The 2020 presidential race is pivotal for many reasons, including its implications for the housing industry, which often receives less attention on the campaign trail than other topics.
Yet, as America faces a historic shortage of homes for sale, researchers at Realtor.com take a close look at the manner in which each ticket might approach this vital issue, which could affect millions of Americans for years to come.
Realtor.com’s Chief Economist Danielle Hale boils it down to two points of view—one shared largely among Republicans, the other among Democrats.
“When voters make a decision in November, the choices are largely preserving the status quo in the housing market versus expanding opportunities for minorities, low-income and lower-middle class households,” Hale said.
President Donald Trump has not released a specific housing plan, but his actions in office provide clues to what his future policies might be.
"In the last four years, the homeownership rate has been going up, finally," John Weicher, Director of the Center for Housing and Financial Markets at the Hudson Institute told Realtor.com. “Trump has recognized the importance of housing. It’s part of his strategy to rebuild the economy in the aftermath of the Great Recession, and it's paid off.”
A significant move by the Trump administration included pushing to privatize Fannie Mae and Freddie Mac (which back about half of America’s mortgages). Critics worry that the move could endanger the popular 30-year fixed-rate mortgage. At least, mortgage interest rates and fees could rise as a result of the change, according to Realtor.com.
Also, the Affirmatively Furthering Fair Housing rule designed to encourage more affordable housing, has come to an end during the Trump administration—that benefits wealthier towns and suburbs, which fought the Obama-era rule, fearing it might lower property values. Supporters of the rule argue that the rule’s eradication could hurt lower-income consumers.
"The rule was one of the main achievements of his predecessor," says Edward Goetz, an urban policy professor at the University of Minnesota in Minneapolis. "The end result could be that local governments don't take fair housing as seriously."
Trump also enacted specific tax changes, detailed on Realtor.com, that will affect the housing market.
Democratic hopeful Joe Biden last February published a detailed housing plan. Even those who support his plan say Biden’s aspirations will be tough to achieve.
"With the pandemic and the economic crisis, the affordable housing problems are only going to get worse," Goetz said. “Recessionary conditions could make it tougher to find the money to enact these plans as local and state governments are scrambling for funding. The question is how much of this Biden can get through Congress—and how much of it can get funded.”
One of Biden's most popular ideas is a provision of a down payment tax credit of up to $15,000 for first-time homebuyers. However, some worry this proposal could be mistimed.
“His idea of a down payment tax credit is great, but that might not be [the right] proposal for this market,” Hale said. “The housing market's biggest problem today is the dearth of affordably priced homes. Right now we have too many buyers and not enough homes for sale.”
If elected, Biden has pledged to help fight the racial housing gap related to lower homeownership rates for people of color.
He's proposed creating a national standard for appraising homes to make sure properties in “communities of color” wouldn't be assessed at less than similar homes in comparable white neighborhoods.
"It's intriguing and would likely help equalize the playing field," Hale said.
Biden has also proposed creating a public agency that would help raise the credit scores of minority home buyers by considering things like rental payment histories and utility bills paid on time.
Senator Kamala Harris’s addition to the Democratic ticket complements the Biden plan for housing, says Up For Growth, an organization focused on creating quality, affordable neighborhoods. For example, Harris introduced a Senate version of the Housing Is Infrastructure Act, a bill that supports low- and mixed-income housing through infrastructure improvements, investments in public housing, and expansion of funding to incentivize as much, locally.
As stated by Up For Growth earlier this week, “Solving the national housing crisis will take serious proposals from members of both parties and on both ends of Pennsylvania Avenue.”