In light of the housing affordability crisis spreading across the United States in California, Vice President Kamala Harris last week unveiled her Economic Agenda, goals to scale back housing costs for homeowners and renters across the country.
The presumptive Democratic presidential nominee appears to be using some tricks from the long-standing repertoire of California housing activists, emphasizing the necessity to increase supply and reduce the bureaucratic hurdles that hinder the development of latest housing.
“There is a serious shortage of housing,” Harris said last week during a speech in Raleigh, North Carolina. “In many places it is too difficult to build, and that is driving up prices.”
In her plan, Harris promised to construct three million recent owner-occupied and rental homes inside her first 4 years in office. Here are a few of her key policy proposals:
— Offer as much as $25,000 down payment for first-time home buyers and a $10,000 tax credit. This builds on President Joe Biden's proposal to offer 400,000 first-time home buyers with a $25,000 down payment.
— For the primary time, there will likely be a tax incentive for developers who construct entry-level homes and sell them to first-time buyers. This might be especially essential in California, where Governor Gavin Newsom's 2025 budget was recently cut $152.5 million in funding for CalHomea program geared toward constructing inexpensive homes, said JT Harechmak, senior policy manager on the nonprofit Housing Association of Northern California.
— Expanding existing tax incentives for corporations that create inexpensive housing.
— Elimination of tax advantages for big investors who purchase large numbers of single-family homes. Wall Street investors have come under fire because the Great Recession for purchasing up single-family homes across the country. Critics say their penetration of the market has limited the variety of first-time buyers. It's unclear how much supply this might unlock here in Harris' home state: The California Research Bureau has found that lower than 2% of single-family homes are owned by investors with 10 or more properties across the state.
— Ban on algorithm-based tools for setting rent prices. Landlords across the country use software programs to investigate massive amounts of knowledge about rental rates and emptiness rates after which receive recommendations on how much to charge for his or her units. RealPage, the corporate that makes the widely used YieldStar software, has been investigated in several states for antitrust violations. Allegations of price fixing.
— Enabling the development of latest inexpensive housing on federal land.
The housing plan is comparatively light on details and leaves many questions unanswered – most notably how it is going to be financed. Many of the proposals would require congressional support, but that will not be guaranteed.
Still, the plan has caught the eye of Bay Area housing activists, who at the moment are seeing the policies they’ve spent years pushing on the local level finally reach a national audience.
“Affordable resources are drying up across the country,” Harechmak said. “It's becoming a national problem like it hasn't been in a long time.”
The California Republican Party criticized Harris' economic program, arguing that housing costs within the state had skyrocketed even under Democratic control.
In addition to the measures outlined in her economic program, Harris also supports Biden's call for a law that will deny essential tax breaks to landlords with greater than 50 housing units in the event that they don’t conform to a 5% cap on rent increases.
Laura Foote, executive director of the housing organization YIMBY Action, believes that Harris' concentrate on supply will help tenants more in the long term than rent control.
“It's a good policy to limit the damage, but it won't fundamentally solve the problem,” Foote said. “Rent can only be reduced if supply increases.”
Originally published:
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