Some economists have cast doubt on Kamala Harris’s proposal to give $25,000 to first-time homebuyers and argue it amounts to government interference in the free market. Others question the Vice President’s plans to build three million homes across America and call for free-market solutions to the housing crisis.
Among the alternative proposals put forward is a scheme similar to that adopted in the UK known as shared equity. Under these schemes, housing associations and homebuyers purchase a home in partnership, with a low-interest rate loan for the individual. Housing associations are non-profit organizations that provide homes for those on low incomes. At present, they house around six million people in Britain.
Another idea is earning equity on a property by paying rent, known as a Real Estate Investment Trust. Under this proposal, investors and buyers would each own a share of the property, but the tenant purchases a piece of this equity with every rent payment.
In a new campaign ad from the Vice President, she pledged to construct three million houses through tax incentives for home builders who prioritize first-time buyers. Harris will also make $40 billion available for local governments to use on housing projects and “cut red tape and needless bureaucracy.”
David Burney of the Pratt Institute’s School of Architecture praised the plan, saying it is a step in the right direction. Raul Gastesi, a property attorney in Florida, disagrees, however, and said it would likely increase red tape rather than reduce it. Mr. Gastesi said a significant housing shortage, particularly in cities, is primarily caused by a lack of space to build outward, thanks to local zoning regulations.
Donald Trump’s housing plans include slashing regulations and opening up federal land for construction. These “zones” will be “ultra-low tax and ultra-low regulations,” Trump said. His idea to make more federal land accessible for building has also been floated by Joe Biden, who called for an assessment of land that “can be repurposed to build more affordable housing.”
The Republican candidate furthermore pledged to reduce housing costs by deporting illegal immigrants and barring them from obtaining mortgages.
