The recent economic policies unveiled by Vice President Kamala Harris have brought affordable housing back into the limelight. Harris proposed the construction of 3 million new housing units over the next four years to address the growing housing affordability crisis. This approach has been praised by experts in the field, such as Daryl Fairweather, chief economist at Redfin, who sees increasing supply as a critical factor in addressing affordability challenges. However, Dennis Shea, executive director of the Bipartisan Policy Center’s J. Ronald Terwilliger Center for Housing Policy, emphasizes the need for bipartisan support around increasing housing supply to truly make an impact.
Janneke Ratcliffe, vice president of the Housing Finance Policy Center at the Urban Institute, highlights the acute shortfall in affordable homes for both renters and first-time buyers. The aftermath of the foreclosure crisis has significantly impacted new construction, leading to a shortage in quality rental units and homes for purchase. This shortage has further exacerbated the affordability crisis in the housing market, necessitating bold initiatives like those proposed by Harris to bridge the gap and make housing more accessible to all.
While Harris’s proposals have garnered praise from some quarters, there are critics like Edward Pinto, senior fellow at the American Enterprise Institute’s Housing Center, who view her plan as potentially ineffective. Pinto argues that supply-side proposals are harder to implement than demand-based strategies, casting doubt on the viability of Harris’s housing plan. Furthermore, James Tobin, CEO of the National Association of Home Builders, points out the challenges in defining and building “starter homes” at affordable price points, particularly across different regional markets.
The Role of Government in Affordable Housing
Former President Donald Trump has also emphasized the need to increase housing supply, particularly through initiatives like opening up federal land for construction. However, both Harris and Trump face challenges in gaining bipartisan support for their housing proposals. Tim Scott, a Republican senator from South Carolina, criticized Harris’s down-payment assistance plan, highlighting concerns about increasing demand without addressing the supply side. Additionally, questions have been raised about the feasibility and effectiveness of Harris’s proposed $40 billion innovation fund in empowering local governments to tackle housing affordability at the grassroots level.
While the focus on affordable housing initiatives is a positive step forward, there are lingering doubts about the practicality and impact of these proposals. It is essential for policymakers to consider a comprehensive approach that addresses both supply and demand dynamics in the housing market to truly make homeownership and rental options more accessible to all Americans. By engaging in meaningful dialogue and collaboration across political divides, we can work towards a more equitable and sustainable housing future for generations to come.