Housing has played a prominent role in the 2024 presidential election as a shortfall of new home production drove sale prices to record highs this year. Vice President Kamala Harris and former President Donald Trump have offered some dramatically different proposals to address the issue.
Two differing approaches sparking more discussion are a call by Harris, the Democratic nominee, for $25,000 in down payment assistance for first-time homebuyers and a promise by Trump, the Republican nominee, to deport people who are in the U.S. illegally in an attempt to free up housing and moderate prices.
The candidates agree on some things, at least in principle: Both say tax incentives should be used to help people buy homes and barriers need to be reduced for homebuilders to help combat an estimated housing shortage of between 1.5 million and 5.5 million units.
Some of the candidates’ ideas would require approval from Congress, a difficult task even if both political parties agree there is a housing crisis. While Harris has a goal of building 3 million new housing units in a four-year term, skeptics question how much influence she or Trump can have on the market. After all, housing policy historically has been shaped at the city, town or county government level, not in Washington, D.C.
But with mortgage rates stuck at around 6% despite some recent improvements and home prices remaining near record highs, the pressure is on to make something happen. Below is an overview of the candidates’ initial housing proposals.
Taxes
When it comes to tax incentives, Harris has put forth more details while Trump's plans are conceptual. The Harris plan for $25,000 in down payment aid has drawn challenges from critics who say it will drive up prices by creating a wave of new demand for homes without a corresponding increase in supply. The program could help 4 million households buy homes in four years, according to Harris’ policy proposal.
“It’s just like throwing gas on a fire. You’re going to reignite the housing market because you’re giving out free money that’s going to allow people to bid up prices again,” Ken Johnson, a real estate professor at the University of Mississippi, said in an interview about the Harris plan.
Housing researchers Edward Pinto and Tobias Peter at the American Enterprise Institute, a public policy think tank, have a similar take, writing recently that it’s better to encourage people to save money for a down payment without federal aid even if it takes much longer to buy a home.
Others say the potential negative impact of the assistance on prices is overstated. First-time buyers make up only a third of the market, and that share will decrease along with mortgage rates, according to the National Housing Conference, a nonprofit advocacy group.
There is a precedent for Harris’ proposal: the $7,500 tax credit for first-time buyers initiated in 2008 under President George W. Bush and later increased to $8,000 during the Obama administration. The program helped more than 2.5 million families buy homes during the depths of the Great Recession from April 2008 to April 2010, according to Obama’s archives website. Some states and localities have similar programs to help buyers with closing costs, including Florida’s Hometown Heroes loan program.
Trump would “promote homeownership through tax incentives and support for first-time buyers,” his platform states, but an exact plan of action was not disclosed. He might do this either through tax deductions for mortgage interest and mortgage insurance or with tax credits, according to the Bipartisan Policy Center’s analysis of the candidates’ plans.
Harris also supports legislation to expand the low-income housing tax credit that has been one of the largest sources to build affordable apartments in the U.S. since it was signed into law in 1986.
If the draft law were to pass Congress as written, it could fund 2 million new rentals, said Emily Cadik, CEO of the Affordable Housing Tax Credit Coalition, in an interview. She added that it’s more likely up to 200,000 homes would be funded as part of a larger tax bill; one such bill failed to pass earlier this year despite bipartisan support. Another opportunity may arise next year, when Congress is likely to review the tax cuts passed during Trump’s presidency in 2017.
In addition, Harris is calling for a tax break for builders who construct homes priced to be affordable for first-time buyers, and another tax incentive to build or renovate owner-occupied homes in distressed neighborhoods.
The National Association of Home Builders praised Harris’ focus on boosting housing production in a statement in August, but cautioned that tax incentives for constructing homes priced for first-time buyers need to be “targeted to local market conditions and be widely available.”
Reining in investors
Harris is vocal in her platform about her desire to rein in large investors who have bought up a large number of single-family homes across the U.S. to rent out. Trump doesn’t mention the issue in his platform, but his running mate, J.D. Vance, has made statements during his first two years as a U.S. senator from Ohio about how these investors have reduced purchase options for some potential buyers.
To discourage this practice, Harris supports a bill in Congress to block investors who own more than 50 single-family rental houses from deducting interest or depreciation on them.
The University of Mississippi’s Johnson argued in an interview that the proposal could prove counterproductive. He said large investors entered the market during and after the Great Recession in response to a housing shortage at that time, and their homebuying in a number of cities has helped stabilize prices.
“The legislation would just force bigger Wall Street players into the market because the mom-and-pops would be truly gone,” he said. “I know several people that own well more than 50 properties. That policy would only make it more difficult for that smaller investor to stay in the market.”
Harris also backs legislation to curb corporate landlords’ use of software to help them set rents. She claims landlords use these tools to price fix, leading to unfair rent increases for many tenants during the pandemic.
Cutting red tape
Both candidates say they want to use federal authority or guidance to break the logjam at the local level that tamps down housing construction. This might take the form of streamlining the process for developing near transit stations, for instance, or making it easier to convert empty office buildings to residential use. Reforming local zoning codes that limit where housing can be built is another possible route, something a number of state governments have tried to do in recent years.
Harris has proposed a $40 billion “innovation” fund that state and local governments and developers could tap into to target the affordable housing shortage. She would make the grants conditional upon recipients showing they can deliver results. As examples, she points to how some counties used money from the 2021 American Rescue Plan Act to build or preserve affordable homes. Governments or builders might use funds for innovative construction techniques that lower costs, for example.
The Bipartisan Policy Center noted in its analysis that Trump prioritized easing sustainability-focused, environmental and other permitting rules as president from 2017 to 2020. Trump’s platform states he would “cut unnecessary regulations that raise housing costs.”
Trump's efforts to eliminate environmental rules have drawn protests and criticism from opponents and environmentalists in the past. If the candidates want to influence how city and town governments implement zoning that controls where housing can be built, they’ll need to first have a good understanding of what zoning codes say, according to Sara Bronin, who founded the National Zoning Atlas, a public repository of zoning rules. She also authored the book, “Key to the City: How Zoning Shapes Our World.”
“Cumulatively, zoning codes adopted by perhaps 30,000 local governments around the country have significant effects on the national economy, our housing markets, and our ability to respond to climate change,” Bronin said in an email.
Immigration
Trump says that immigrants who are in the U.S. illegally have had a significant impact on housing supply and prices, and deporting them would make a substantial number of homes available, although the reality is not nearly so black and white.
After his early-October vice presidential debate with Harris' running mate Minnesota Gov. Tim Walz, J.D. Vance cited studies in a post on the social media site X to support Trump’s position that illegal immigrants drive up housing costs. He pointed to a recent statement by Michelle Bowman, a member of the Federal Reserve’s Board of Governors, that “given the current low inventory of affordable housing, the inflow of new immigrants to some geographic areas could result in upward pressure on rents.”
Ernie Tedeschi, a former Biden administration adviser and an economist, stated in an X post of his own that immigrants also bring benefits to the housing market.
“The dynamics of immigration and housing are complex. Yes, immigrants demand housing. They also provide construction labor. And natives often leave, putting downward pressure on prices,” he wrote.
The sudden loss of a large number of immigrants who work in construction could actually cause an increase in prices by reducing the housing supply, according to Cato Institute scholar Alex Nowrasteh. Even without Trump’s hypothetical mass deportation, the U.S. faces a shortage of some 500,000 construction workers, a builders organization estimates.
Building on federal land
Encouraging developers to build housing on federally owned lands has drawn interest from both candidates, though.
Democrats and Republicans have introduced separate legislation to create a process for the U.S. Bureau of Land Management and U.S. Forest Service to make certain public lands available for development. The White House announced plans in July to sell hundreds of acres of public land in Nevada.
Those plans could lead to the development of more than 15,000 affordable housing units in Southern Nevada.
Nevada leads all U.S. states in federal government-owned land. About 84.3% of land in Nevada is owned by the federal government, including 67.1% owned by the BLM, according to the independent nonprofit research group Headwaters Economics.