Vice President Kamala Harris, the Democratic candidate for the 2024 presidential election, included measures to combat soaring housing costs in the economic plan she announced on Friday. She promised to cut “red tape” in building homes and provide tax incentives for first-time buyers if elected.
“There’s a severe housing shortage; in many places it’s too difficult to build and that’s driving up prices,” Harris said Friday afternoon in her first major policy speech in Raleigh, North Carolina. “As President, I will work with industry to build the housing we need, both for rent and for purchase. We will remove barriers and reduce red tape, including at the state and local levels.”
The economic plan also includes a $25,000 down payment tax credit for people buying their first home. That’s higher than the amount of a one-year tax credit of up to $10,000 for middle-class families selling a new home that President Joe Biden announced during his March 2024 State of the Union address.
At the time, Biden also called for a two-year, $5,000 annual tax credit for middle-class first-time home buyers. Analysts believe the credit is unlikely to be approved by current members of Congress.
“We also know that as home prices increase, so does the down payment size. Even if aspiring homeowners save for years, it’s often still not enough,” Harris said. “As we work to address the housing shortage, my government will provide $25,000 to first-time homebuyers to help them with the down payment on a new home.”
Real estate industry experts believe Harris has the right diagnosis of the major issues affecting today’s housing market – high mortgage rates and low supply – but they worry her moves will increase demand and make the lack of supply even more problematic. protrude.
During her speech in Raleigh, Harris said that if elected, she would also provide a $6,000 child tax credit for one year and lower the cost of prescription drugs.
rental market
Harris pledged to address America’s housing shortage by building 3 million new homes that the middle class can afford by the end of her first term. The plan includes advancing a bill called the Stop Predatory Investment Act on Capitol Hill.
“As you know, corporate landlords, some of whom buy dozens or even hundreds of houses and apartments, then flip them and rent them out at extremely high prices – which can make it impossible for ordinary people to buy or even rent. Houses,” she said.
“Some corporate landlords collude with each other to set rent prices artificially high, often using algorithms in pricing software to do this. It is anti-competitive and increases costs. I will fight for laws to combat these practices .
Regarding the rental market, Harris in July cited efforts to ban “hidden fees and unexpected late fees that banks and other companies use to cover their profits,” while pushing to “compete with corporate landlords and limit unfair rent increases.”
The Democratic candidate’s speech resonated with Americans, who often cite housing costs as a top concern. Despite recent trends, housing in the United States remains expensive for many people, accounting for about 70% of total U.S. household debt, according to U.S. economist Nick Luettke. Moody’s.
Inventory in the multifamily market has increased significantly by nearly 25% over the past decade, and while effective rents have increased 20% since the end of 2019, they have recently fallen 1% year over year, Luettke said.
“Taking income growth into account, middle-income households now spend 26.8% of their income on the average apartment. While rent levels remain high for many, the national rent-to-income ratio has fallen by 2% since its peak in 2022, which is impressive. The 1% decline since the start of the pandemic highlights the critical role of inventory expansion in improving affordability,” Luettke said.
