Personal Finance
Kamala Harris has supported affordable housing in the past
Vice President Kamala Harris speaks on the South Lawn of the White House in Washington, D.C., on July 22, 2024.
Ting Shen | Bloomberg | Getty Images
Harris’ record on housing issues
As attorney general for California, Harris drafted and helped pass the California Homeowner Bill of Rights. It is a set of laws designed to protect homeowners from unfair practices. The California Homeowner Bill of Rights became law on Jan. 1, 2013.
Harris secured an $18 billion agreement as part of a national multistate settlement to benefit thousands of homeowners who lost their homes due to improper foreclosure or fraud in 2012.
As senator, Harris introduced the Rent Relief Act in 2018, a bill that offers tax credits to renters who earn below $100,000 and spend more than 30% of their income on rent and utilities.
Harris resubmitted a second variation of the bill in 2019, which includes a mechanism from the Treasury to pay the tax credit on a monthly basis to eligible households. The latter version also caps the credit at 100% of small area fair market rents instead of 150% of FMR.
Harris last month announced the recipients of an $85 million grant under the Pathways to Removing Obstacles to Housing, or PRO Housing, a first-of-its-kind project through the U.S. Department of Housing and Urban Development aimed to increase building activity and lower housing and rental costs for families in the U.S.
That news came on the heels of a May announcement from Harris budgeting $5.5 billion through the HUD to boost affordable housing, invest in economic growth, build wealth and address homelessness in communities across America.
Such policies come at a time when the country is facing rising homelessness rates and burdensome costs to buy or rent. In 2023, a record 653,100 people experienced homelessness in 2023, up from 256,600 the year prior, according to a report by the Harvard University Joint Center for Housing Studies.
‘There’s potential for a lot of good’
The latest housing policies the Biden administration has rolled out generally aim at increasing the supply of affordable housing and lowering costs for buyers and renters.
Harris has been involved in Biden’s housing policy-making, and it is likely that her campaign will carry on similar blueprints for housing, experts say.
“Generally speaking, it does seem like affordable housing, zoning has been something that has been a talking point of hers for a while now,” said Jacob Channel, a senior economist at LendingTree. “If they keep on the same course that the Biden administration was on, I think there’s potential for a lot of good.”
As a Harris candidacy begins to look more likely, people have been talking about a policy Harris originally floated in her 2020 presidential campaign: the LIFT the Middle Class Act.
The bill would give a refundable tax credit of up to $3,000 per person, or $6,000 per married couple that files joint tax returns, for qualifying middle- and working-class Americans.
Some experts point out the LIFT Act might be better for renters than the 5% rent cap increase Biden proposed in mid-July.
The proposal calls on Congress to cap rent increases from landlords with 50 existing units or more at 5% or risk losing federal tax breaks.
“The concern with the rent cap is that the supply of housing would change,” said Francesco D’Acunto, an associate professor of finance at Georgetown University.
While the rent cap may lead consumers to believe prices will not increase more than a certain amount, it could lead to negative side effects, such as landlords taking their properties off the rental market, said Karl Widerquist, an economist and professor of philosophy at Georgetown University.
Landlords who lose access to tax breaks will still be able to raise rents and the plan would exclude new construction and buildings undergoing major renovations, Channel explained.
The tax credit would not create the same distortions as the rent cap, and it also targets the negative effects of rent inflation, D’Acunto said.
Harris’ LIFT the Middle Class Act has received pushback in the past. While it is not a perfect policy, the LIFT Act is “essentially an expansion in the right direction,” Widerquist said.
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The U.S. job market has undergone a dramatic transformation in recent years, from one characterized by record levels of employee turnover to one in which there is little churn.
In short, the “great resignation” of 2021 and 2022 has morphed into what some labor economists call the “great stay,” a job market with low levels of hiring, quits and layoffs.
“The turbulence of the pandemic-era labor market is increasingly in the rearview mirror,” said Julia Pollak, chief economist at ZipRecruiter.
How the job market has changed
Employers clamored to hire as the U.S. economy reopened from its Covid-fueled lull. Job openings rose to historic levels, unemployment fell to its lowest point since the late 1960s and wages grew at their fastest pace in decades as businesses competed for talent.
More than 50 million workers quit their jobs in 2022, breaking a record set just the year prior, attracted by better and ample job opportunities elsewhere.
The labor market has gradually cooled, however.
The quits rate is “below what it was prior to the start of the pandemic, after reaching a feverish peak in 2022,” said Allison Shrivastava, an economist at job site Indeed.
Hiring has slowed to its lowest rate since 2013, excluding the early days of the pandemic. Yet, layoffs are still low by historical standards.
This dynamic — more people stay in their jobs amid low layoffs and unemployment — “point to employers holding on to their workforce along with more employees staying in their current jobs,” Shrivastava said.
Big causes for the great stay
Employer “scarring” is a primary driver of the so-called great stay, ZipRecruiter’s Pollak said.
Businesses are loath to lay off workers now after struggling to hire and retain workers just a few years ago.
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But job openings have declined, reducing the number of quits, which is a barometer of worker confidence in being able to find a new gig. This dynamic is largely due to another factor: the U.S. Federal Reserve’s campaign between early 2022 and mid-2023 to raise interest rates to tame high inflation, Pollak said.
It became more expensive to borrow, leading businesses to pull back on expansion and new ventures, and in turn, reduce hiring, she said. The Fed started cutting interest rates in September, but signaled after its latest rate cut on Wednesday that it would move slower to reduce rates than previously forecast.
Overall, dynamics suggest a “stabilizing labor market, though one still shaped by the lessons of recent shocks,” said Indeed’s Shrivastava.
The great stay means Americans with a job have “unprecedented job security,” Pollak said.
But those looking for a job — including new college graduates and workers dissatisfied with their current role — will likely have a tough time finding a gig, Pollak said. She recommends they widen their search and perhaps try to learn new skills.
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