Trump, Harris housing policies emerging from the rhetoric

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With less than a month to go until the Nov. 5 election, voters are starting to get a clearer picture of where the candidates in the 2024 presidential race stand on housing issues — although sifting through the rhetoric for the details of actual policies can be a challenge.

Housing policy got short shrift in the Sept. 10 debate between candidates Donald Trump and Kamala Harris, with Harris touching only briefly on a couple of her housing proposals, and Trump providing no insight on his.

Just one example of how the housing discussion often went off the rails: When Harris invited Trump to “talk about our plans” — including her proposal to provide $25,000 in down payment assistance to first-time homebuyers — Trump responded with three assertions that fact-checkers deemed false.

“She is destroying our country,” Trump said. “She has a plan to defund the police. She has a plan to confiscate everybody’s gun. She has a plan to not allow fracking in Pennsylvania or anywhere else. That’s what her plan is until just recently.”

Harris was also taken to task by fact checkers for some of her assertions — including a claim that “Donald Trump left us the worst unemployment since the Great Depression.”

As PolitiFact noted, unemployment soared to 14.8 percent at the outset of the pandemic. But by the time Trump left office, unemployment had fallen to 6.4 percent.

With economists at Fannie Mae predicting 2024 might be the worst year for home sales since 1995, anyone who tuned in to last month’s debate hoping to hear how the next president plans to turn things around might have been disappointed.

National Association of Home Builders executives Jim Tobin and Paul Lopez devoted the trade group’s weekly podcast to the subject, “Why Was Housing Not at the Forefront of the Presidential Debate?”

Tobin, for one, blamed the lack of substantive discussion on the moderators.

“I’m completely disappointed in the lack of a real policy discussion,” Tobin said. “Certainly, going into this, we were fully expecting housing to at least be one of the main questions. Turns out that the moderators didn’t want to go down that road for some reason. So that was really, really frustrating.”

Vice presidential candidates tackle housing

But the Oct. 1 faceoff between the candidates’ vice presidential running mates — Democrat Tim Walz and Republican J.D. Vance — was widely praised as more substantive. Thanks in part to prompts from CBS News moderator Margaret Brennan, both candidates managed to at least dip their toes into housing policy.

Walz talked up the Harris campaign’s promise to provide tax incentives and government funding with the goal of helping build 3 million homes.

Vance stayed focused on Trump’s claims that inflation and illegal immigration are driving up home prices, and that federal lands could provide cheap land for new housing.

In broad terms, the Harris campaign’s housing platform sees a lack of housing supply as the main problem, and government as the solution, promising “the most significant effort to expand housing supply since World War II.”

Harris and Walz have also cast “large corporate landlords” and “Wall Street investors” as villains, claiming algorithmic price fixing is driving up rents, and that institutional investors are making single-family homes more scarce by buying them up in bulk.

Trump’s platform and campaign rhetoric portray inflation, burdensome regulations, and demand from illegal immigrants as drivers of America’s housing woes — and points the finger of blame for all of those issues at the Biden administration.

Apart from a crackdown on illegal immigrants — if reelected, he has promised to “carry out the largest deportation operation in American history” — Trump’s solutions for housing largely consist of getting the government out of the way.

Although not mentioned in his platform or during either debate, during his first term in office Trump initiated the process of privatizing Fannie Mae and Freddie Mac. The mortgage giants have been seen by Democrats as vital in achieving affordable and equitable housing goals — particularly since they were placed in government conservatorship in 2008.

While former Trump administration officials are once again reportedly formulating plans to remove Fannie and Freddie from government conservatorship, that was seen as too wonky of a subject to delve into during the Oct. 1 vice presidential debate.

Nor was there a discussion of federal policy and legislative issues that are top concerns for housing industry groups like the National Association of Realtors (NAR), the Mortgage Bankers Association (MBA) and the National Association of Home Builders (NAHB).

For housing industry groups, those issues include increasing the capital gains tax exclusion for homeowners who sell their homes for a profit, reducing capital requirements for nonbank mortgage lenders, and converting the mortgage interest deduction to a tax credit.

Housing supply and demand

With candidates at the vice presidential debate asked to address a range of issues in addition to housing, viewers mostly got the CliffsNotes versions of policies outlined by the Trump and Harris campaigns.

Asked by CBS News moderator Brennan where homes might be built on federal land, Vance couldn’t say for sure.

“Well, what Donald Trump has said is we have a lot of federal lands that aren’t being used for anything,” Vance said. “They’re not being used for national parks. They’re not being used. And they could be places where we build a lot of housing.”

“We have a lot of Americans that need homes. We should be kicking out illegal immigrants who are competing for those homes, and we should be building more homes for the American citizens who deserve to be here,” Vance concluded.

Walz made light of the idea, saying federal lands are “there for a reason” and should be protected. “They belong to all of us.”

“When you view housing, and you view [federal lands] as commodities — like, ‘There’s a chance to make money here; let’s take this federal land and let’s sell it to people for that.’ I think there’s better ways to do this,” such as refurbishing existing housing stocks.

Brennan asked Walz whether Harris’ plan to provide $25,000 in down payment assistance to first-time homebuyers might do more harm than good.

“Won’t handing out that kind of money just drive prices higher?” Brennan asked — an assertion also made by the conservative-leaning American Enterprise Institute in an analysis released shortly after the debate.

Walz answered the question in a roundabout way, arguing that the solution to housing affordability is to build more housing by cutting red tape at the local level and providing tax credits and funding.

Pace of home construction 1991-2024

The pace of construction of privately-owned housing units dipped below 1.2 million a year during the Great Recession of 2007-09, and took nearly a decade to rebound. Source: U.S. Census Bureau and U.S. Department of Housing and Urban Development via FRED, Federal Reserve Bank of St. Louis

The Minnesota governor pointed to a program in Minneapolis that provides low-income homebuyers with up to $20,000 in down payment assistance in the form of a zero-interest, 30-year deferred mortgage.

“We get it back from people, because here’s what we know,” Walz said. “People with stable housing end up with stable jobs. People with stable housing have their kids able to get to school. All of those things, in the long run, end up saving our money. And that’s the thing that I think we should be able to find some common ground in.”

Last month, the Urban Institute published a proposal for a comprehensive national housing strategy that noted growth in households of color with less access to generational wealth point to “an increased need for starter homes and down payment assistance.”

Homebuyers in any state can find programs that provide down-payment assistance using services like Down Payment Resource, which makes information available about programs and eligibility requirements through sites such as Zillow and Redfin, as well as through integrations with multiple listing services (MLSs), lenders and agents.

In a 2021 analysis, Urban Institute researchers Michael Stegman and Mike Loftin noted that down payment assistance (DPA) has become “an integral part of the post–Great Recession business model” for state housing finance agencies (HFAs).

In 2019, “nearly three-quarters of the single-family mortgages HFAs funded carried DPA, with the typical agency financing nearly 3,000 loans each carrying about $7,200 in DPA,” their analysis noted.

However, the Urban Institute researchers warned, “It will not be easy to find sufficient revenues to expand DPA at a level that would meaningfully reduce the racial homeownership gap.”

The Harris campaign says it will raise revenues for all of its programs, not just housing, by increasing the corporate tax rate to 28 percent and undoing “huge tax breaks for the very wealthy” granted in the 2017 overhaul of the tax code signed into law by Trump.

The nonpartisan, research-based Penn Wharton Budget Model (PWBM) projects that across the board, the Harris campaign’s tax and spending proposals would grow the national deficit by $1.2 trillion over the next 10 years.

But PWBM projects that policies outlined by the Trump campaign would increase the deficit by $5.8 trillion over the same period, due to a protracted drop in tax revenue.

Immigration claims

Walz took a jab at claims by Trump and Vance — who have faced criticism (and a lawsuit) for spreading unsubstantiated rumors that Haitian migrants in Springfield, Ohio, were eating pets — that immigrants are to blame for rising home prices.

“We can’t blame immigrants for the only reason [home prices are rising] … that’s not the case,” Walz said. “That’s happening in many cities. The fact of the matter is we don’t have enough naturally affordable housing, but we can make sure that the government’s there to help kickstart it, create that base.”

Many of the Haitians who have moved to Ohio and other parts of the country are in the U.S. legally, and real estate industry groups including NAR and the National Association of Hispanic Real Estate Professionals (NAHREP) view legal immigration as a healthy driver of growth.

Vance has disputed that Haitians who have been granted Temporary Protected Status to live in the U.S. are here legally. But he said he’s not opposed to legal immigration — and blamed Harris for a surge in illegal immigration.

“We don’t want to blame immigrants for higher housing prices,” Vance said. “But we do want to blame Kamala Harris for letting in millions of illegal aliens into this county, which does drive up costs, Tim. Twenty-five million illegal aliens competing with Americans for scarce homes is one of the most significant drivers of home prices in the country.”

According to the nonpartisan Pew Research Center, there were an estimated 11 million unauthorized immigrants living in the U.S. in 2022, down from 12.2 million in 2007.

Although Pew researchers also recognize that attempts to enter the country illegally surged last year — the 249,741 Border Patrol apprehensions in December were the most ever recorded in a single month — such “encounters” have dropped by 77 percent, to 58,038 in August.

Walz pushed back on the claim that Harris is to blame for illegal immigration, noting her support for what he characterized as “the fairest and the toughest bill on immigration that this nation’s seen” — a reference to the bipartisan border agreement negotiated by Republican Sen. James Lankford of Oklahoma that was scuttled after Trump came out against it.

“I know him,” Walz said of Lankford. “He’s super conservative, but he’s a man of principle, wants to get it done.”

Research by the nonpartisan Congressional Budget Office (CBO) and Harvard University’s Joint Center for Housing Studies (JCHS) does support the premise that immigration — both legal and illegal — contributes to demand for housing.

Immigration boosts US population growth

But according to Pew’s research, 77 percent of the 48 million U.S. residents who were born in another country are here legally. As of 2022, 49 percent were naturalized U.S. citizens, 24 percent were lawful permanent residents and 4 percent were legal temporary residents. “Unauthorized immigrants” constituted an estimated 23 percent of the U.S. foreign-born population.

Vance promised after the debate he would share “a Federal Reserve study” that he said “really drills down on the connection between increased levels of migration, especially illegal immigration, and higher housing prices.”

But what Vance ended up posting on the social media platform X were brief remarks by Federal Reserve Governor Michelle Bowman about the potential for immigration — she did not specify whether legal, illegal or both — could impact rents.

“Given the current low inventory of affordable housing, the inflow of new immigrants to some geographic areas could result in upward pressure on rents, as additional housing supply may take time to materialize,” Bowman said in remarks she delivered in May at the annual convention of the Massachusetts Bankers Association.

Inflation as a driver of housing costs

Inflation is another hot-button issue with voters. The Federal Reserve’s efforts to head off a recession during the pandemic by buying up mortgage bonds and government debt and slashing short-term interest rates to zero helped bring mortgage rates to historic lows — fueling demand for housing and sending prices climbing.

Affordability challenges got even worse when the Fed started raising rates to combat inflation to the highest level in more than 20 years, sending mortgage rates climbing back up over 7 percent. With inflation descending toward the Fed’s 2 percent goal, mortgage rates have retreated closer to 6 percent.

But Vance said that following Trump’s call to “Drill, baby drill” for domestic oil could help bring down housing prices — claiming that assuming the cost of energy is “one of the biggest drivers of housing costs, aside from illegal immigration.”

“Think about it: If a truck driver is paying 40 percent more for diesel, then the lumber he’s delivering to the job site to build the house is also going to become a lot more expensive,” Vance asserted. “If we open up American energy, you will get immediate pricing relief for American citizens not just in housing, but in a whole host of other economic goods, too.”

According to the National Association of Homebuilders (NAHB), a four-fold spike in the cost of lumber in 2021 added more than $30,000 to the price of an average single-family home, and the cost of building materials remains 38 percent higher since the pandemic.

But in releasing a 10-point plan in May to ease the housing affordability crisis, NAHB blamed faulty supply chains and called on federal policymakers to end tariffs on Canadian lumber shipments and building materials from China.

Trump has proposed a 60 percent tariff on Chinese imports and a universal tariff of 20 percent on goods coming from everywhere else. The Tax Foundation, a nonprofit think tank that advocates tax policies that promote economic growth, has criticized Trump’s proposed tariffs as a “narrowly targeted consumption tax” that would bring tariff rates to levels not seen since the Great Depression.

A deeper dive into housing policy

While the presidential and vice presidential debates didn’t get deep into the weeds on housing policy, the Harris campaign’s 82-page platform devotes 10 pages to housing.

To expand housing supply, the Harris platform proposes to:

• Expand the existing Low-Income Housing Tax Credit (LIHTC) to provide developers the incentive to build 1.2 million rental homes
• Create a new “Neighborhood Homes Tax Credit” to support the construction or rehabilitation of more than 400,000 owner-occupied homes in lower-income communities.
• Create a tax incentive that rewards builders who construct affordable homes for first-time homebuyers
• Provide $40 billion to state and local governments and private developers and homebuilders through a “results-driven” innovation fund

In addition to expanding housing supply, the Harris campaign is backing legislation targeting corporate landlords and single-family home investors.

“Large corporate landlords have increasingly used private equity–backed price-setting tools to dramatically raise rents in communities across the country,” the Harris campaign alleges in urging passage of legislation that would make “algorithmic price fixing” illegal under antitrust law.

The Harris platform also targets large institutional investors “who have bought thousands of single-family homes during recent downturns,” calling on Congress to remove tax breaks for corporate investors that buy properties in bulk by passing the Stop Predatory Investing Act.

Trump’s platform — and Project 2025

The Republican Party’s 16-page platform summarizes the campaign’s housing goals in a single sentence:

“To help new home buyers, Republicans will reduce mortgage rates by slashing inflation, open limited portions of federal lands to allow for new home construction, promote homeownership through tax incentives and support for first-time buyers, and cut unnecessary regulations that raise housing costs.”

For more detailed insights into what some of Trump’s supporters would like to see him do if reelected, the Heritage Foundation and an advisory board of more than 100 conservative organizations have put together Project 2025, a 922-page policy document they hope the next Republican president will embrace.

Although Trump has distanced himself from Project 2025 — in his debate with Harris, he claimed not to have read it, and has called some of the ideas it lays out “abysmal” — its authors include officials from his first administration, including former Office of Management and Budget Director Russ Vought and Chris Miller, who Trump appointed as acting defense secretary six days after the Nov. 9, 2020, election.

The chapter outlining Project 2025’s approach to the Department of Housing and Urban Development (HUD) was authored by Ben Carson, who served as Trump’s Secretary of Housing from 2017 to 2021. It calls for a “reset” of HUD, “to include a broad reversal of the Biden Administration’s persistent implementation of corrosive progressive ideologies across the department’s programs.”

Carson advocates putting an end to HUD’s efforts under the Biden administration to address climate change issues and combat appraisal bias, for instance, and initiating a HUD task force “consisting of politically appointed personnel to identify and reverse all actions taken by the Biden Administration to advance progressive ideology.”

[Climate change is seen by Fannie Mae and Freddie Mac’s federal regulator, the Federal Housing Finance Agency (FHFA), as “an emerging and increasing threat to U.S. financial stability.” Climate change “poses a serious threat to the U.S. housing finance system,” FHFA Director Sandra Thompson said in 2022, and Fannie and Freddie “have an important leadership role to play in addressing this issue.”]

More broadly, Carson proposes raising mortgage insurance premiums on FHA loans, and eliminating the Biden administration’s Housing Supply Fund, aimed at providing grants to state and local governments to build more affordable housing.

“Housing supply does remain a problem in the U.S., but constructing more units at the low end of the market will not solve the problem,” Carson wrote in his Project 2025 chapter. “Investors and developers can deliver at more efficient cost new units that will allow for greater upward mobility of rental and ownership housing stock and better target increased construction of mid-tier rental units.”

Similarly, Project 2025’s plans for the Treasury Department are grounded in the assumption that under the Biden administration, there’s been a “drift into a ‘woke’ agenda.”

“Under the leadership of Treasury Secretary Janet Yellen, the department has made ‘equity’ and ‘climate change’ among its top five priorities,” Project 2025 authors William “Bill” Walton (a private equity investor), Stephen Moore (an economist) and David R. Burton (a lawyer) complain.

Walton, the founder and chairman of private equity firm Rappahannock Ventures LLC, served on Trump’s 2016 transition team as co-head of economic issues for federal agencies.

As chairman, president and chief executive officer of Allied Capital Corp., Walton famously tangled with short seller David Einhorn and in 2007 settled a four-year investigation by the Securities and Exchange Commission into Allied’s valuation practices without admitting to or denying agency allegations, The New York Times reported.

“Regulators possess a great deal of unilateral and, too often, arbitrary power,” Walton told Bloomberg when he was named to Trump’s transition team. “So in addition to Mr. Trump’s call to reduce the number of regulations, I believe we need to rethink how the regulatory process should work.”

Project 2025 advocates that the Treasury Department wind down Fannie Mae and Freddie Mac “in an orderly manner” and move toward “privatization of these massive housing finance agencies. This would restore a sustainable housing finance market with a robust private mortgage market that does not rely on explicit or implicit taxpayer guarantees.”

Harris claimed at a campaign in August that privatizing Fannie Mae and Freddie Mac could add $1,200 a year in additional interest costs to the typical American mortgage.

Experts consulted by PolitiFact said that “although privatization would likely affect mortgages, it’s difficult to parse out with certainty how profound the changes would be.”

The Harris campaign told PolitiFact that the $1,200-a-year estimate was based on a 2015 analysis by Moody’s Analytics and The Urban Institute.

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