$25,000 for first-time buyers, 3 million new homes

With the housing affordability crisis spreading from California to the United States, Vice President Kamala Harris last week unveiled her economic program aimed at lowering housing costs for both homeowners and renters across the country.

The presumptive Democratic presidential nominee appears to be using some tricks from the long-standing repertoire of California housing activists, emphasizing the need to increase supply and reduce the bureaucratic hurdles that hinder the construction of new housing.

“There is a serious shortage of housing,” Harris said last week during a speech in Raleigh, North Carolina. “In many places it is too difficult to build, and that is driving up prices.”

In her plan, Harris promised to build three million new owner-occupied and rental homes within her first four years in office. Here are some of her key policy proposals:

— Offer up to $25,000 down payment for first-time home buyers and a $10,000 tax credit. This builds on President Joe Biden’s proposal to provide 400,000 first-time home buyers with a $25,000 down payment.

— For the first time, there will be a tax incentive for developers who build entry-level homes and sell them to first-time buyers. This could be especially significant in California, where Governor Gavin Newsom recently cut funding for CalHome, an affordable homebuilding program, by $152.5 million in the 2025 budget, says JT Hareshmak, senior policy manager at the nonprofit Housing Association of Northern California.

— Expanding existing tax incentives for companies that create affordable housing.

— Elimination of tax benefits for large investors who purchase large numbers of single-family homes. Wall Street investors have come under fire since the Great Recession for buying up single-family homes across the country. Critics say their penetration of the market has limited the number of first-time buyers. It’s unclear how much supply that might unlock here in Harris’s home state: The California Research Bureau has found that less than 2% of single-family homes are owned by investors who own 10 or more properties nationwide.

— Ban on algorithm-based tools for setting rent prices. Landlords across the country use software programs to analyze vast amounts of data on rental prices and vacancy rates and then receive recommendations on how much to charge for their apartments. RealPage, the company that makes the widely used YieldStar software, is under antitrust investigation in several states over allegations of price fixing.

— Enabling the construction of new affordable housing on federal land.

The housing plan is relatively light on details and leaves many questions unanswered – most notably how it will be financed. Many of the proposals would require congressional support, but that is not guaranteed.

Still, the plan has caught the attention of Bay Area housing activists, who are now seeing the policies they have spent years pushing at the local level finally reach a national audience.

“Affordable resources are drying up across the country,” Hareshmak said. “It’s becoming a national problem like it hasn’t been in a long time.”

The California Republican Party criticized Harris’ economic program, arguing that housing costs in the state had skyrocketed even under Democratic control.