The election will change things, but what about housing?

Nothing lasts forever, especially not republics. If you are a glutton for punishment, you can read my take on Trump and the mania surrounding him (Destroying the Constitution to Save It: A Warning from the Roman Republic), a post written long before the assassination attempts. Like it or not, how the country deals with Trump is an indicator of how long the American “experiment” will last. Republics are fleeting historical exceptions – mishaps are not a feature – in government. The upcoming elections are an indicator of how long the American republic will last. But does choice matter for housing for people who make less money and struggle to cover housing costs?

Kurt Carlton, president of New Western, a platform that helps real estate investors find buyers, is involved. New West says it is “the largest national source of residential real estate.” As I said before, real estate investors big and small aren’t bad. Criticizing “foreign” investors or “greedy investors” and blaming them for the “real estate crisis” is fashionable these days, but the result of naivety or simple ignorance of how housing works. The Keebler elves don’t build dwellings; Someone has to pay for it, be it a person building their own house or someone trying to create housing in order for their investment in construction or renovation to recoup. If you’re reading this in an office, a house or a building, I’m pretty sure some investors were involved.

Carlton and I have previously addressed the question of why investor capital is important to activate housing that would otherwise be abandoned or underutilized. What does Carlton think of the upcoming election? I asked him whether he thought either candidate would address the key issues. Regardless of who wins, what is the answer to rising property prices and rents?

“The real solution is right under our noses and it is simple and cost-effective. The challenge with current housing policy is that it focuses on increasing supply without addressing the underlying causes of the inventory crisis.”

Agreed. I asked him about each candidate’s housing plans.

How would you summarize Harris’ housing policies? How would these impact rent and ownership for consumers, investors and those developing housing?

“Harris’ housing policies are designed to appeal to voters, but their effectiveness in addressing the housing crisis is questionable. While well-intentioned, the $25,000 down payment assistance program risks further stimulating demand in an already tight market, driving up home prices and exacerbating the affordable housing shortage. The $40 billion Innovation Fund, intended to reform zoning and regulatory frameworks, could overwhelm local governments that lack the capacity or infrastructure to implement meaningful changes. Meanwhile, the focus on Wall Street landlords seems misplaced since institutional owners make up a small and shrinking share of the housing market. Restricting these businesses is unlikely to have a noticeable impact on the wider property buying landscape.”

How would you summarize Trump’s housing policies? How would these impact rent and ownership for consumers, investors and those developing housing?

“Trump has not yet laid out specific housing policy in as much detail as Harris, leaving uncertainty about his approach. However, he has indicated that the focus is largely on restoring economic stability, with the aim of reducing mortgage rates, easing supply chain disruptions and reducing high construction costs due to excessive regulations. He also proposes using federal land for new housing developments. In our view, the development of federal land is not a priority. There are already approximately 15 million vacant homes in the United States, many of them in areas where housing is desperately needed. Renovating the existing housing stock should be at the heart of any housing policy to address the current crisis.”

It’s true. Harris’ housing plan is full of regulatory interference and questionable programs that seem to just add more money to the pile of money that hasn’t solved the problem. Here is a recording from the National Housing Conference (pro) and from the Hoover Institution (con). Their plan pumps more money into the mortgage market, which doesn’t help prices, and their pursuit of illusory “price fixing” will only increase the risk of operating rental properties, thereby driving up rents.

“Overall, I believe Trump has a solid understanding of the housing market and the economic adjustments needed to rebalance housing supply and demand,” Carlton says. If he were well-advised, Carlton says, “he would probably support local small investors working to rehabilitate vacant and distressed properties.” Maybe. But when has Trump ever taken anyone’s advice? He was the worst actor in the Covid clearance tape fiasco and ordered the CDC to solve the problem. Their solution was to make up facts (people evicted because of Covid drove across the country looking for housing) and add fuel to local eviction bans rather than cash relief.

I wouldn’t trust Harris or Trump to organize a funeral with just one car. Harris is an ambitious climber in the tradition of many of her historical and fictional predecessors (see Being There), and Trump is an endless source of entertainment for me, but anything good he does will be entirely accidental (see Mr. Magoo). We’re in trouble. But the truth is that the reforms needed at the federal level, whatever the outcome, can only be accomplished with the support of Congress, a body that completes the branches with complete incompetence (see the three stooges). The good news and the bad news is that neither the candidate nor the Congress is capable of making any big moves in the next two years.

In order. Yes. I’m pretty cynical. But let’s return to Carlton’s more compelling thoughts. Harris wants to build 3 million homes.

“Building three million new homes would require new land, relaxed regulations, changes to zoning rules and long-term subsidies to builders, who often find it more profitable to build larger homes than affordable entry-level homes. There are now millions of vacant properties in America in desirable, well-established communities – properties that are zoned and planned and can be revitalized by local investors. These investors are the ones who take the risk of renovating homes that most individual buyers have neither the means nor the desire to undertake.”

I’m glad someone is paying attention. I haven’t watched the Drudge Report or Real Clear Politics in months. I feel the same way about this election as the angry grandma about the car wash: I hate it. But either way, I hope people in a new administration will feel the same frustration I’ve felt over the last decade and be willing to try something new. If that happens, I’m okay with it no matter who wins.