Vice President and leading Democratic presidential candidate, Kamala Harris, has recently unveiled her four-year plan to lower housing costs and boost homeownership for American households.
The US has been experiencing a housing affordability crisis stemming from two factors. First, the housing market is lacking supply as more sellers hang onto their houses amid high mortgage rates. Second, the demand for homes remains high, pushing prices higher amid a lack of inventory.
The affordability crisis has put housing as one of the top issue for voters in the 2024 presidential election, according to Gallup and Harvard surveys.
Last Friday, Harris unveiled parts of her plan with the aim of making homes in the country more affordable. The plan will build on proposals that were announced under the Biden administration. These include:
Down Payment Assistance for First-Time Homebuyers
Harris' three-section plan includes promises to provide up to $25,000 in down payment support for first-time home buyers. Specifically, the initiative will target working families who have "paid rent on time for two years and are in the market for a home." In addition, Harris' payment assistance will also offer "more generous support for first-generation homeowners," per the campaign fact sheet.
This proposal builds on a $25,000 downpayment assistance introduced by the Biden-Harris administration. However, that plan was only made available to 400,000 first-generation home buyers.
Furthermore, the proposal will provide a $10,000 tax credit for first-time home buyers.
Building Three Million New Housing Units
To resolve the lack of supply in the housing market, Harris is also calling for the construction of three million new housing units within four years. To boost this effort, her administration will offer tax incentives for homebuilders who build starter homes sold to first-time buyers.
The proposal also includes expanding on an existing tax incentive for businesses that build affordable rental units. No other details were provided for this initiative.
Additionally, should Harris win the presidential election, her administration will propose a $40 billion innovation fund to spur housing construction. This initiative will expand on the $20 billion proposed innovation fund under the Biden administration. The fund aims to empower local governments and builders to construct more housing that's affordable.
Lower Rent Costs
The plan also highlights two main proposals that aim to lower rent costs in the US. The first would block landlords from using an algorithm-driven price-setting tool to set rents. The second would remove tax benefits for investors who buy up single-family rental homes and mark up rents in bulk.
Apart from the two major initiatives, the plan would also expand rental assistance for veterans and hard-pressed Americans, enforce fair housing laws, and boost the housing supply for those without homes.
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