In the race for the White House, housing seldom gets much attention — but that could be about to change.
As California and other states face dramatically rising rents and home prices, three of the top Democratic contenders in 2020 — Sens. Kamala Harris, Cory Booker and Elizabeth Warren — have already introduced major proposals in the Senate that would reshape affordable housing in America.
With California’s primary poised to play an unusually important role next year, and the state’s affordability crisis growing too big to ignore, more candidates could be pressured to take a stand on the issue as they hit the campaign trail from Berkeley to Beverly Hills.
“We’ve already seen more attention on housing and affordable housing policy in these first few weeks and months than we have in entire presidential campaigns in the past,” said Diane Yentel, president and CEO of the National Low Income Housing Coalition. She called the candidates’ plans more ambitious than any housing policies adopted by the federal government in “generations.”
The proposals — which include renter tax credits, ramped up federal funding for housing construction, and controversial moves to reform local zoning — would also cost tens of billions of dollars, the latest examples of 2020 hopefuls embracing ideas from the left.
Here’s how the candidates’ plans would work and what they would mean for Californians:
Federal tax law has long favored homeownership, doling out deductions for mortgage interest and property taxes. Harris and Booker’s plans would give renters a piece of the pie, guaranteeing tax credits for those spending more than 30 percent of their income on rent (including utilities). More than half of California renters pay at least that much, according to a Harvard University study, the highest rate in the country after Florida.
Under Booker’s bill, the Housing, Opportunity, Mobility, and Equity (HOME) Act, those cost-burdened renters would get a tax credit for the difference between 30 percent of their income and the rent they’re paying, up to the area fair market rent.
“We’ve gotten to a point in America where you see middle-class families spending 30, 40, 50 percent of their income just trying to provide housing,” Booker told an audience in New Hampshire this month. “What a shameful thing it is for us as a nation to have teachers who teach in communities and don’t get paid enough money to live in those communities.”
Harris’ bill, the Rent Relief Act, calls for a similar credit but is more focused on helping the poorest renters. As a taxpayer’s income increased, the amount of credit they received would decrease, and no one making more than $125,000 would benefit.
Both would cost a lot: $134 billion a year for Booker’s plan and $94 billion for Harris’ plan, according to a Columbia University analysis. Neither senator has said how they’d pay for it, although a Booker spokesperson said the senator was considering funding it by rolling back some provisions of President Trump’s tax cut bill.
Booker’s bill would lift 9.4 million Americans out of poverty, and Harris’ would do the same for 7.8 million, the Columbia researchers predicted. Still, some experts worry that the credits might encourage landlords to hike their rents, negating some of the benefits — especially in housing markets with tight supply, like the Bay Area.
Building more housing
Warren wants to attack high housing costs from a different angle. Her bill, the American Housing and Economic Mobility Act, would invest $50 billion a year in various efforts to build more homes and increase the supply of housing.
Most of that money would be sent to state housing agencies to fund the construction of more affordable apartments. The plan would help build 3.2 million new affordable housing units over 10 years, which would reduce rents nationwide by 10 percent compared with what they would be otherwise, according to an analysis of the bill by Moody’s.
“If you’re rich, there’s a lot of housing opportunities, but if you’re middle class, working class, working poor … there hasn’t been much new housing coming in,” Warren said at a campaign event in Iowa last month.
The Massachusetts senator’s bill would cost an average of about $50 billion a year. She plans to pay for it by lowering the exemption for the estate tax to the level it was in 2009 and increasing some rates, changes that would affect about 10,000 of the wealthiest families in the country.
Experts say Warren’s plan would do more to address the biggest root cause of high housing costs, the scarcity of homes. But this approach would be a lot slower than the tax credit — it would take years for the new housing to be approved and built, while the credit would help lighten renters’ financial burdens right away.
Reforming zoning laws
Both Warren and Booker’s proposals also take a crack at one of the thorniest issues in housing policy: local zoning. They would try to get cities to rewrite rules that make it difficult to build more housing, such as height limits, restrictions on multifamily housing or minimum parking requirements.
The two plans represent a carrot or stick approach. Warren’s bill would create a new batch of funding that cities can apply for and would win based on the most effective zoning reforms. Under Booker’s bill, cities could be denied federal Community Development Block Grants if they don’t submit strategies to reform their zoning rules in ways that would help build more affordable housing. About a third of California municipalities currently receive those grants, including all of the state’s big cities.
The proposals echo a controversial bill in the California Legislature that drew national attention but failed to pass last year, which would have overridden some local zoning rules preventing apartment buildings near transit stations. State Sen. Scott Wiener, the bill’s author, said he was “thrilled” to see presidential candidates trying to address the same issue.
“You have to have both the carrot and the stick,” Wiener said. “Financial incentives alone are never going to be enough, especially for wealthier cities.”
But Wiener’s bill sparked a firestorm of opposition last year, and the candidates’ proposals could face similar ire.
“What does a senator from New Jersey — or anywhere — know about the planning imperatives in West Hollywood?” asked Zev Yaroslavsky, a longtime former Los Angeles County elected official. “There’s a legislative bacchanal going on here where everybody wants to up the next guy on solving the housing problem, but this won’t do it.”
Reversing the legacy of redlining
Another interesting part of Warren’s bill is aimed at righting some of the historic wrongs of redlining. Until the 1960’s and 70’s, the Home Owners’ Loan Corporation designated many African-American neighborhoods as “hazardous,” making it all but impossible for most residents to qualify for mortgages. That helped expand vast divides in wealth between white and black households.
Warren’s bill would provide down-payment assistance for homebuyers in formerly redlined communities. To be eligible, residents must have lived in the neighborhood for more than four years and be subject to income limits. They would receive up to 3.5 percent of the home price.
Some observers have described the idea as a baby step toward reparations, an attempt to make up for America’s long history of racist policies. On the other hand, many formerly redlined urban neighborhoods — like big swathes of San Francisco’s Mission District or West Berkeley — are already deep in the throes of gentrification, with many of the minority families who were harmed by redlining being forced out. The proposal wouldn’t support former residents who’ve already moved away.
“Giving people in those neighborhoods a chance to remain there and solidify their roots is terrific,” said Carol Galante, a UC Berkeley affordable housing policy professor. “But we want to make sure we’re not helping just the white, educated millennials to be able to buy in those gentrifying neighborhoods.”
The political impact
Several polls have found Californians ranking housing and homelessness among the top issues facing the state. The Golden State’s primary is expected to play a more important role than usual in the 2020 race due to our earlier position in the calendar next year, so other candidates stumping for votes here could face pressure to lay out their own affordable housing proposals.
Sen. Bernie Sanders of Vermont also called for big investment in housing production during his 2016 campaign for president, while former Housing and Urban Development Secretary Julián Castro helped create new federal funding for housing when he led the agency during the Obama administration. Other Democratic presidential hopefuls and potential contenders are also working on similar bills that could be introduced over the next months.
The most effective plans, experts argued, would likely include both some sort of tax credit to help renters immediately as well as measures to increase housing supply in the long term.
“There is no silver bullet solution to solving the housing crisis,” Yentel said, “but I think a combination of these bills together could.”