Published by REALTOR.com | October 1, 2024
On the campaign trail, Vance and Walz have staked out their respective positions on the housing crisis, for the most part differing widely on its causes and solutions.
What J.D. Vance has said about housing affordability
In a speech at the Republican National Convention, the senator from Ohio cast Wall Street investors and immigrants as the major villains of the U.S. housing market.
“The absurd cost of housing is the result of so many failures. … I can tell you exactly how it happened,” said Vance. “Wall Street barons crashed the economy and American builders went out of business. As tradesmen scrambled for jobs, houses stopped being built.
“The lack of good jobs, of course, led to stagnant wages. And then the Democrats flooded this country with millions of illegal aliens. So citizens had to compete with people who shouldn’t even be here for precious housing,” he continued.
Echoing Trump’s position, Vance has repeated this point on the campaign trail, saying immigration is a major culprit for rising home prices.
“When I talk to Americans, one of the biggest concerns I hear is, ‘Why are housing costs so high?’ I’ll give you two reasons: First, there are 20 million illegal aliens who shouldn’t be here and who are competing with Americans for scarce homes,” Vance told Fox News host Sean Hannity in August. “Second, Kamala Harris has supported higher interest rates, which makes mortgages unaffordable for most people.”
However, Realtor.com® senior economist Ralph McLaughlin expressed skepticism that immigration restrictions would have a significant impact on home prices, calling it a “band-aid solution.”
“There is pretty strong consensus among housing economists that the primary structural problem in the U.S. housing market stems from a very long period of underbuilding homes in this country due to unnecessarily strict land use regulations,” says McLaughlin.
Because of these restrictions, he adds, housing prices have surged as demand rises, but rising prices haven’t spurred enough increased production to balance the market.
“So while a band-aid solution would be to reduce aggregate demand for homes, getting to the root of the problem involves sorting out supply-side issues instead,” he says. “Thus, we welcome any serious political discussions at the national, state, and local levels on how we as a society might address the root cause of the housing undersupply problem.”
On a recent call with investors, Stuart Miller, the executive chairman and co-CEO of homebuilder Lennar, also noted that immigration has multiple conflicting effects on the housing supply, since immigrants are a major contributor to the residential construction workforce.
“On one hand, the influx of immigrant population has expanded the labor pool and therefore offset the pressure on construction cost increases,” he said. “On the other hand, the increase in population requires more supply of dwellings to house that growing population.”
What Tim Walz has said about housing affordability
Walz is unique, and possibly alone among recent candidates on major presidential tickets, in that he does not own a home.
When he took office in 2019, the Minnesota governor sold his family’s home in Mankato, MN, for $304,000, below the $315,000 asking price. The six-bedroom home, which he bought in 1997, is the only house he had ever purchased.
Still, Walz has burnished his homeowner credentials on the campaign trail by talking fondly about home maintenance, and in particular his passion for well-maintained gutters.
“I try not to be judgmental on people, but when I see a well-tended gutter, it says a lot about somebody,” he told a podcaster in August.
In interviews, Walz has touted Harris’ housing plan, which calls for tax credits to spur the construction of 3 million new homes and federal down payment assistance of $25,000 for first-time buyers.
He has noted that he bought his Mankato home using a VA loan, which did not require a down payment, and says that more families should have the opportunity to get a mortgage without a large up-front payment.
“What we know is that housing is foundational to everything. It’s foundational to a family stability. It’s foundational school achievement, and we know that it’s the path to generational wealth,” Walz told Michigan public radio station WCMU last month. “You start people out with this, it gives them the foundation to get in. That foundation allows them to build on it. And what we end up seeing is we see wealthier communities with more money invested back into me, see a broader tax base, which means lower property taxes for everybody.”
However, many economists have warned that widespread down payment assistance would fuel price increases for homes, unless supply expanded dramatically first.
