Real estate has been a hot button topic for the majority of the 2020 election cycle. With Covid-19 pushing many people to the cusp of losing their homes or apartments, it is easy to see why real estate has been such an important topic. In addition, issues such as wage stagnation, gentrification, and twenty years of low housing production have negatively affected the residential housing market. To combat the ballooning of home prices, President-elect Joe Biden has already said during his campaign trail that he wants to help more Americans achieve homeownership, address racial discrimination in real estate, and asset struggling renters. Though Biden may have a difficult time working on each of these policies—especially if the Republicans maintain control of the Senate—it is important to understand how Biden’s policies could affect the housing market.
Help More Americans Achieve Homeownership
The main focus on Biden’s $640 billion housing plan that his campaign debuted in February was to help a larger percentage of Americans achieve homeownership. To achieve this goal, Biden is proposing to give first-time homebuyers a tax credit as high as $15,000 to help with the down payment of their home. What makes this plan so unique is that homebuyers can actually use this money at the time of purchase. As home prices have risen significantly across the United States in recent years due to low-interest rates and a low supply of affordable housing, this policy could drastically help many people.
The current median home list price in the United States is $350,000. Thus, by following traditional advice, homebuyers would be required to pay anywhere between $35,000 – $70,000 for a down payment on a home. Even before the current economic crisis, many people did not have anywhere close to this amount in savings.
Biden’s campaign has publicly stated that they recognize these issues and want to do what they can to make homeownership more realistic for people. In addition to assisting first time home buyers, Biden’s campaign has also stated that teachers, first responders, and other public and national service workers will be able to receive down payment assistance. However, for someone falling into any of these categories to receive assistance, they would have to purchase a home in a struggling, low-income, or more expensive neighborhood that does not offer many reasonably priced options.
Finally, while giving tax credits to people in certain demographics may be the main cog in Biden’s housing plan, it will be difficult for him to pass these measures even if the Democrats hold the other branches of government.
Address Racial Discrimination in Real Estate
The racial housing gap has led to lower homeownership rates for communities of color—and thus lower household and generational wealth. The first way Biden is looking to close this gap is to create a national standard for appraising homes to make sure that houses in communities of color would not be assessed for less than comparable homes in white communities. While this mandate could help close the gap, it will not entirely fix the issues. The reason for this is that buyers ultimately decide how much they are willing to pay for a home.
In addition to creating this mandate, Biden has also thought about creating a public credit agency. This agency would raise the credit scores of minority homebuyers. This score increase would focus on things such as rental payment and utility bills history. By creating this agency, Biden could help minorities qualify for lower interest rates and mortgage fees.
Another potential Biden policy would be to require or at least incentivize state governments to remove certain housing regulations. These regulations typically segregate neighborhoods as they make it more difficult for builders to create affordable housing. Finally, Biden has stated that he wants to cut the carbon footprint of American buildings in half by 2035. If passed, this would help minority communities as it would lower the cost of certain utilities.
Asset Struggling Renters
The final major point in Biden’s plan is to help struggling renters keep their apartments. To achieve this goal, Biden wants to increase funding to Section 8 vouchers. Thus, allowing every low-income American who qualifies for the program would receive assistance. This would be a major improvement to the program as 25 percent of households eligible for waivers don’t receive them. In addition to funding this program, Biden plans on offering low-income renters tax credit. This tax credit would cap their housing costs to 30 percent of their income. At the same time, Biden will also continue the eviction stoppage that President Trump began.
Another policy to asset struggling renters is Biden’s pledge of $100 billion to create affordable housing. This would inherently lower the cost of rent in poor neighborhoods. It may additionally help those who are struggling to pay rent possibly take on a more affordable mortgage payment. He also wants to create more housing options for the disabled, elderly, and previously incarcerated.
Finally, Biden wants to curb the homelessness crisis by providing additional funding to homeless shelters and case management services. Additionally, he will prevent shelters from receiving federal funding if they turn away the lesbian, gay, bisexual, and transgender community.
Final Thoughts
With many potential changes in the works concerning housing, you must understand Joe Biden’s real estate campaign promises. Bach of Biden’s policies could positively affect those in need of affordable housing options. However, each of these mandates will likely take time—and receive significant pushback—especially if Republicans maintain control of the Senate. Thus, be sure to continually check for any updates out of the Biden campaign concerning their housing policies.
Contact Our DC Law Office for More Information
Finally, for more information regarding Joe Biden’s real estate campaign promises, contact us at 202-803-5676. You can also directly schedule a consultation with one of our skilled attorneys. Additionally, for general information regarding real estate law, check out our blog.