Trump and Harris Reveal Their Game Plans to Tackle Skyrocketing Housing Prices – Here's What Has Worked Before and What Might Now

Inflation has everyone talking, and the soaring housing cost is at the center of the conversation. It's not just a hot headline topic – Kamala Harris and Donald Trump have made it a major point in their 2024 presidential campaigns. Both Harris and Trump say they've got solutions, but not all ideas will hit the mark.

Harris, for example, is proposing direct help for first-time homebuyers. She wants to provide up to $25,000 in down-payment assistance, plus a $10,000 tax credit. However, there's a catch: whenever you throw money into a competitive housing market, it can drive prices up even further. 

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Experts who spoke to ABC cited past programs in which the government helped push prices higher, benefiting sellers more than buyers.

Carla Krolage, an economist, highlighted a similar situation in Bavaria, Germany. A subsidy program there led to a price jump of about 10,000 euros per home. Harris's plan could have a similar effect, with home prices climbing rather than falling. Ed Pinto from the American Enterprise Institute voiced concerns that the $25,000 grant might raise home costs across the board, defeating the purpose of the assistance.

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Still, Harris's focus on affordability and supply hasn't been seen in decades. David Dworkin of the National Housing Conference noted that her campaign's comprehensive housing plan is a sign that the crisis is being taken seriously. He also dismissed fears of skyrocketing prices, saying that combining down-payment assistance with investments in housing supply could avoid inflation.

Harris is also pushing for tax incentives for builders, which she believes will add three million new homes to the market. These incentives target starter homes and affordable rental units. 

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Such measures aren't entirely new; there's already a tax credit for developers under the Low-Income Housing Tax Credit (LIHTC), which has existed since 1986. While helpful, past reports show the program has become less efficient over time, producing fewer homes at a greater cost.

Trump, on the other hand, has a different approach. He wants to ban undocumented immigrants from getting mortgages, a move he says would cool the housing market. While home loans for undocumented immigrants are rare, Trump's proposal could also affect construction workers. 

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With nearly 20% of U.S. construction labor made up of immigrants, many of whom are undocumented, restricting this workforce could lead to labor shortages and higher building costs. That would make meeting the country's growing housing demand even harder.

Another Trump plan involves loosening zoning laws, which he blames for slowing down construction and inflating costs. He argues that environmental regulations and complex permitting processes are holding builders back.

 It's true that some cities, like Minneapolis, have already made moves to end single-family zoning to create more housing, but local resistance remains a challenge. Homeowners often push back on plans for denser, more affordable developments, wanting to protect their property values.

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