During the Harris/Biden years the price of housing has increased significantly. To say it has exploded would be a fair statement. There are two principal reasons. Interest rates went up at a precipitous rate from 2.78% at the end of 2020 to 7.22% three years later. The cost of building materials during that period went up over 20%. Harris has presented a plan to counter this by adding 3,000,000 new homes over the time of her planned first term. Let’s take a look at this proposal.
There is a significant housing shortage in the United States. Allowing an estimated 10 million migrants into the country during the last four years has not been particularly helpful in dealing with the problem. In 2023, 1.54 million dwellings were built in America with about 1 million of those being single family residences. Despite that, Zillow estimated there is a housing shortage of 4.5 million in mid-2024. One can only suppose that Harris’ proposal is to increase production above the current levels. That has not been defined by her. The National Association of Home Builders (NAHB) would be delighted to build those homes but has been stymied from doing such.
If you go to Harris’ website this proposal is not on it as of the time I checked. That is despite the fact the campaign is running ads telling voters about her plan. On 9-22, Governor Jared Polis of Colorado was on Face the Nation with Margaret Brennan and talked about the housing program. He brought it up.
He suggested the plan was based on “reducing bureaucracy and cutting red tape making it easier to build new homes.” As is typical of our national press, there were no follow-up questions. A logical one would be how is she going to do that? Another would be “Governor Polis you have been in charge of a state with a growing population for five years. What have you done to cut bureaucracy and red tape to meet the needs of your state?” He did mention something about making the building of Accessory Dwelling Units (ADUS) more available. These were previously called granny units. From what I found as of the beginning of this year the total number that had been built in Colorado is zero units.
Ms. Harris should be familiar with this challenge. Her close political ally, Gavin Newsom governor of her home state, California, proposed a plan to build 3.5 million homes in California over the ensuing seven years when he took office in 2019. As was stated in the Orange County Register “We already have building costs of a new home approaching $100,000 in fees, permits, and regulations before the first nail is ever driven.” That may be a large part of the challenge for Newsom.
What have been his results? California’s municipalities have issued just under 555,000 permits since Gov. Gavin Newsom took office in January 2019, up from 509,000 permits during the five years preceding Newsom’s tenure. Virtually no results there. And those are mainly ADUs. Part of the problem is as was stated in the Los Angeles Times in 2022, “More than half a dozen affordable housing projects in California are costing more than $1 million per apartment to build, a record-breaking sum that makes it harder to house the growing numbers of low-income Californians who need help paying rent, a Times review of state data found.”
Harris has a much larger challenge than her friend, Governor Newsom. She is trying to tackle home building across the entire country. He has had battles with many counties and cities trying to stick state rules down the throats of local elected officials who consider housing their domain. Harris has chosen to confront elected officials in 3,244 counties and 35,705 municipalities across our country to attempt to do something never before done at a national level. She wants to eliminate red tape, fees and bureaucracy in all those jurisdictions somehow to get them to create more housing on an annual basis.
If we take her number of 3,000,000 new homes over her four-year term, that is 750,000 additional units per year or a 50% annual increase in production. As much as the NAHB would be delighted to build all those additional houses there are challenges they would face.
There is the significant shortage of qualified construction personnel the NAHB now faces. Then there is the ability to obtain supplies, lumber, piping etc., to be able to achieve that. One could surmise that this would create severe shortages of those goods which would then drive the cost of raw materials up significantly. That combined with the additional cost of labor in short supply would drive up the cost of housing which is contrary to Harris’ main goal of making more affordable housing.
In short, Ms. Harris, who personally has never been involved in the building industry and before marrying a wealthy attorney who had his own home, had owned one condo, has no clue what she is proposing. She thinks she can just make a grandiose statement like she has and, because we no longer have an analytical press corps, she can make it sound as if she really cares about an issue, she doesn’t have the foggiest about.
She is blowing smoke up the you know what of the American people. Don’t let her get away with this.
