The high cost of housing is one of the biggest problems America faces. It is more expensive to buy a home today than at any point in 40 years. And so Vice President Kamala Harris today gave her first major economic policy speech where said she would, as president, implement policies to build three million new housing units over her first four years in office. She says she’ll give $40 billion to local governments to subsidize more housing and $25,000 subsidies to first-time buyers.
But nothing Harris is proposing will have any impact on housing prices. That’s because nothing she is proposing will significantly increase the supply of housing. America built 20% fewer housing units in the 14 years since the 2008-2009 financial crisis than it did in the 14 years before that. To bring down prices, we need more housing. There’s no way around this. Fundamentally, we have a housing supply crisis, not a housing demand one.
And even if Harris’ plan did result in three million new housing units, that’s not nearly enough. In 2018, Governor Gavin Newsom promised to build 3.5 million units in California alone. And Zillow says that America is short at least 4.5 million units.
