As renters and would-be homeowners struggle with the high cost of housing, the Biden administration has announced policies to address this strain on household budgets.

That includes $100 million in funding for a program to incentivize affordable housing production and streamlining loan application processes to expedite building more housing.

Some of those proposals – such as a cap on rent increases from corporate landlords – call for Congressional action, while others are rules and grants that can be done without legislative approval. The U.S. Department of Housing and Urban Development will also be finalizing a rule to allow different kinds of housing, such as duplexes and triplexes, to be built under the agency’s manufacturing and safety standards.

The Biden administration and the Harris campaign are making their housing policy case to the American people as Vice President Kamala Harris and former president Donald Trump compete for voters’ trust on economic issues. An August Financial Times/Michigan Ross poll shows that Harris is slightly ahead of Trump when it comes to who voters trust more on the economy, by one percentage point. Although that is a very small advantage, it is a change from July, when 35% of voters approved of President Joe Biden’s job on the economy compared to 41% for Trump.

Plans would cut red tape, but housing stock is still low  

The administration’s plans to address supply and soaring prices also include repurposing federal land in Nevada and a cap on rent increases from corporate landlords, which would require Congressional action. Housing and homelessness experts say many of these changes are positive, particularly zoning changes, while others argue that a few of these actions are insufficient for the crisis at hand.

On Friday, Vice President Kamala Harris announced her plans for boosting housing affordability if she wins the presidency. Harris’ plans are similar to some of the Biden administration’s approaches to housing policy, with an emphasis on stopping corporate landlords from driving up rents and knocking down local zoning barriers to building affordable housing. She also announced a policy to provide up to $25,000 in payment assistance for first-time homebuyers on the condition that they paid rent on time for two years.

“We will take down barriers and cut red tape, including at the state and local levels, and by the end of my first term, we will end America’s housing shortage by building 3 million new homes and rentals that are affordable for the middle class,” Harris said at a campaign event in Raleigh, North Carolina on Friday.

Indivar Dutta-Gupta,who focuses on policy research and seminars at the Georgetown University McCourt School of Public Policy, applauded developments to make it easier and less costly to build affordable housing through the Pathways to Removing Obstacles to Housing program, which provides funding for communities getting rid of barriers such as “outdated” zoning policies and a “lack of neighborhood amenities.”

“It’s very difficult for a builder to just kind of copy and paste their plans from one community to another. Secondly, we’re not just talking about requirements for special permitting and land use that are tedious,” he said. “They’re time consuming and that dramatically increases the cost of housing, so if you can knock down a process that takes 12 months to six months, that can make a big difference for housing affordability.”

Kenneth Chilton, professor at the department of public administration at Tennessee State University, said there are certainly homes being built – just not enough affordable ones between $100,000 and $300,000 in the area he lives in Nashville. Wages have also not caught up to those prices, he added.

“The market has catered to the more affluent households, so there are new houses being built, but they’re million dollar-plus houses for people who can afford or are willing to put themselves in a financial burden to afford a million dollar house,” he said. “… It’s becoming harder and harder to afford the discretionary income needed to save up for down payment.”

The Biden administration and Congress has also focused more on corporate landlords of late, who are influencing the housing market. Dutta-Gupta and Chilton said that even in situations where they make up a smaller percentage of landlords, their practices influence other landlords and drive up rents.

Chilton, who has studied how firms that can quickly snatch up all kinds of properties can influence regional housing markets, said it’s hard for the average homeowner to compete.

“You have a lot more corporations and investors who are buying up housing,” he said. “Some of those are institutional, but there’s been recent reports that even smaller local landlords are kind of adopting the same business practices of one-year leases with built-in cost of living adjustments. They’re operating like corporate landlords.”

He said that none of the Biden administration proposals he saw accounted for potential homebuyers, who have to apply for loans, failing to compete with groups and investors making all-cash purchases without inspections. Democratic lawmakers have introduced legislation in Congress to limit corporate landlords’ power, but it has not passed.

Dutta-Gupta said the Biden administration’s recent efforts are putting “meaningful dollar amounts” into the quest for affordable housing through grant opportunities, even though they are probably below the demand.

He said he’s also heartened to see that the U.S. Department of Transportation is making sure its discretionary infrastructure grants give preference to communities with more “pro-housing policies,” to give localities more incentives to favor affordable housing. But he said the administration has to make sure it effectively communicates this through outreach.

“There’s going to have to be a meaningful effort to explain to the communities that there’s a new preference and this is how those communities can potentially fall into that category of the preference,” he said. “You don’t want to just let them know there’s a preference and then no change in behavior happens.”

Although Trump has talked about mortgage rates during his campaign, he hasn’t provided a lot of detail on housing policies. The Federal Reserve’s federal funds rate has an influence on mortgage rates and Trump has said the president should “have at least a say” in Fed policy. The Republican Party’s 2024 platform also includes a section on housing affordability, which mentions tax incentives to “promote homeownership,” allowing for new home construction on some federal lands, and reducing regulations that “raise housing costs.”

The challenge of keeping people housed

Given the challenges to building the supply of more affordable housing, the National Alliance to End Homelessness would like to see broader policy approaches to prevent more people from becoming homeless. Homelessness reached a record high in 2023.

Although the Biden administration has taken steps to expand housing access for groups particularly vulnerable to homelessness, such as veterans and survivors of intimate partner violence, Steve Berg, chief policy officer at the National Alliance to End Homelessness, would like to see more of a universal approach, such as housing vouchers that meet the scale of the need. He said targeted emergency rental assistance combined with eviction moratoriums in places where homelessness is particularly high and rising quickly would also be effective at reaching the people who need it most.

“The eviction moratorium combined with subsidies for landlords to help when people got behind on their rent were very effective interventions,” Berg said of earlier pandemic policies to keep people housed.

Why political leaders are focused on housing

The Federal Reserve has signaled it is close to cutting key interest rates as inflation has slowed and the housing market has begun to cool in response to high mortgage rates. The Fed started to raise interest rates in 2022 and hiked them 11 times until late 2023, putting pressure on the housing market during a time of high demand for housing and a shortage of affordable homes.

In May, U.S. rent growth was up 3.2% from a year ago, which was the biggest gain there has been in more than a year, according to CoreLogic’s single family rent data. A lack of housing affordability is also closely tied to homelessness. From 2019 to 2023, the number of people who had to go to emergency shelters for the first time rose more than 23%, a 2024 report from the National Alliance to End Homelessness shows.

“The Federal Reserve primarily slows the economy by making construction of residential housing, and generally taking out loans, more costly. People are certainly experiencing the higher cost of housing right now due to the higher interest rates, so the timing [of the policies] may be fortuitous,” Dutta-Gupta said.