Housing affordability has emerged as a key issue in the campaign for the 2024 presidential election.

With increasing rents and many Americans unable to buy homes, both Democratic nominee Kamala Harris and Republican Donald Trump have pledged to improve housing affordability if they win the presidency.

A central part of Harris’ strategy includes constructing 3 million additional homes over the next four years, a point she frequently emphasizes on the campaign trail.

“Harris emphasizes the need for the federal government to collaborate with local and state agencies to boost housing development,” noted Yonah Freemark, a researcher at the Urban Institute. “While boosting housing supply may help lower prices, it’s not the sole answer to improving affordability, but it is a crucial aspect.”

The shortage of available homes has been exacerbated by pandemic-related construction delays and homeowners reluctant to sell due to high mortgage rates, contributing to rising home prices.

“The problem isn’t just a lack of homes; it’s also that affordable homes are scarce in desirable areas,” said economist Kyle Moore with EPI Action, highlighting that many of the new high-end units built by developers remain out of reach for most renters.

What is Harris’ strategy for increasing housing units?

The Harris campaign revealed a plan in August to create 3 million new housing units to address the existing shortage.

“Vice President Harris will collaborate with the industry to build the necessary housing for purchase and rental, while dismantling barriers at state and local levels that hinder new construction,” the memo outlines, including the following strategies:

• Introduce a new tax incentive aimed at building starter homes
• Enhance tax incentives for businesses constructing affordable rental properties
• Double the proposed innovation fund from the Biden-Harris administration for local solutions to housing challenges
• Eliminate bureaucratic obstacles to expedite the permitting process for new homes

Creating 3 million additional units translates to a 50% increase

A representative from the Harris campaign clarified that the pledge to add 3 million units during her first term considers the new construction already stimulated by the market. The Biden administration previously suggested adding 2 million units.

According to U.S. Census data, the number of newly completed privately-owned housing units significantly decreased after the 2008 housing crash but rose to a post-crisis peak in 2023.

From 2020 to 2023, around 5.5 million new housing units were finished, based on the Census data. If this figure were used as a baseline for the next four years, Harris’ assurance implies roughly a 50% increase in new construction.

“A 50% surge in housing construction is quite ambitious,” Freemark commented. “Achieving such an increase would be challenging, not only because of financing and funding needs but also due to supply chain and construction labor requirements for building the homes and apartments we’re discussing.”

He also mentioned that Harris’ current plan may struggle to address these challenges but hinted that some unclear aspects might suggest alternative approaches to meet the demand.

Challenges faced by Harris’ 3 million unit initiative

Some factors contributing to the housing crisis, such as elevated interest rates binding people to their mortgages, might resolve on their own with the recent announcement of the first interest rate cut in four years.

However, experts have raised concerns about potential obstacles in other areas of Harris’ plan.

As Freemark noted, these proposals will need Congressional approval, which could vary significantly based on the election outcomes. Furthermore, local governments may resist federal recommendations concerning their zoning and permitting regulations.

The success of the new housing units will also depend on their location and construction methods.

“A critical element of the policy is ensuring these homes are built in areas with job opportunities,” Moore emphasized, noting that the units must also comply with safety and sustainability standards.

As Americans increasingly allocate a larger portion of their income on housing and homeownership remains one of the few reliable ways to build wealth, resolving the crisis is essential.

“We also need to consider that beyond just the fundamental right to have shelter. it is vital for economic mobility and security,” Moore added.