America’s housing crisis is one of the critical issues of this year’s presidential campaign — but plans unveiled by Vice President Kamala Harris to reduce rent costs and boost home ownership would only further inflate prices for our most vulnerable.
Millions of Americans are undeniably desperate for relief. In New York City, for example, rent grew seven times faster than wages last year, and it is showing little signs of falling, with newly-released July data demonstrating that rent prices in the Northeast are still increasing.
Harris did acknowledge that government needs to make it easier for developers to build new apartment units, which is true. Zoning laws and other building restrictions are perhaps the most significant cause of the current housing affordability crisis, studies show.
These limitations on housing construction have reduced supply, increasing the demand for existing rental units tremendously and inflating costs. Addressing these construction roadblocks is where government action is most urgently required.
Instead, however, the Harris housing plan focuses on creating new regulations that would derail this much-needed building surge from ever occurring — and adding subsidies that would only inflate housing costs.
On Wednesday, Harris displayed her economic illiteracy on this score. “My administration will provide first-time homebuyers with $25,000 to help with the down payment on a new home,” she promised in a post on X.
Elon Musk, among others, tried to set her straight: “Unless you increase the supply of new homes, this just raises the price by $25k,” he retorted.
Harris claimed that a federal rent cap, another of her housing proposals, would get prices down quicker, and that she would seek to ban algorithms and software that landlords use to help determine their asking prices — just another way of implementing the price control she desires.
This month the Harris-Biden administration’s Department of Justice even filed a lawsuit against this algorithmic technology. Never mind that the government itself uses similar software.
Meanwhile, New York City’s current experience with a rent cap demonstrates just how damaging Harris’ rent control proposal would be for America’s working class.
Over the last half decade, the city’s price cap has drastically inflated the cost of non-rent-controlled apartments, reduced housing quality and created more government wealth transfers to wealthy residents at the minority communities’ expense, according to the Manhattan Institute.
As liberal economist Paul Krugman put it years ago, 93% of economists don’t support rent control — and for good reason.
“Nothing brings out unity in economists and land use scholars like the folly of rent control,” Krugman wrote, because both Democratic and Republican experts understand such policies only lead to higher rents on uncontrolled apartments, giving “desperate renters nowhere to go because new apartment construction becomes virtually nonexistent.”
So, it’s safe to predict that more construction won’t happen if the federal government implements a price control or bans landlords’ pricing software.
What will happen, though, is a spike in income inequality.
Again, New York serves as an illustrative example: The only people who seem to benefit from New York City’s current rent control policy (sans the few working-class families that have lucked into a hard-to-find rent-controlled apartment) are the well-connected professionals who tend to get their hands on these scarce properties first.
Some of the wealthy elites who have nabbed these units already own additional property worth north of $1 million. The goal of housing policy should not be to help the rich keep getting richer.
Should Harris’ proposal become law, local and state governments would be stuck with this policy and all the negative effects that come with it for generations — unless a future Congress finds the courage to rescind the measure.
While most Democrats and Republicans should agree that further erosion of local political control is counterproductive, Harris doesn’t seem to concur.
From food to housing to energy, she wants to remove most of our statehouses’ power and increase federal authority over just about every facet of our lives, irrespective of the consequences. And that’s not just wrong — it’s dangerous.
Unfortunately, the goal of massive federal housing overreach is not just a Harris problem. It’s become a systemic problem taking over the Democratic Party, as a glance at the platform the party adopted last week will confirm.
Add this to the long list of reasons that voters can’t let the House of Representatives or the White House turn blue come November.
Lee Zeldin (R) represented Suffolk County in the House of Representatives from 2015 to 2023 and ran for New York governor in 2022.
https://nypost.com/2024/08/29/opinion/harris-housing-plan-would-inflate-costs-worsen-the-crisis/
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