The issue of housing affordability, or more pointedly, its significant absence, has subtly emerged as a pivotal concern in the current presidential race. The term "subtly" is employed here to highlight the prolonged period during which this topic has been overlooked by both the administration and mainstream media channels.
A recent survey conducted by Redfin, a real estate brokerage, indicates that the muted discourse surrounding the affordability of housing might influence the outcome of Biden's campaign for a second term. The survey revealed that a notable majority of American homeowners and renters (53.2%) acknowledged that their voting decision in the forthcoming presidential election would be affected by their views on housing affordability. Moreover, a larger fraction (64.2%) expressed that concerns over housing affordability contributed to their pessimistic outlook on the nation's economy. This survey engaged close to 3,000 participants across the United States.
Daryl Fairweather, the Chief Economist at Redfin, remarked, "The forefront of voters' minds is occupied by housing affordability due to the combined effect of high mortgage rates, soaring home prices, and a pronounced shortage of housing. This has rendered the American dream of homeownership elusive for a vast segment of the population. Despite the economy's robust performance on paper, numerous families are not experiencing its benefits due to the affordability crisis in housing, leaving them feeling trapped and unable to pursue desired changes or improvements in their living situations."
Currently, President Biden attributes the lack of affordable housing options, both for homeownership and rentals, to policies of the previous administration led by President Trump. Just before his recent State of the Union address, an official statement from the White House articulated, "President Biden is of the view that housing costs are exorbitantly high, necessitating substantial investments to rectify the significant shortage of affordable housing—a situation that has deteriorated over more than a decade and was inherited from his predecessor."
Furthermore, with the announcement of Housing and Urban Development Secretary Marcia Fudge's resignation, a White House statement quoted the president, "Upon entering office, we were met with a housing system in disarray, with fundamental fair housing and civil rights safeguards severely weakened by the prior administration."
However, pinning the blame solely on Trump's administration seems unlikely to be a viable strategy. Having occupied the Oval Office for over three years, Biden's administration has been criticized for not taking substantial measures to tackle the housing affordability crisis. The issue was only recently acknowledged in a State of the Union address, where it was somewhat lost amid a broader narrative that also pointed fingers at the title insurance industry and "big landlords" for exacerbating affordability issues through alleged antitrust violations and price manipulation. The address also hinted at modest tax credit initiatives, which critics argue should have been introduced earlier in his tenure rather than months preceding an election.
Carl Harris, President of the National Association of Home Builders, expressed frustration with Biden's approach, emphasizing post-State of the Union, "Our organization is eager to collaborate with both the administration and congressional leaders from both parties to contribute towards solving this issue. This involves cutting down on unnecessary regulations, resisting expensive energy codes that inflate housing costs without significant energy savings, promoting skilled trade careers, and overcoming permitting obstacles. Such pragmatic approaches are crucial to curbing housing expenses, diminishing inflation, enhancing accessible housing production, and stabilizing the economy."
Echoing this sentiment, Daryl Fairweather of Redfin highlighted the critical need for increased housing supply to mitigate the affordability crisis. "Addressing housing affordability fundamentally requires boosting supply," Fairweather asserted. "Should President Biden's proposal to construct two million homes in the coming years come to fruition, it would significantly alleviate the affordability issue."
Biden's prolonged inattention to the housing market's challenges might have severe implications if the insights from Redfin's survey hold true. It seems the defining moment will be when the metaphorical 'rubber meets the road', potentially marking the end of Biden's tenure in the White House come next January.
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