The housing crisis is one of the most significant policy challenges facing the nation. The housing shortage increases the cost of living for many people and discourages 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 issues; however, their positions largely do more harm than good. Unfortunately, neither candidate has proposed meaningful measures to break down the biggest barriers to housing construction in most of the United States. Exclusionary Zoning Rules It becomes difficult or impossible to build new housing to meet demand.
Harris has more detailed proposals. She Give first-time homebuyers a $25,000 tax credit and provide tax incentives to developers who sell homes to first-time homebuyers.She also Restricting the use of algorithms Setting rents, and Limiting rent increases and cracking down on “corporate” landlordsThe rent control idea may be a reference to the Biden administration’s recent plan to limit rent increases to 5% per year, but it’s not clear if Harris would support it. Committed to building 3 million new homes by 2029However, they are extremely vague about exactly how they plan to do this.
These policy proposals range from mediocre to terrible. A $25,000 subsidy for first-time homebuyers is unlikely to do much to alleviate the housing shortage. The fundamental problem is regulatory constraints on supply. In that environment, subsidizing demand only drives up prices. Moreover, it is primarily renters, not would-be homebuyers, who suffer most from the housing shortage. This subsidy plan won’t help them at all. The same can be said for any plan to give tax incentives to developers. It won’t help supply much as long as developers are largely prohibited in many places from building new housing, especially apartment buildings.
If zoning and other restrictions were eliminated, Harris’ tax credit incentives would be unnecessary — and, indeed, there would be no justification for favoring homebuying over other types of consumption in the tax code.
Rent control is a terrible idea and likely will actually make shortages worse. This is Economics 101 point, widely accepted by economists across the political spectrum. Don’t take my word for it. Take what prominent progressive economists say. Paul Krugman“The economy is in a very difficult position,” said Jason Furman, former chairman of the Council of Economic Advisers to former President Barack Obama.[r]Energy management is a bigger disgrace than any other economic policy in the toolkit.”
Finally, there is no reason to believe that corporate landlords are worse than other types of landlords or that algorithmic pricing is making the housing crisis worse. In fact, corporate landlords are often just as good or better than “private” landlords. Longtime renters who have lived under both types of landlords say that corporate landlords tend to provide better management of their properties and better customer service. And algorithms help owners identify situations where they can increase their profits by lowering prices rather than just raising them.
Harris is right to want to build 3 million new homes. In fact, more than that would be great. But so far she hasn’t offered many suggestions for effective ways to get that done. Until she does, her desire for 3 million new homes is no more achievable than my desire to add 3 million unicorns to the nation’s collection of magical animals.
She has occasionally spoken out about cutting red tape. She has also supported Biden’s Plans to make “underutilized” federal land available for housing construction. the latter Good ideaHowever, it is not at all clear which lands will be opened up specifically and under what conditions.
Trump’s housing policy is less detailed than Harris’s, but it could be even worse. Housing Emblem The head of the Heritage Foundation’s controversial Project 2025 stresses that “a conservative administration should oppose any effort to weaken single-family zoning. Of course, single-family zoning is the most restrictive type of exclusionary zoning that blocks new housing construction in many parts of the country. Donald Trump has repudiated Project 2025, He claims he “knows nothing about it.” But the chapter on housing was written by Ben Carson, Trump’s former secretary of housing and urban development. Carson and Trump co-authored the book during the 2020 election. One The Wall Street Journal Editorial He has attacked efforts to curb exclusive single-family zoning. It reaffirmed its positionHe has pledged to block “low-income development” in suburban areas. At least when it comes to housing, Project 2025 seems to reflect Trump’s thinking, and that of those who might influence housing policy in a second Trump administration. Trump’s view of the world is NIMBYism (“Keep it out of my backyard”).
Trump’s immigration policies, a centerpiece of his platform, would also have a negative impact on housing. Evidence suggests that mass deportations of illegal immigrants would reduce the supply of housing and raise its costs, because illegal immigrants make up a significant portion of the construction workforce (outweighing the potential price-raising effect of immigration increasing the number of people needing housing). Trump and his allies have also warned that: Plans to drastically cut most types of legal immigrationCuts to work visas could also have a negative impact on housing construction (and Damage the economy in other ways).
The saving grace of Harris and Trump’s housing policies is that most of them cannot be implemented without new legislation, which would be extremely difficult to pass in a narrow Congress. Harris’ rent control policies, home purchase subsidies, and plans to crack down on “corporate” landlords are examples of this. Similarly, the Trump administration’s large-scale efforts to protect single-family zoning from state-level reform efforts would probably require new legislation.
But Trump’s immigration policies are an exception: a president can increase deportations and dramatically cut legal immigration without enacting new laws, and in fact, the Trump administration has done just that. Drastically cut legal immigration During President Trump’s previous term, deportation efforts Partially thwarted by state and local government resistance (As happened during the Trump administration’s first term.) But Trump may try to partially offset that by allowing him and his allies to use military force. Plan (Whether legal challenges to such efforts would thwart them is debatable.) At the very least, strengthening the federal government’s deportation efforts would drive undocumented immigrants further into hiding and reduce their ability to work in construction, where workers operate more openly and are more likely to be detected than in other occupations.
In short, most of the housing policies proposed by Harris and Trump are terrible. Their greatest strength is that they would be difficult to implement.
In fact, there are steps the federal government could take to alleviate the housing shortage. Most regulations on new housing are enacted by state and local governments, limiting the federal government’s ability to intervene. However, Congress could enact legislation requiring state and local governments that receive federal economic development grants to enact “YIMBY” laws that relax zoning rules. Perhaps, YIMBY Law Republican Senator Todd Young and Democratic Representative Derek Kilmer have proposed a bill that, while it might be a useful start, doesn’t go far enough. Those who oppose such legislation on the grounds of protecting local autonomy should remember that YIMBYism is actually the ultimate form of localism.
The Federal Department of Justice can also help A lawsuit aimed at persuading the court to rule that exclusionary zoning violates eminent domain provisions (Which That is soLawsuits like this could go a long way toward breaking down barriers to new housing construction. Federal backing is no guarantee of victory, but it could help by giving the case instant credibility before a judge.
Finally, the federal government could reverse President Trump’s immigration policies and help make legal immigration easier, which would create more construction workers and make housing construction cheaper and faster.
Unfortunately, candidates from both major parties are proposing none of these things. Instead, they are peddling nonsense that could make the housing crisis even worse.
