Bloomberg News
For the first time in a generation, housing could play a significant role in a presidential election, but the leading candidates have yet to stake out clear positions on the issue.
Housing affordability registered as the fourth most important issue for voters in a University of Michigan-Financial Times poll conducted in the spring, putting it ahead of traditional linchpin topics such as tax policy or unemployment.
While housing affordability and supply have crept into the national discourse before — namely during the post-World War II population boom and during the Civil Rights Movement of the 1960s — such instances are few and far between, said Brian Connelly, a business law professor at the University of Michigan who specializes in real estate, land use and zoning.
“I was not alive in the 60s, but housing has not been an issue that has taken on this level of importance in my lifetime,” Connelly said.
Driving this fixation are record low sales volumes, a rapid increase in rents and a surge in homelessness in some of the nation’s biggest cities. Some voters are concerned about their own housing situation, but others worry about family or friends, or the implications for racial inequality. The issue is top-of-mind for many voters, but especially younger ones who feel locked out of what has historically been the single greatest source of generational wealth.
While some of the biggest housing market hurdles are local land use laws and permitting practices, experts like Lee Ohanian, head of the University of California at Los Angeles’ Ettinger Family Program in Macroeconomic Research, are surprised federal politicians have not been more vocal about their strategies for alleviating these pressure points.
“Zoning and other regulations that affect housing are largely at the state and local level, but the federal government can incentivize state and local governments to make regulatory changes,” Ohanian said. “From that standpoint, I’m surprised we haven’t seen more.”
Former President Donald Trump, the Republican nominee, has espoused what some believe to be contradictory opinions on the matter. In a recent interview with Bloomberg, he said the key to solving the housing crisis was easing zoning restrictions, but his actions in office indicated a preference for leaving such decisions to local officials.
Trump’s signature housing achievement was ending the Obama-era changes to the Affirmatively Further Fair Housing provision of the Fair Housing Act, which attached greater reporting and planning requirements to Housing and Urban Development funds. The 2015 change called for municipalities to take more direct action to address segregation and was seen as incentivizing zoning changes to allow for affordable housing development. Trump said ending it preserved the “Suburban Lifestyle Dream.”
“I don’t think he has a huge identity on housing, aside from that particular action, which suggested that he might be more favorable to local control of planning and zoning and giving local communities more power to approve new housing,” Connelly said.
Along with promoting deregulation at all levels of government, the other pillar of the Trump housing agenda is bringing down inflation, thereby allowing for interest rates to fall and making mortgages more affordable. Though skeptics question whether the former president’s broader economic plan — including tax cuts, higher tariffs on trade and a crackdown on immigration — will impact the inflation picture.
Meanwhile, Vice President Kamala Harris, who became the presumptive Democratic nominee after President Joe Biden bowed out of the race earlier this week, has said little about housing affordability since moving to the top of her party’s ticket. She also has no direct track record on the matter.
Mark Zandi, chief economist at Moody’s Analytics, said he expects Harris will largely maintain the housing policies of the Biden administration, which have emphasized expanding the supply of housing through tax credits and other incentives. He added that her prosecutorial work as California’s attorney general — which included extracting a $18 billion settlement from large banks over mortgage-related misconduct — could make her better versed in the nuances of housing than the current president.
“She’s roughly going to stick to the script the Biden campaign was laying out,” Zandi said. “The way she frames things may be different, what she emphasizes could be different, but I don’t think President Biden was too comfortable with the details from a lot of the housing proposals that were put forward, so she might bring a more personal understanding of the issues.”
But taking up Biden’s approach to housing cuts both ways. The administration has been blamed for creating the conditions that led to the dramatic jump in housing prices in recent years. Also, recent proposals like the call for a 5% national cap on rent increases for properties owned by corporate landlords — which Harris endorsed — have been roundly criticized, even by affordability advocates.
“We are in the middle of a significant housing supply crisis, and any initiative that creates disincentives to expand the supply of rental housing — particularly affordable rental housing — is going to have an impact on rents,” said David Dworkin, president and CEO of the National Housing Conference. “The plan claims that new construction will be exempted, but it does not take into account the chilling impact that this will have on decisions on whether to pursue new projects.”
Neither the Trump nor Harris campaign responded to requests for comments about their housing objectives this week.
Still, even though the candidates have said little about the topic, both parties have incorporated housing into their respective platforms. The Democrats’ approach leans more heavily on supply-side subsidies and Republicans tout a more market-based approach, but many ideas, such as opening up federally controlled lands for housing development, supporting first-time buyers and rolling back certain regulations, have gained traction on both sides of the aisle.
To some degree, the bipartisan nature of concerns about the housing issue — as well as the solutions needed to address it — make it ill-suited for the adversarial politics of a presidential showdown.
Zandi also noted that while the issues of housing affordability are broadly recognized, the views on how the issue should be handled can differ widely within parties and between politically aligned voters.
“There are a lot of cross currents — what’s good for somebody isn’t always good for someone else. Higher house prices are good for people who own, but if you’re a first-time home buyer they can lock you out,” he said. “You’ve got constituencies on either side that complicate the conversation.”
Some housing advocates would be happy to see the topic of affordability stay out of the political crosshairs. Edward Pinto, senior fellow and co-director of the AEI Housing Center at the conservative-leaning American Enterprise Institute, said federal involvement in the housing sector tends to create more harm than good.
“When the federal government tends to get involved in this stuff, it doesn’t end well. The federal government is really good at inducing demand, but it’s much much harder to grow supply,” Pinto said. “Whatever needs to be done is likely going to be done by the private sector, not government subsidies.”
Others believe it is only a matter of time before the matter surfaces in the presidential campaigns, noting that the string of recent events have made it hard to concentrate on issues of substance.
“Cost of living is a campaign issue for Republicans, and obviously it’s not just gas or groceries. Housing is a really big component of cost of living,” said Mark Calabria, the director of the Federal Housing Finance Agency under Trump. “So, I certainly expect it to be talked about.”
Janneke Ratcliffe, vice president of the Urban Institute’s Housing Finance Policy Center, said she is already pleased with the level of discourse about housing policy, even if it has yet to make into a presidential stump speech.
“I’m actually quite excited about the degree of attention that is being paid to the housing affordability crisis in the national debate,” Ratcliffe said. “Could we talk even more? Absolutely. Can we continue to look for the multitude of solutions that are needed here, and bring forward proposals? Absolutely. But, the most important thing is that the issue has been raised and has made it to that level — really, for the first time in decades.”
