Kamala Harris putting housing issues front and center and offering ideas is something bigwigs at the National Association of Home Builders have longed for in presidential aspirants for years. It’s also taken them aback because they expected their guy would do it first.
Not since President Barack Obama’s $7,500 first-time homebuyer tax credit in 2009 has the executive branch been ready to act so decisively on a housing crisis. It helped salvage an industry then, especially publicly traded megabuilders who faced bankruptcies that would have sunk them, triggering even greater national economic calamity.
Unfortunately, the Harris proposal for a similar tax credit of $25,000 is the wrong solution to an entirely different crisis. While it’s true today’s first-time homebuyers are largely priced out of current market conditions and would eagerly take advantage of the largesse, the effect would immediately raise housing prices by shrinking supply — exacerbating existing problems caused by national and local housing shortages.
Obama’s credit was designed, and it largely succeeded, to clear a hugely overbuilt inventory of speculative homes built primarily by megabuilders. There was too much supply then, so Obama’s action stimulated demand.
Today, demand does not need stimulation, it’s already over the top. What needs stimulating is the supply side, including, regrettably, helping publicly traded builders produce even more. But how do you stimulate supply, especially when the public already thinks building and development is driven solely by greed and profits?
On some issues, the national homebuilders get it right — costs need to get lower. They sensibly oppose tariffs on imported Canadian lumber and Chinese building products, especially solar panels. They recognize much of their workforce needs a clear path to citizenship, and they urge local zoning reforms to allow higher infill density.
But then they go off the rails with reflexive instincts opposing “regulations.” For national leadership, that appears the safest solution to embrace, which their guy promises he will do something about.
Easier said than done. Regulations are like tax credits — everyone knows they’re wasteful, except the ones protecting your interests. Those you fight to protect.
Unfortunately, the national association has largely been on the wrong side of history and regulations. Which ones should go? Repeal clean air, water and wetlands protection? Let endangered species die off? Forget about OSHA worker protections? Low-flow toilets? Hurricane clips? Energy efficiency?
All of the above; especially that last one, energy efficiency, that one should go.
Since 1993 and the introduction of a Model Energy Code, the national association has argued such regulations deviated from the purpose of building codes, which was exclusively and historically directed to life and safety. Energy efficiency was political.
Yes, it was then and is today, even more so today. The national association will keep fighting and losing that battle, but it is good it’s in the game and pushing back on excessive ideas with no reasonable payback for consumers or the environment. It also often holds product claims up for scrutiny. Insulation and window manufacturers no longer make wild claims of eye-popping efficiency because of research the association has funded. It’s why I stay engaged with the association.
Ultimately, solving housing is local. The two biggest impacts would be immediate and groundbreaking zoning changes to eliminate all single-house zoning on city lots, which the national association does not oppose and therefore tacitly approves.
The second is finding means to subsidize raw land costs, and assuming infrastructure is a municipal investment that shouldn’t be borne by developers, especially nonprofit developers building affordable housing.
Kamala Harris can get us talking nationally, but only local leadership can make a difference.
