As millions of Americans prepare to cast their vote, it's interesting to note how housing policies have played a larger role than historically normal in the race for the White House.
Housing is always an important topic, but the recent challenges with inflation and higher interest rates, which has led to rising rents and stagnant property values, has put ownership and tenancy in the limelight.
Consequently, both Kamala Harris and Donald Trump have promoted policies to improve housing affordability, encourage first homebuyers and to curb predatory practices by some institutional landlords and investors.
Here is a breakdown of where each candidate stands on the major housing issues:
Homebuyer Help
Trump and Harris have tax policies designed to support first homebuyers. Vice-President Harris is prepared to offer $25,000 in downpayment assistance, reaching beyond the $10,000 tax break currently offered. President Trump has been less specific but promised “tax incentives that support first-time homebuyers”. This could include a range of measures, including a grant. However, it's more likely to feature tax deductions for mortgage interest, tax credits and assistance with mortgage insurance.
More Housing
One of America's biggest challenges is to build sufficient housing to keep pace with the growth of our population. The current lack of supply of homes either for sale or tenancy has bolster prices and rents. Ownership is unaffordable for millions. Harris has pledged to build 3 million new homes over the next four years, and she's spoken of the need to increase the supply of buildings for rent, too. She supports an expansion of the federal Low-Income Housing Tax Credit, as well as a new tax incentive to encourage developers to build starter homes. Another favorite initiative is a proposed $40 billion fund for construction innovation at a local government level.
The Trump campaign has promised to reduce red tape and to fast-track the building of homes. It is understood a second Trump administration would follow many of the initiatives favored by Harris. For example, creating the Low-Income Housing Tax Credit – also known as the Neighborhood Homes Tax Credit – has support across Congress.
Rewriting the Rules
One feature of the market that Harris and Trump have identified as a systemic problem is zoning regulations followed by local government. Both candidates rail against this red tape. They want fewer rules, including those related to the environment, and easier access to building permits to encourage developments in local communities. When he was President, Trump created the White House Council on Eliminating Barriers to Affordable Housing Development, which was to be implemented in his second term.
Housing Finance
Perhaps the biggest split between the candidates is on housing finance. Trump has in his sights the conservatorship of government-sponsored enterprises Fannie Mae and Freddie Mac. Basically, he's likely to close them down. Harris appears happy to retain them. The future of the Federal Housing Authority would also be under a cloud should Trump return to the White House.
Big Investor Threat
Institutional investors are seen as a problem by both camps. Harris and the vice-president nominee JD Vance have spoken at length about this. Harris wants Congress to pass the Stop Predatory Investing Act, which would end tax benefits for those who own and rent out 50 or more single-family homes. Vance appears to support this move. Both camps have also called for an end to the algorithmic calculation of rents, which in effect enforce cartel-like pricing on tenants across a city or urban district.
