Vice President Kamala Harris’ plan to make housing more affordable would in reality double down on policies that have caused skyrocketing home prices under the Biden administration.
Harris took to the debate stage Tuesday night touting her “plan” to solve the housing shortage. Her proposal, however brief, hits on some key points that have the potential to drive up housing prices exponentially:
Vice President Harris has put forward a comprehensive plan to build three million more rental units and homes that are affordable to end the national housing supply crisis in her first term. And she will cut red tape to make sure we build more housing faster and penalize firms that hoard available homes to drive up prices for local homebuyers. Vice President Harris knows rent is too high and will sign legislation to outlaw new forms of price fixing by corporate landlords.
As more new homes are built and affordable housing supply increases, Vice President Harris will provide first-time homebuyers with up to $25,000 to help with their down payments, with more generous support for first-generation homeowners.
Harris’ platform promises to exacerbate those prohibitive conditions she and Biden caused for future generations of would-be homeowners, making it nearly impossible for many young Americans to start buying homes, a key cultural milestone that serves as part of the foundation to raising a family. Instead, Harris’ plan would more likely keep Americans shacked up in apartments until much later in life.
“The worse this gets, the more we are essentially attaching a penalty to people who are investing in themselves, investing in their financial future, investing in their family, and investing in intergenerational wealth, and all of this is creating a world of haves and have-nots,” EJ Antoni, research fellow and public finance economist at the Heritage Foundation, told The Federalist in an interview. “It is making real what the World Economic Forum said quite a while ago, ‘You will own nothing and be happy.’”
As for the $25,000 plan, there is no indication as to how that will be paid for, but Antoni likened it to student loans and financial aid plans, another massive government giveaway, purportedly intended to help students with financial struggles, but which ultimately saw colleges and universities drive up their tuition costs knowing taxpayers would be there to foot the bill.
Antoni said that the situation with mortgages is “even worse” than with financial aid because the $25,000 will not go toward the overall price, but rather a down payment (usually around 20 percent of the total price) meaning sellers could respond by jacking up the price.
It is also unclear if the down payment assistance will be reserved only for Americans. As Sen. J.D. Vance (R-Ohio) noted that Harris’s plan could “leave open the door for millions of illegal immigrants to get this assistance.”
Vance also noted that the presence millions of aliens drives housing demand through the roof in a supply-limited environment.
The economic conditions created under the Biden-Harris administration have brought skyrocketing mortgage rates and rental premiums.
At a Senate Banking, Housing, and Urban Affairs Committee hearing in April, ranking member Sen. Tim Scott (R-S.C.) questioned the Harris-Biden Department of Housing and Urban Development’s rent control mandates, noting that the net effect is lowering the amount of housing supply and driving up prices.
“Despite empty promises from the White House about helping working families, the simple fact is that housing costs under President Biden and Vice President Harris have skyrocketed,” Scott told The Federalist. “From reckless spending to progressive proposals like rent controls and costly ‘green climate’ goals, the Biden-Harris administration has been more focused on appeasing the far-Left than lowering costs for working families. America has a housing crisis – and the blame rests squarely on President Biden and Vice President Harris.”
The climate alarmism proposals from HUD are also detrimental to housing affordability, as the federal government seeks to impose energy efficiency standards on new buildings and homes. According to the National Association of Home Builders, the efficiency standards cost homeowners as much as an additional $31,000, which the group says could take as long as 90 years to see return on the investment.
“At the same time a family is facing doubling and sometimes tripling food costs, in order to meet ‘green climate’ goals, this administration saddles them with an extra $31,000 of additional expenses for a single home,” Scott said in April.
In addition to the climate proposals, the interest rate roller coaster imposed by the Federal Reserve made it easier for massive hedge funds, like BlackRock, to do exactly the kind of hoarding of single-family homes Harris now claims to want to penalize.
BlackRock and other firms, with the help of federal money, are notorious for buying up as many single-family homes as they can and paying outrageously more than the asking price to out-bid normal Americans looking to settle their families in a home.
The Federal Reserve created the conditions that allowed them to have such a competitive advantage over would-be homeowners.
“It was the fact that you never had interest rates that low before, you never had that much liquidity sloshing around in the market before,” Antoni said. “It was not a matter of people trying to do this for the first time, it was simply a matter of it was never financially viable to do it before, but when the Federal Reserve made money so insanely cheap that’s really what allowed people to do this.”
The Federal Reserve imposed extremely low interest rates followed by skyrocketed rates in order to respond to massive federal spending since 2021, two bills for which Harris was the tie-breaking vote in the Senate to ram through for Biden’s signature: The American Rescue Plan and the Inflation Reduction Act.
“Harris literally owns half of the inflation that we face today, and even for the other half, she was the administration’s arguably the administration’s biggest cheerleader for all of that spending as well,” Antoni said.
While the higher interest rates have somewhat staved off more purchasing from BlackRock, it also left Americans looking to buy homes in the dust because houses enter the market at an exorbitantly high price as sellers try to compensate for the interest rates on their own next home purchase.
“If you’re going to sell a home and lose your existing 2 or 3 percent mortgage and get a new one that’s much higher — 3 or 4 percent higher — you now have to sell your home for an insane premium so that you can take out a ton of equity and put a much bigger down payment on the next house, so that you don’t have to borrow as much because the interest rate is so high that you won’t be able to afford the monthly mortgage payment,” Antoni explained.
Breccan F. Thies is an elections correspondent for The Federalist. He previously covered education and culture issues for the Washington Examiner and Breitbart News. He holds a degree from the University of Virginia and is a 2022 Claremont Institute Publius Fellow. You can follow him on X: @BreccanFThies.
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