By Padirac @Adobe Stock
We’re from the Government; We’re Here to Help
Just when you think it’s safe, along comes another disturbing Harris policy that will have you running for cover. Harris, perhaps, is relying on the public’s economic illiteracy.
What Happened to Supply and Demand
Kamala Harris is proposing a $40 billion fund for local governments to explore “innovative” housing solutions, according to Edward Pinto in the WSJ. Mr. Pinto is co-director of the American Enterprise Institute’s Housing Center.
The Housing and Urban Development Department (HUD) would likely channel this money into programs laden with self-defeating government-mandated affordability requirements, which markets abhor.
History offers a cautionary tale against such federal interference in the housing market: From the 1930s to 2008, at least 43 housing, urban-renewal and community-development programs were signed into law. Despite these laws’ lofty goals, these initiatives consistently failed to make housing more affordable.
No question there is a housing shortage/crisis. Apparently, no one has a settled explanation. Some lay the blame on a housing supply shortage of between three and eight million housing units.
Rather than pursuing Kamala Harris’s imprudent plan, proposes Mr. Pinto, the federal government has several sensible options to increase the housing supply at market rate:
- Implement a 10-year plan to auction surplus federal lands for home construction. Doing so could add 200,000 homes per year. By my estimate, these sales could generate $10 billion in annual receipts.
- Eliminate the tax deduction for interest on mortgages. This would increase supply and reduce demand by freeing up over the next decade 700,000 existing homes currently being used as secondary residences.
- Adopt a credible plan to reduce deficit spending. This could lower the 10-year Treasury rate (along with mortgage rates) by 0.75 to 1 percentage point.
- Eliminate subsidized housing project, which often involve a cycle of subsidizing, rehabilitating,
- Tear down and rebuild, all on the same parcel. Congress should require HUD to document, project by project, this revolving door of waste.
“Taxpayer would be thankful for those measures,” writes Mr. Pinto.
Mr. Pinto’s bulleted measures, combined with state and local efforts to deregulate land use and zoning, would help mitigate the housing affordability crisis—all at no taxpayer cost and without unintended consequences.
If you’re willing to fight for Main Street America, click here to sign up for the Richardcyoung.com free weekly email.
