Harris vs. Trump on Housing: Each Candidate's Plan to Lower Costs for Homebuyers and Renters

The high cost of housing has been a hot topic over the past two years. In a presidential election year, concerns about affordability have become talking points for both candidates.

In a recent Gallup poll, high housing costs were American families' second-most important financial problem after inflation. A lack of inventory pushed home prices to new highs over the past four years, while rising mortgage rates significantly increased borrowing costs.

Both Republican candidate Donald Trump and Democratic candidate Kamala Harris have spoken about the need for more housing and improved affordability. They even agree on some ways to help achieve it, although they differ significantly in their approaches.

With less than two weeks before Americans head to the polls, here’s where each candidate stands on housing.

Mortgage rates

The president doesn’t have the power to directly influence mortgage rate movement, despite any promises to do so. Rate movements depend on the state of the U.S. economy, the labor market and how investors expect the economy to perform over time.

The extent to which the candidates’ economic proposals might raise or lower inflation could have an indirect influence on mortgage rates, since Federal Reserve policymakers use interest rate hikes as a tool to tamp down high inflation.

In a recent Wall Street Journal Survey of 50 economists, more than two-thirds said inflation would increase if Trump’s plan of imposing stiff tariffs on imports went into effect, while 12% predicted that inflation would rise under Harris (the remaining respondents said neither candidate would have much impact on inflation). Harris said she would reduce inflation by lowering drug costs and curtailing corporate price gouging.

Housing affordability

The housing supply was already low before 2020 due to years of underbuilding. The buying frenzy created by record-low mortgage rates during the pandemic caused inventory to drop even more. Low borrowing costs made buying larger homes, second homes and investment properties much more affordable, attracting more buyers to the market. With limited inventory to meet burgeoning buyer demand, home prices skyrocketed.

High home prices weren’t as much of an issue while mortgage rates hovered near record lows, but once they started to rise in 2022, the combination of elevated prices and rates created an “unprecedented affordability crisis,” according to Harvard University researchers.

Both candidates recognize that the key to improving affordability is building more homes. Each has a plan to increase tax incentives and decrease regulation to promote new construction, although they differ on the specifics.

Help for homebuyers

Coming up with a down payment is one of the obstacles many prospective buyers face, particularly first-time homebuyers. Harris proposes $25,000 in down payment assistance for would-be buyers who have paid their rent on time for two consecutive years. Her platform mentions more generous aid for first-generation buyers, although it is light on specifics.

Trump hasn’t said much on the campaign trail about his plans to help first-time homebuyers. His platform pledges to provide support for homebuyers through tax incentives, although no specifics have been given. According to the Bipartisan Policy Center, this support could be in the form of tax credits or deductions on mortgage interest and insurance.

Tax incentives to add inventory

Harris’ platform includes a plan to increase housing inventory by building 3 million homes over the next four years, using existing and new tax incentives to make construction less expensive and easier for builders. These incentives include:

• Expand the Low Income Housing Tax Credit (LIHTC), a federal program that provides tax credits to developers who agree to reserve a fraction of their units as affordable housing. These credits are typically sold to investors to raise capital for construction projects.

• Expand the Neighborhood Homes Tax Credit (NHTC) for developers who build or rehabilitate owner-occupied homes for moderate- and middle-income families.

• Establish a new tax cut for builders to promote the construction or rehabilitation of affordable homes for first-time homebuyers in low-income areas. (This would complement the Neighborhood Homes Tax Credit.)

• Establish a $40 billion innovation fund to encourage local and state governments to work with developers on finding new ways to create more affordable housing. This could include investing in more efficient building techniques and streamlining the permitting process.

Trump’s platform also relies on using tax incentives and reducing environmental, zoning and other regulatory red tape, but does not provide a lot of details. Both the LIHTC and NHTC have bipartisan support, so these measures could be adopted by a Republican administration as well.

Both Harris and Trump also propose opening up limited space on federal land for the development of affordable housing. At a speech before the Economic Club of New York on September 5, Spectrum News reported Trump saying these federal lands would be “ultra-low tax and ultra-low regulations” zones.

Reducing rents

Homeowners aren’t the only ones paying more for housing these days. Rents have risen significantly since the pandemic, as households priced out of the housing market have to rent instead.

Harris has expressed her support for two bills currently in Congress that address rental costs. The first is the Stop Predatory Investing Act, which would limit tax deductions available to big investors, making the rental business less lucrative for speculators.

The second bill is the Preventing Algorithmic Collusion Act, which would ban “corporate landlords” — defined as those owning more than 50 rental properties — from using algorithmic software to set rental prices. Harris has also expressed support for a 5% cap on rent increases over the next two years.

Trump has not specifically addressed renter affordability, so he may be counting on adding enough inventory to help bring prices down.

Whether any candidate can make good on their promises depends on more than just the outcome of the presidential election. Either Trump or Harris will have an easier time implementing their respective proposals if their party also controls one or both chambers of Congress. A divided government would mean that many of these proposals would not be enacted or would go through several changes before becoming law.

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