Do you think the housing crisis was addressed correctly last night by Trump and Biden?

Do you think the housing crisis was addressed correctly last night by Trump and Biden

Last night we witnessed the first presidential debate between Donald Trump and Joe Biden, and honestly, the outcome wasn’t a shocker. On one side, we have a former president who has significant experience as an entrepreneur but is also seen as a liar with a bad temperament and now facing felony charges. This last point might be political, but either way, it’s a hefty negative mark on his resume. If we were hiring someone, we wouldn’t dwell much on whether he was at fault; we’d probably just move on to the next candidate.

On the other side, we have Joe Biden, who frequently loses his train of thought. His presence doesn’t exactly scream “leader of a powerful nation,” and his health issues during his administration don’t help either. To me, Trump’s temperament and dishonesty are just as troubling as Biden’s difficulty in forming coherent sentences and maintaining focus.

 

But let’s talk about what really interests us: housing.

The Housing Crisis

Since February 2020, housing prices have skyrocketed by 45%. This spike is largely due to the pandemic, which led people to seek second homes in the suburbs or other areas, thanks to remote work opportunities and low-interest rates. Unfortunately, this demand surge fueled inflation, with housing being a major driver. The pandemic also halted new construction, further straining the housing supply. This makes homeownership—a key part of the American Dream—seem increasingly out of reach.

Biden’s Housing Plan

During the debate, Biden discussed his housing plan. Here’s a quick rundown:

  • Building and Renovating Homes: Aim to construct and renovate over 2 million homes to boost supply and lower costs.
  • First-Time Homebuyer Tax Credit: Provide a tax credit of up to $15,000 to help with down payments.
  • Zoning Reforms: Push for zoning reforms that encourage higher-density housing and reduce exclusionary practices.
  • Expanding Rental Assistance: Increase rental assistance programs and housing vouchers to support low-income families.

While these measures tackle essential aspects of the housing crisis, I worry that incentives and vouchers might raise prices by increasing demand without adequately addressing supply constraints. Building more homes and reforming zoning laws seem like the most effective strategies to me.

Trump’s Housing Approach

Trump, on the other hand, hasn’t laid out a specific housing plan. His strategy focuses on improving the economy, which he believes will naturally benefit the housing market. As a real estate professional, this lack of a detailed plan is concerning. But insights from Ben Carson, the former Secretary of Housing and Urban Development, suggest Trump would focus on deregulation. Carson mentioned that in Los Angeles, the cost to build a home is around $150,000, but regulatory and permit costs push this up to $600,000. Reducing these barriers could significantly alleviate the housing shortage.

Conclusion

Not having a housing plan is concerning to me. I have had the opportunity to attend political events locally with assembly candidates and council candidates, and it’s without a doubt one of the top two issues everyone talks about. So why would a presidential candidate not include this in his proposals? On the other hand, although I am not a federal official and may not have the macroeconomic insights on how this would play out, I believe half of Biden’s proposals will only result in higher prices. We know the people struggling the most to get into housing are low-income families and first-time home buyers. So giving incentives and vouchers to this population will only increase the barrier of entry for these groups, since everyone would be more incentivized to buy. Working on building and zoning is definitely what both candidates should be focusing on, and I hope it’s a subject we get to hear more about in the upcoming months.

 

What are your thoughts on this? I would love to hear from you!

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