Millions of Americans cannot afford to buy a home or rent a decent apartment, making housing a central issue for voters in the upcoming presidential election.

The main reason homeownership is out of reach for many is that there aren’t enough homes for sale to balance the market between buyers and sellers.

The deficit, which some economists estimate ranges from 1 million to about 4 million homes, has fueled bidding wars for most of the past decade that have driven up the median sales price of a U.S. home previously occupied at a record high of $426,900 in 2017. June – although home sales have been in sharp decline for more than two years.

Rising mortgage rates have also kept many homebuyers on the sidelines. The average rate on a 30-year mortgage hit a 23-year high of nearly 8% late last year, and is now at 6.44%.

The tenants have not had it any easier. Even though the median asking rent in the United States has been falling for more than a year following a wave of new apartment construction, it remains about 20% higher than before the pandemic.

Against this backdrop, Vice President Kamala Harris and former President Donald Trump have put forward proposals that they say will make the American dream accessible to more Americans.

Harris’ campaign laid out a detailed roadmap of policies aimed at expanding access to affordable housing for both buyers and renters, which includes offering first-time home buyers up to 25,000 $ in down payment assistance and tax incentives for builders and federal funds for cities to speed up the process. construction. She says her plan will add 3 million new homes over the next four years.

Trump says he will create tax incentives for home buyers, remove “unnecessary” regulations on home construction and make some federal land available for residential construction, although the campaign platform does not include any details. Trump also says he will lower housing costs by reducing inflation and ending illegal immigration.

Aside from the fact that many of the candidates’ policies would require support from a majority of lawmakers in Congress, which the next president may not have, economists say the campaign platforms offer good ideas, but no sure solutions to the long-standing problem of the real estate market. challenges.

Here’s a look at some of the candidates’ key ideas:

Trump’s crackdown on immigration

Trump and his campaign have repeatedly linked the nation’s housing problems to immigration, suggesting that mass evictions would ease housing demand, making housing more available and affordable.

The former president has long focused on undocumented immigrants as a central policy issue, but when it comes to housing policy, his campaign has also pointed the finger at immigrants who are also in the country legally. His running mate, Ohio Sen. JD Vance, blamed Haitian immigrants living in his home state for the housing problem.

Chris Herbert, managing director of the Harvard Joint Center for Housing Studies, said in a statement that rising interest rates and surging demand for housing in the pandemic era are behind the rise in costs – not immigrants.

“While immigrants contribute to overall housing demand, they cannot be blamed for the recent surge in housing prices and rents that took off in 2020 and 2021, as immigration reached its lowest levels for decades due to the pandemic,” Herbert said.

Jim Tobin, CEO of the National Association of Home Builders, said mass evictions could worsen the supply problem because a third of the homebuilding industry’s workforce is born in stranger.

“Anything that could disrupt the influx of foreign-born labor into our industry would be disruptive. There’s no doubt about it,” Tobin said.

Sarah Saadian, senior vice president of public policy at the National Low Income Housing Coalition, said undocumented people tend to live in crowded housing, so evicting only immigrants in a home would not create real vacancy, nor would it solve the affordability problem. dilemma.

“The most pressing thing is that wages and incomes are not high enough to cover rental costs and that has nothing to do with undocumented people,” Saadian said.

Harris’ $25,000 Down Payment Plan

Harris aims to directly help homebuyers by providing up to $25,000 in down payment assistance to first-time buyers who have paid their rent on time for two years.

The campaign, which says the program would help more than 4 million first-time buyers and cost $100 billion, says such down payment assistance is not new, noting that in 2019, nearly three Quarters of single-family mortgages included a down payment. assistance provided by public housing finance agencies.

Much like Trump’s plan, Harris’ proposal could, in some ways, backfire. Economists warn that introducing a buying incentive when the supply of homes for sale remains tight in many markets could increase prices, making homeownership less affordable. The impact could depend on the particular market. The impact could depend on the particular market.

“In Los Angeles, $25,000 down payment assistance is not enough, but in Detroit, it is enough,” said Daryl Fairweather, chief economist at Redfin.

However, if the number of homes on the market increases, financial assistance makes more sense because it can reassure home builders that “there will be buyers willing to buy” the homes they build. , Fairweather said.

The federal government has offered tax incentives to homebuyers in the not-so-distant past. In 2008, the Obama administration passed a first-time homebuyer tax credit of up to $7,500, as the housing market was reeling from the housing crash and the Great Recession. This boosted sales as buyers took advantage of the incentive, but the property market remained in recession until 2012.

The Trump campaign promises to make homeownership affordable for “families, young people and everyone,” but does not offer specific details. He mentions that the Republican Party will “support first-time buyers” and says it will reduce mortgage rates by “reducing” inflation.

However, experts say Trump’s overall economic agenda for a second term worsen inflationwhich fell last month to its lowest level in more than three years.

Agreed: Zoning and Federal Lands

Among the few things the two candidates agree on: relaxing zoning laws and using federal land to build homes.

Trump has pledged to tackle zoning and building regulations to speed up housing production, although his agenda doesn’t go into specifics.

Harris is proposing a $40 billion fund to incentivize local governments, which control zoning laws, to streamline their regulations to reduce the time it takes for builders to obtain permitting and complete projects. One caveat: State and local governments must show that they are building affordable housing.

Both candidates also said, albeit vaguely, that they supported making “limited portions” or “some” federal land available for home construction.

Harris’ plan references the Biden administration’s initiative in Las Vegas, where the Bureau of Land Management sold 20 acres at a deep discount to Clark County to build single-family homes that will ultimately be sold to those whose annual household income can reach $70,000.

Don Simpson, vice president of the Public Lands Foundation, said the laws were passed more than 20 years ago to give Nevada officials the ability to purchase federal land at a below-market rate for housing. affordable. Simpson said there are other small plots near places like Barstow, Calif., and Boise, Idaho, where this could be replicated in a limited way.

Nicholas Irwin, a professor at the University of Nevada, Las Vegas, said the 210 units would do little to fill the estimated shortage of 75,000 units Southern Nevada needs today.

“We are missing a lot of things. More federal land alone will not solve this problem,” Irwin said.