Home builders tell VP Harris her housing plan needs to address regulatory barriers
The National Association of Home Builders (NAHB) responded to Vice President Harris' housing plans that were unveiled Friday as part of her economic agenda and found that while some elements of the proposal are positive, it fails to address a key policy area holding the housing sector back.
Harris' plans featured up to $25,000 in down payment assistance for first-time homebuyers, which she said would be provided to more than four million people over four years if she wins the presidency. She also called for building three million new housing units and would provide tax incentives for the construction of new homes for first-time buyers and a $40 billion home construction innovation fund.
Carl Harris, chairman of the NAHB and a custom home builder from Wichita, Kansas, said in a statement that while the vice president's focus on housing and homeownership is "commendable," her plan doesn't address regulatory barriers that impede the industry from building more inventory.
"Unfortunately, the plan makes no mention of reducing onerous federal regulations that add to the 24% cost burden on single family home construction or the almost 41% increase on the construction of a multifamily unit," he explained.
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"Further, on the heels of President Biden's rent cap proposal, NAHB is concerned that efforts to target institutional investors will harm the growing single-family built for rent market, specifically those homes built for the rental market, further disincentivizing housing production that is otherwise desperately needed," he added.
NAHB's statement said the tax credit for construction of new homes and apartments, as well as the down payment assistance and expanded tax credit for first-time homebuyers, would be helpful for boosting demand.
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"A tax credit to help builders construct more entry-level housing and expanding and strengthening the Low-Income Housing Tax Credit will help builders to construct badly needed new homes and apartments," NAHB's Harris said.
"But any tax incentive to support the production of starter homes must be targeted to local market conditions and be widely available. A $10,000 tax credit for first-time buyers and $25,000 down payment assistance are positive demand incentives, but the plan must weigh more heavily on boosting supply because the nation faces a shortfall of roughly 1.5 million housing units," he added.
NAHB's Harris pointed to the group's own plan as a blueprint for the vice president to take a more comprehensive approach to issues facing America's housing market.
"NAHB's 10-point plan to ease America's housing affordability challenges focuses on removing the impediments that are preventing builders from increasing the nation's housing supply, which include eliminating excessive regulations, fixing building material supply chains, and adopting reasonable and cost-effective building codes, among other things," Harris wrote.
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"Addressing these concerns would help the vice president achieve her goal of building 3 million new housing units," NAHB's Harris said. "NAHB looks forward to working with Democratic and Republican lawmakers at all levels of government to put into place policies that will allow builders to increase housing production and enable more hardworking families to achieve homeownership and rental housing opportunities."
FOX Business' Breck Dumas contributed to this report.