Kamala Harris’s promise to tackle housing costs addresses a burden that is dampening enthusiasm for the presidential campaign among core Democrats, such as young people, racial minorities and low-income voters.

The rise in rents and mortgage rates since the pandemic has created enormous financial inequalities and driven up costs for renters, prospective buyers and new home buyers – three groups that are disproportionately among the most important Democratic-leaning groups that Harris must inspire to defeat her in November.

Innovation Fund

Harris took aim at these hardships in her economic report released Friday: She called for a $40 billion housing innovation fund, a $25,000 tax credit for first-time home buyers and supported legislation to prevent “corporate landlords” from buying up homes in bulk and driving up rents.

“By the end of my first term, we will end America’s housing crisis by building three million new homes and rental apartments that are affordable for the middle class,” Harris said in a speech in the swing state of North Carolina.

Housing affordability is a key election issue for both Generation Z and Millennials. For the two youngest groups of voters, it ranked just behind overall inflation in the Bloomberg News/Morning Consult swing-state poll in late July in the presidential election.
The feeling that homeownership is becoming out of reach is especially stressful because this stage of life is so closely tied to notions of the American Dream – building wealth and raising a family. It has become an increasingly pressing concern as housing costs have soared and inflation has eaten into disposable income.

This has exacerbated the divide between long-term owners, who are often older and have benefited from the boom in home equity values ​​while paying the lower monthly payments they could afford when mortgage rates were much lower.

Suggestions on housing costs

Even before Harris made her recent proposals on housing costs, voters in swing states had more confidence in her than in Joe Biden to address the problem. According to the poll, she was ahead of Donald Trump on the issue by a statistically insignificant percentage point, while Biden was six percentage points behind the Republican in early July.

Tom Diehn, 33, an industrial maintenance manager at an organic food company, has been unable to leave the 800-square-foot house he rents in a Milwaukee suburb, even though he wants to cut down on his commute. Rents for any suitable alternatives are “exorbitant,” he says.

He sees Biden and Trump, both baby boomers, the products of an earlier generation that took for granted that they could easily buy a home on a salary. In Harris and Democratic vice presidential candidate Tim Walz, who are 59 and 60 respectively, he sees younger leaders with a better sense of the problems facing Americans stuck in a bleak rental market.

“They at least have the opportunity to educate themselves a little bit more,” said Diehn, an independent who voted for Trump in 2016 and Biden in 2020 but was not enthusiastic about either man this year.

With Harris and Walz on the ballot, “I’m a little more enthusiastic,” he said.

But Democrats’ support among renters has waned, with average rent in the U.S. rising 47% since the second quarter of 2019, according to the Census Bureau. Affordability is worse than ever: Half of all renters are considered cost-burdened, spending more than 30% of their income on housing and utilities, according to Harvard University’s Joint Center for Housing Studies.

At the same time, real estate prices are rising rapidly. The median sales price for existing homes reached a record high of $426,900 in June, according to the National Association of Realtors.

Milwaukee, the largest city in the key swing state of Wisconsin, is the Midwest’s most rent-burdened city, and it’s where the highest share of revenue goes to housing, Realtor.com found.

Megan Montgomery, a 39-year-old customer success manager from Milwaukee, is exactly the kind of voter Democrats are trying to reach. She had planned to move out of her apartment when the rent increased by $280 a month last year, but couldn’t find a suitable one she could afford.

“I have to rent because I can’t buy a house,” Montgomery said. Everything you can afford in a safe neighborhood is “so beat up and broken that it’s not worth trying to save.”

Impact on housing costs

Montgomery, a Democrat who voted for Biden in 2020, likes Harris more than Biden but expressed concern that the vice president will have no influence on housing costs.

Support for the Democratic Party among renters is far below the overwhelming margin Biden won in 2020. In the last presidential election, they voted 67% for Democrats and 30% for Democrats, according to an analysis of American National Election Studies data by Apartment List.

In Bloomberg’s monthly poll conducted July 24-28 in the seven key swing states, Harris led Trump among renters, 55 percent to 38 percent. Nearly half of renters said housing costs were one of the three most important factors in their choice, compared with 21 percent of homeowners.

Renters are generally harder to get to vote. According to the Census Bureau, renter turnout was 16 percentage points lower than homeowners in the last presidential election, and 18 percentage points lower in the 2016 election.

Trump has focused on the threats he sees liberal policies to encourage the construction of more affordable housing pose to suburban areas. His message on housing actually has nothing to do with affordability, but rather with keeping neighborhoods in their current state, said Daryl Fairweather, chief economist at Redfin.

Trump campaign press secretary Karoline Leavitt said in a statement that “the Biden-Harris agenda has put the American dream of homeownership out of reach for families across the country” and that “thankfully, President Trump has promised to cut spending, cut taxes and reduce costs.”

Democratic activists and pollsters say Harris has a chance to rejuvenate a key part of the Democratic coalition for 2020 by highlighting the Biden administration’s cost-cutting efforts.

“Rent is the most important economic issue of our time,” said Tara Raghuveer, director of the Tenant Union Federation.