The U.S. housing crisis is now a major issue in the 2024 presidential race, with both Donald Trump and Kamala Harris proposing different strategies to tackle soaring home prices and the shortage of affordable homes. Housing affordability hasn’t been at the forefront of presidential campaigns for decades, but with an alarming shortage of homes and rising costs, it has become a key concern for voters. Both candidates recognize the housing crisis as a pivotal issue, but their plans diverge significantly.

Housing Affordability: A Central Issue in 2024

The housing shortage has grown increasingly dire, with the gap between supply and demand widening. According to a Zillow analysis, the nation’s housing shortage climbed to 4.5 million homes in 2022, exacerbating an already strained market. Compounding this, student loan debt and inflation have made homeownership unattainable for many, especially younger Americans.

During the Sept. 10 presidential debate, Vice President Kamala Harris highlighted her middle-class roots and her focus on helping working families afford homes. Harris noted that many young families are being priced out of the housing market and emphasized that she is the only candidate offering a comprehensive plan to address the crisis.

Former President Donald Trump countered by focusing on the economic conditions under President Joe Biden, emphasizing that inflation has worsened the affordability crisis. Trump’s platform centers around tax cuts and reducing regulatory barriers, which he argues will lower housing costs.

Harris’s Plan: Government Support to Spur Housing Development

Kamala Harris has proposed building 3 million homes over the next four years, a significant ramp-up in construction that she says will address the housing shortage. This ambitious plan would be supplemented by incentives for builders, a $40 billion fund to promote housing development, and policies aimed at streamlining zoning and permitting processes.

• Tax Incentives for Builders: Harris’s proposal includes tax credits to encourage developers to build more affordable homes. The aim is to increase the supply of housing, particularly for first-time homebuyers and low-income renters. Building at this scale would require addressing the labor shortage, which has hampered construction efforts nationwide.
• Challenges: While her plan is comprehensive, there are obstacles. The National Association of Home Builders (NAHB) has pointed out that increasing production by 750,000 homes per year would require significant regulatory reform, a larger workforce, and technological advancements to expedite the approval process. Harris’s plan to remove regulatory barriers could reduce costs, but critics argue that without addressing supply-side bottlenecks, prices could continue to rise.

Harris has also proposed measures to assist renters. Her plan includes rent caps for large corporate landlords, limiting rent increases to 5% annually. This plan has drawn criticism from property owners and developers, who argue that it could discourage investment and maintenance in rental properties, ultimately exacerbating the housing shortage.

Jim Tobin, CEO of NAHB, expressed concerns that rent controls could become a disincentive for developers, potentially reducing the investment needed to build new housing units. He urged a focus on reducing federal regulatory burdens to increase the housing supply rather than imposing rent caps.

Trump’s Plan: Deregulation and Immigration Reform

Donald Trump’s approach to the housing crisis focuses on deregulation. He proposes eliminating restrictive zoning laws, streamlining building permits, and reducing environmental reviews that he argues drive up housing costs. Trump believes that removing these barriers will lower the cost of construction and expedite the process of bringing new homes to market.

• Zoning Reform: Trump has criticized the restrictive zoning laws in many states, which limit the construction of multifamily units and affordable housing in certain areas. His plan would encourage local governments to adopt more flexible zoning regulations, allowing for more diverse types of housing to be built in residential areas. By cutting through bureaucratic red tape, Trump aims to make housing more affordable and available to the general public.
• Repurposing Federal Land: Both Trump and Harris have floated the idea of using federal land for affordable housing development, though neither has provided details on which tracts of land would be repurposed. Trump’s plan would likely prioritize areas with lower regulatory hurdles, allowing developers to build more efficiently and at lower costs.

A significant part of Trump’s platform is immigration reform, which he links to the housing crisis. Trump has proposed mass deportations of undocumented immigrants, asserting that this will reduce competition for jobs and housing. However, this could have unintended consequences for the construction industry.

The U.S. construction industry heavily relies on immigrant labor, with undocumented workers comprising nearly 20% of the workforce. If deportations were carried out on a large scale, the housing market could face severe delays and increased costs due to labor shortages. Critics argue that deportations would worsen the housing shortage by reducing the workforce available to build new homes.

Immigration reform, according to construction experts, could instead focus on creating pathways for skilled immigrants to work in the industry legally. This would alleviate the current labor shortage without disrupting the housing market. Without enough workers, Trump’s plan to cut regulations may falter due to the lack of manpower to build the needed homes.

The Economic Reality: Inflation and Housing Costs

Both Harris and Trump have addressed the economic factors driving the housing crisis, but their solutions differ sharply. Trump has linked inflation directly to rising housing costs, blaming the Biden administration for creating an environment where mortgage rates and home prices have soared.

While Trump has promised to lower mortgage rates, it’s important to note that the president has no direct control over interest rates, which are set by the Federal Reserve. Trump’s calls for deregulation are aimed at reducing the costs associated with building homes, which could help alleviate some inflationary pressures in the housing market.

On the other hand, Harris has proposed a more direct approach by offering up to $25,000 in down-payment assistance for first-time homebuyers who meet certain conditions. While this may help more Americans purchase homes, some experts worry that it could artificially inflate demand, pushing prices even higher in already competitive markets.

Different Roads to Solving the Crisis

The housing market remains a key issue in the 2024 election, with both Donald Trump and Kamala Harris offering starkly different solutions. Harris’s plan focuses on government intervention and building more homes, while Trump’s approach centers on reducing regulation and cutting taxes. Both candidates recognize the severity of the housing crisis, but their paths forward reflect their distinct political philosophies.

For homebuilders and industry experts, the next administration’s policies will significantly impact the future of the housing market. Whether through increased government support or by reducing regulatory barriers, the construction industry will play a crucial role in addressing the nation’s housing shortage. However, the long-term success of either plan will depend on the ability to balance demand-side measures with efforts to increase the supply of affordable homes. As the election draws near, voters will be looking for concrete solutions to a problem that has been decades in the making.

Looking for Solutions in Your Own Business? The BPA Can Help

As the housing debate dominates the political stage, business owners in the construction and homebuilding industry face their own set of challenges. Navigating market conditions, managing rising costs, and staying ahead of regulations can be daunting. That’s where Small Business Growth Partners (SBGP) steps in with their exclusive Business Diagnostic & Plan of Action (BPA).

The BPA is a powerful tool designed to help homebuilders and contractors like you optimize operations, navigate industry disruptions, and grow your business. Valued at over $4,200, this service is offered at no additional cost to members of homebuilding associations across the country.

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Don’t let the unpredictability of the housing market catch you off guard. Claim your BPA today and equip your business with the tools it needs to succeed, regardless of who wins the election in 2024.