2020 Democrats Unveil Plans to Address Affordable Housing Shortage in the US: Here Are 5 Things to Know

Drew Angerer/Chip Somodevilla/Getty Images; Mike Segar/Reuters

There is an affordable housing crisis in the United States and several 2020 Democrats think they have the big-government solution to solve it.

Many politicians — including those in the Trump administration — are looking to come up with a solution to ease the financial burden of renting a place to live. The issue is quickly becoming a top priority for 2020 Democrats, as several candidates announce their affordable housing policy prescriptions.

From tax credits to cutting regulations, here are five things to know about the affordable housing crisis and the 2020 candidates’ plans to address the issue.

The Affordable Housing Crisis

While the affordable housing issue gets a lot less air time than issues like immigration and health care, it is still a serious problem that is impacting millions of Americans.

The National Association of Home Builders/Wells Fargo Housing Opportunity Index shows that, in 2018, only 56% of home purchases were considered affordable given the homeowner’s income. That percentage is expected to fall below 50% in 2019, but it wasn’t always this way. As recently as 2012, 78% of home purchases were considered affordable.

Beyond home ownership, rentals have become unaffordable, too. Department of Housing and Urban Development notes that those who spend more than 30% and 50% of their income are considered “cost-burdened” and “severely cost burdened,” respectively.

The average millennial is spending 45% of their income on rent.

This can impact the entire economy because more Americans are paying for rent instead of using their discretionary money as a consumer. Beyond the surface level of discretionary spending, this crisis has also resulted in homelessness issues, as well. From 2016 to 2017, homelessness jumped 0.7%, a change that has been attributed to the shortage of public housing and the rising price of rent in major cities.

Since this is a major problem, several 2020 candidates have announced their plans to fix it.

A Tax Credit for Renters

Senator Kamala Harris (D-Calif.) is championing a tax credit for renters that would allow them to write off their rent expenses over that total more than 30% of their income. She also plans to expand grants from the Department of Housing and Urban Development (HUD) to offer up to $25,000 to help low-income homeowners provide a down payment, specifically aiming to assist minority families who are disproportionately impacted by the affordable housing crisis.

While Harris’s plan could help some get their foot in the door of homeownership and cut some of the burden for renters, her plan does little to address the price of housing itself.

But she argues that this is an immediate problem that must be addressed now, not after a battle on rent prices.

“Right now, nearly half of Americans couldn’t afford an emergency $400 expense – these families need help now,” Harris wrote of her Rent Relief Act. “This is about more than just economics—it’s about the basic security and dignity that every American deserves to have in their own home.”

Baby Bonds and Legal Aid

Senator Cory Booker’s (D-N.J.) plan to address affordable housing focuses on the systemic issues of poverty. He sees homeownership as a key part of reducing the racial wealth gap in the United States.

To address this, Booker’s plan is to hand out “baby bonds.” As IJR previously reported, “baby bonds” are government funded bonds of $1,000 given to every single child in the United States when they are born. If the child comes from a low-income family, the government will add additional funds to the bond each year.

Depending on the growth of bond, a child from a low-income household could have a bond worth as much as $50,000 by the time he or she is 18 years old to put toward housing or education. Booker plans to pay for these baby bonds using a tax on capital gains.

This is more of a generational plan than a quick fix, but Booker also plans to offer a renter tax credit like Harris, as well as expanding legal aid to those who cannot afford to fight their landlord on legal disputes.

Similar to Harris, Booker’s plan does not do much to address the costs of housing.

Housing as a Human Right

While many of the 2020 Democrats are looking to address affordable housing for low-income Americans, former HUD Secretary Julián Castro takes it one step further to claim that housing is a “human right” for all American citizens — and those who are undocumented.

Castro noted that he wants to offer housing protections for everyone, regardless of their “race, gender, sexual orientation, legal status, or disability,” with his inclusion “legal status” being a clear breaking point from the Trump administration.

As IJR previously reported, HUD Secretary Ben Carson recently announced that he would be banning undocumented immigrants from accessing public housing in the U.S., as many American citizens are waiting for a spot.

To meet his goal of housing as a “human right,” Castro plans to drastically expand a “fully-funded entitlement program” to fund housing vouchers — which only 25% of applicants receive under today’s system.

Increasing the Supply of Housing

For any of these 2020 candidates to implement their plans, they must first defeat President Donald Trump. His administration has a different approach to addressing the cost of housing. In an op-ed to the Washington Post, Carson explained his focus on increasing the housing supply rather than turning to solutions like a renters tax credit, writing:

“For far too long, federal policy has focused solely on helping people through increasing spending on rental assistance. As a doctor, I can tell you: These are the symptoms of a patient who needs a different prescription — one that focuses on the reason housing costs are increasing.”

The Trump administration, under the leadership of Carson, has focused on cutting back bureaucracy and changing zoning laws in hopes that it will increase the amount of available housing.

As IJR previously reported, Carson blamed bureaucracy for many of the problems with affordable housing. He noted that alternative housing options, such as manufactured homes, face more regulation that on-site homes. He also explained that zoning laws can limit the types of homes that are built in some areas, limiting the potential for multi-family housing units.

The Trump administration is attempting to address the issue of affordable housing from the supply side, hoping that more housing will drive down prices. Sen. Elizabeth Warren (D-Mass.) has also proposed increasing the supply of housing, albeit in a less free-market approach.

Warren’s plan would dump $500 billion over 10 years into building affordable housing. Both she and the Trump administration are focused on the supply-side of the affordable housing equation, but Warren’s plan provides for government-funded construction of new housing while Trump’s team hopes the market achieves that goal without taxpayer dollars.

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General Confusion
Member

“‘The average millennial is spending 45% of their income on rent.’ So go live in a place where the rent is cheaper. Live within your means and stop spending money on thing you cant afford and do not need.” Dave Hardesty Dave is confused about wages, including the minimum wage. Nowhere in the US can anyone earning the minimum wage afford a two-bedroom apartment. Nowhere. People who work are going homeless because they have few options in the choice of having enough money to pay rent AND pay for food for a family AND pay for medical treatment, etc. The… Read more »

Jeffrey Moore
Member

Housing is not a human right! Nothing is a right that requires someone else to do something for you! Rights are unchangeable. If you live in a country of 6 billion people or on a desert island by yourself, your rights are the same. There’s no one to supply your housing or your health care or your food in the middle of the Alaskan wilderness by yourself, so those are not rights. But you still have the right of free speech and the right to keep and bear arms. In addition, according to the Constitution, Congress is not allowed to… Read more »

Tom Bodine
Member

EVERYTHING is free just vote for us.

Nancy Janzen
Guest
Nancy Janzen

Remember the last time Democrats addressed the housing crisis? Their solution created a bigger crisis causing many people to lose their homes including me.

Bad
Guest
Bad

Live within your income, you can’t expect to have your case of beer and your bag of dope and hard working sensible tax payers money too!

Douglas Nash
Member

Moore housing through the private sector. Government can help by reducing regulations and tax incentives!

Screwtape
Member

Remember the Leftist rule #1: Whine and complain because the problem can ONLY be fixed with the monies of others . I’m going to address Kamallama’s proposals because she’s the only one of these losers who standa a chance. Sure, throw money the symptoms and ignore the base problem, i.e. not enough housing or rentals. “Enabling” people to buy more house or rent more than they can afford has already been tried and failed. Remember NINJA or that little crash in 2008? Kamallama’s original proposal was supposed to be for blacks only and as a form of reparations. Someone probably… Read more »

Screwtape
Member

Econ 101. Not enough of something will drive up the price of that something.

Here’s a thought: relax obstructive regulations. Build more housing and STOP telling prospective builders/developers what they can charge.

e.g. Portland is suffering an affordable housing crisis because of massive regulations, the expenses and delays associated with red tape, and landlords are told how much they can charge.

It’s hypocritical that the city council is pushing for high-density housing (with no parking) in all neighborhoods BUT the ones they live in. How convenient for them.

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