Kamala Harris' $25K Housing Assistance Plan: Zillow's Chief Economist Calls It A 'Band-Aid Fix'

Kamala Harris's $25,000 down payment assistance plan is making waves, but not everyone's impressed. Zillow's Chief Economist, Skylar Olsen, has some sharp critiques. While Harris's proposal aims to make homeownership more accessible, Olsen calls it a “Band-Aid fix” for a much deeper problem.

On the surface, giving first-time homebuyers a financial boost sounds like a win. Who wouldn't want $25K to help buy a house? But according to Olsen, it's not that simple. The real issue isn't just helping people afford homes – there aren't enough homes. "The demand side doesn't help over the long run," Olsen told Business Insider recently. Sure, more people can buy homes with the extra cash, but what happens when there aren't enough homes for sale? Prices go up, and the housing crisis gets worse.

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Olsen thinks Harris's plan is well-meaning but misses the bigger picture. The lack of housing supply is the root of the problem, not just affordability. Without addressing this, offering down payment assistance fuels more demand, pushing prices even higher. It's like adding more fuel to a fire instead of putting it out.

One of Olsen’s big concerns is that this federal policy is too broad. It doesn’t account for the different housing markets across the country. Some places have more houses than they know what to do with, while others have none. A blanket federal plan doesn't solve this imbalance. A more targeted, local approach could help where it's needed most. For example, a state with many underused homes might benefit from a demand-side push. But nationally? It's a recipe for disaster.

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Olsen also pointed out that helping first-time homebuyers might not help the people who need it most. Not everyone is starting from the same place. Some first-time buyers might have a strong financial network, like parents who can chip in, while others don't have that luxury. Harris's plan does mention more generous aid for first-generation homeowners, which Olsen agrees is a better approach, but the details are still vague.

The bottom line? According to Olsen, the real solution is to increase the housing supply, not just help more people buy. "It can end up just getting us revved up without solving the long-run problem," Olsen said. Harris has some policies addressing supply, but it's clear that, in Olsen's eyes, they need to be the focus if we're ever going to solve the housing crisis.

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