Editor’s Note: The RISMedia series, Legislative Round-Up looks at pending and passed federal and state-level legislation that impacts real estate professionals.
Housing affordability is one of the pressing issues facing Americans today. No surprise, that in election season, politicians—from presidential candidates to congressional representatives—are putting forth their solutions. Both the Democrats and Republicans have claimed the goal of making housing more affordable, but outline different paths to getting there.
Where the presidential platforms stand on housing
Democratic candidate Kamala Harris published her official policy platform on September 8. The platform includes 11 points outlining the major policy goals of the Harris campaign. Housing is listed near the top under the second bullet point, titled “Make rent more affordable and homeownership more attainable.” The platform mostly reiterates housing plans Harris’ campaign had previously detailed.
Describing a home as “represent(ing) financial security and an opportunity to build intergenerational wealth,” the platform’s planks included building 3 million new housing units for rent and purchase, a program of $25,000 down payment assistance to first-time homebuyers and removing tax breaks for landlords that “price fix” rents.
Based on her comments about “working in partnership with industry,” Harris intends these new units to be built as private, not public, housing.
Harris’ proposals would need the approval of Congress, which is why legislators are moving on them. Representative Jimmy Gomez (D-CA), chair of the Congressional Renters Caucus, announced in August he will introduce legislation to give tax credits to first-time homebuyers and incentivize builders to construct starter homes. Gomez explicitly said he was “answering Vice President Harris’ call,” though the specific language of Gomez’s bill has not yet been released, with the bill not formally introduced at press time.
The Trump campaign’s platform does not allude to housing in any of its 20 promises, but clicking into the Read More About the Trump Republican Platform on the promises page, the subject is briefly referenced. The details are vaguer than the Harris campaign’s, with vows to reduce mortgage rates by slashing inflation, “cut unnecessary regulations” and “promote homeownership through tax incentives.” The campaign’s most specific housing policy is opening limited portions of federal lands to be developed for housing.
This is an idea with some bipartisan support; the Biden administration has said it is looking at “vacant and surplus federal lands that are within existing development zones and in metros that face shortages of affordable housing,” per Politico.
The Harris campaign has also said it will, if elected, “take action to make certain federal lands eligible to be repurposed for new housing developments that families can afford.”
Despite the campaign’s messaging, Harris’ running mate Minnesota Governor Tim Walz cited concerns about the environmental sustainability of federal land sales during the the Vice Presidential debate on October 1.
Housing took up a segment of said debate, where both Walz and Republican vice presidential candidate J.D. Vance largely stuck to their respective campaign’s message on the issue. Walz, current governor of Minnesota, pointed to his track record on housing; Minneapolis currently exceeds neighboring metro areas in housing construction and has thus seen lower rent prices.
Walz noted that it will take the efforts of local builders, not just federal oversight, to boost construction and said “red tape” will need to be cut in some areas. “We’ve got a lot of folks who see housing as another commodity,” said Walz, inferring that this mindset is responsible for high housing costs.
Vance said immigration reform is important to housing, alleging that border policy under the Biden/Harris administration has let in millions of undocumented immigrants, which he said leads to high home prices due to increased demands.
“Twenty-five million illegal immigrants competing with Americans for scarce homes is one of the most significant drivers of home prices in the country,” he said.
In terms of immediate relief, Vance said that he and Trump have proposed to lower energy prices, stating that, “If we open up American energy, you will get immediate pricing release, relief, for American citizens, not, by the way, just in housing, but in a whole host of other economic goods too.”
California limits homebuyer contracts to three months
Real estate is still a local issue even when national news dominates the discourse.
Due to settlement agreements by the National Association of REALTORS® (NAR), buyer agents must use representative agreements with their clients before entering an official business relationship.
On September 24, California Governor Gavin Newsom signed a bill that limits these agreements to three months within the state of California. Agents and their clients can renew the agreement once those 90 days have passed, but the agreements cannot include language saying that the renewal goes into effect automatically.
The bill—which takes effect on January 1, 2025—was supported by the California Association of REALTORS® (CAR). In a press release, CAR said that the law will offer consumers more choice as they navigate real estate transactions.
SALT Cap showdown set for 2025
The State and Local Tax (SALT) deduction allows people to write off the cost of certain state and local taxes on their federal taxes. The deduction is especially valuable to homeowners, as property taxes fall under the SALT designation.
The 2017 Tax Cuts and Jobs Act introduced a new cap on the SALT deduction: Under this cap, an individual can only deduct $10,000 max (or $5,000, if one is a married person filing a separate tax return).
The cap came with a built-in sunset, however, and will expire on December 31, 2025, no matter who wins the election—unless Congress acts to change that soon.
The SALT Tax mostly affects homeowners in states with high income taxes, such as California, New York and New Jersey. Ergo, many Democrats representing these states oppose the cap, despite some progressives favoring it on egalitarian grounds. (The Institute on Taxation and Economic Policy, a nonprofit think tank focused on economic issues, found the benefits of removing the SALT cap would go straight to the top, with the wealthiest 1% seeing 62% of the relief.)
There have been previous attempts to actively overturn the cap. One provision was included in President Joe Biden’s Build Back Better Act, but was ultimately excluded from the passed Inflation Reduction Act, which left the cap unchanged.
Some congressional Republicans have put forth proposals that would alter the cap instead of repealing it.
New York Representative Michael Lawler has proposed the SALT Marriage Penalty Elimination Act (introduced in January 2024). This bill would increase the cap from $10,000 to $20,000 for married couples who make less than $500,000.
Senator Susan Collins (R-ME) proposed, in 2023, the SALT Deduction Fairness Act, which would allow $20,000 to be deducted on a joint return.
Despite having signed the SALT cap into law, Trump stated in a Truth Social post that he will “get SALT back” if elected.
Housing reform put forth in Congress
On September 19, 2024, Representative Alexandria Ocasio-Cortez (D-NY), introduced a housing reform bill called the Homes Act. Senator Tina Smith (D-MN), chair of the Senate Housing, Transportation and Community Development Subcommittee, introduced the corresponding bill in the Senate.
The Homes Act’s goal is to build and maintain 1.3 million new homes, and the 95-page bill’s scope includes several other initiatives.
The bill’s main plank is establishing a new Housing Development Authority (operating under the authority of HUD) to develop housing for the public good. Houses created under the act would be designated as “permanently affordable” social housing, with regulations put in place to ensure quality upkeep, affordability and labor protections for construction workers who build the homes.
For instance, rents for these new units would be capped at 25% of a household’s income, with a maximum 3% increase per year. Tenants’ organizing rights would also be enshrined under the act.
Under the Homes Act, $30 billion in annual appropriations are automatically authorized for the Development Authority, with 5% set aside for Native communities and 10% for rural communities.
To achieve its goal, the bill includes a repeal of the Faircloth Amendment, which prohibits the federal government from building new public housing that exceeds the inventory set in October 1999. Ocasio-Cortez has long advocated for a repeal of the amendment and has previously introduced legislation to do so.
Coinciding with the announcement, Ocasio-Cortez and Smith co-authored a New York Times op-ed about the legislation.
“Outsourcing development to the private market leaves affordable housing subject to the boom-and-bust cycle of private investment. What’s more, the federal government relinquishes the oversight needed to protect tenants from abusive landlords and racial discrimination,” they write, claiming that a more interventionist housing policy is needed to meet the demands of the current affordability crisis.
The Homes Act has garnered support from advocacy groups including the NAACP and think tanks such as the Center for American Progress. The legislation currently has two co-sponsors in the Senate and 34 in the House.
The bill does not have any Republican support at this time. Douglas Holtz-Eakin—president of the conservative American Action Forum (AAF) think tank and former director of the Congressional Budget Office—has criticized the Homes Act as an ineffective and expensive solution to the housing crisis.
In a September 19 post on the AAF website, Holtz-Eakin wrote, “So, how does this address affordability? Does it change the cost of construction in any way? No. Does it provide cheaper financing for construction or purchase? No, except for the obvious ability to plow taxpayer dollars into the mix. There are no new capabilities—just the ability to crowd out the private sector using these subsidies.
“…The bill allows the favored constituencies to overrun local zoning and land-use restrictions. The remainder is just window dressing. Yes, that would have an impact, but it is precisely those restrictions that lie at the heart of the affordability issue and will lie at the heart of the failure of this bill.
“Oh, and putting that aside, at this great expense the authors of the bill indicate that it will create 1.25 million units over the next 10 years (at an average cost of a pricey $480,000 each). Let’s see. There are 131.4 million households in the United States, so another 125,000 units each year would give less than 0.1% of households a home. That’s the definition of not solving a problem at great expense.”
