other things, favorable conditions for buying a home. This spurred more demand and construction.

Cost of Harris Housing Plan

To be sure, the plan comes with a hefty price tag: $125 billion. It should be paid for with tax revenue or offset by spending cuts elsewhere, they noted. Otherwise, it would add to the federal budget deficit and help raise mortgage rates, making homes less affordable.

But the upfront costs of increasing supply are far outweighed by the long-term costs of allowing the housing crisis to worsen, they warned.

“Our lack of affordable housing will continue to undermine savings, opportunity and growth in ways that will long-term harm the nation’s economy,” Parrott and Zandi said. “A careful effort to address the problem now will ultimately lead to more growth and less cost.”

Trump’s housing plan

For his part, Donald Trump told Bloomberg he would lower housing costs by relaxing environmental and permitting rules. But he also suggested at campaign events that he would limit low-income housing developments in the suburbs.

The GOP’s 2024 platform blames high housing costs on illegal immigrants and promises to deport them, which some housing experts said would reduce the availability of construction workers and raise costs. The platform also promises a combination of demand-side and supply-side measures.

“To help new homebuyers, Republicans will lower mortgage rates by reducing inflation, open limited portions of federal land to allow new homes to be built, promote homeownership through tax incentives and support for first-time buyers, and reduce unnecessary regulations that drive up housing costs. “, it is said.