Happy Tuesday and welcome to another edition of Rent Free. This past week's news has been dominated by questions about whether President Joe Biden will remain the Democratic candidate for president or drop out in favor of a younger, healthier alternative.
I tend to agree with my colleague Robby Soave that Biden isn't going anywhere.
Whether or not he does stick around, I figure now is as good a time as any to take a longer look at the president's housing policy record over his first term, how that stacks up with former President Donald Trump's own time in office, and what we might expect from both men in a second term.
Obviously, housing hasn't been the main issue in the 2024 campaign. Still, elections have consequences, even for housing policy. This week's newsletter tries to flesh out what those consequences will be.
Joe Biden's Housing Record
The federal government has little direct say over the land use regulations that impact housing production the most. Zoning, permitting, environmental reviews, impact fees, building codes, and more, are all mostly set at the state or local level.
Nevertheless, the Biden administration has shown some interest in prodding local and state governments in a more pro-supply direction.
Biden has said the country needs millions of new homes to bring housing costs down. His administration has released numerous "housing supply action plans" aimed at boosting housing production.
Having a White House that at least recognizes the country's need to build more housing is a good thing. On a practical level, however, the White House's efforts to encourage zoning reform have been a big flop.
Zoning Reform Flops
In 2020, Biden campaigned on a (relatively) aggressive policy of conditioning major federal housing and transportation grants on localities liberalizing their land use regulations.
Once in office, the administration scaled back these plans considerably.
A "Housing Supply Action Plan" released by the White House in May 2022 called for retooling a handful of smaller, discretionary transportation grant programs to factor in localities' pro-supply policy changes when selecting awardees.
No one really expected those changes to move the needle much on housing supply. The list of eventual grantees offered little evidence that the White House was spending much time looking at jurisdictions' housing production stats when awarding money.
For instance, San Francisco received a $20 million grant from the Rebuilding American Infrastructure with Sustainability and Equity (RAISE) program—one of the ones allegedly retooled to focus on zoning reform—a few days after the state of California announced they'd be auditing the city's atrociously slow, unproductive housing policies and practices.
In budget requests to Congress, Biden's Department of Housing and Urban Development (HUD) proposed a $10 billion grant program to incentivize reductions in "affordable housing barriers."
A program of that scale didn't happen. But Congress did eventually allocate $85 million for a Pathways to Removing Obstacles to Housing (PRO) grant program.
The statutory language creating the PRO grant program gave HUD a huge amount of discretion to decide which jurisdictions would get this relatively small pot of money.
Nevertheless, few of these grants have gone to jurisdictions that have made productive changes to their housing laws. As last week's Rent Free covered, several cities were given money for adopting "inclusionary zoning" policies that act as a tax on new housing production.
Biden's Fair Housing Re-Regulation
While the federal government has little responsibility over zoning policy, it does play a much larger role in policing housing discrimination.
The federal Fair Housing Act prohibits "discrimination on the basis of race, color, religion, sex, disability, national origin, or familial status (the "protected classes") in the sale, rental, or financing of dwellings and in other housing-related activities."
The actual text of the Fair Housing Act is pretty short, leaving the president with pretty broad authority to define what counts as housing discrimination, and craft regulations to enforce those definitions.
On this front, Biden has been an aggressive re-regulator.
He's revived Obama-era "disparate impact" regulations (scrapped by Trump) that ban housing practices that have a discriminatory effect on those protected classes, even when there's no discriminatory intent.
The Biden administration has issued regulatory guidance declaring that landlords' blanket refusal to rent to someone with a criminal record violates the Fair Housing Act. It's also given out grants to fair housing organizations that make a business of suing housing providers for having policies with an allegedly disparate impact, such as not renting to people with past evictions.
Reasonable people can disagree about the proper scope of federal fair housing laws. Nevertheless, the less landlords are able to decide for themselves if they want to rent to people with criminal and/or eviction histories, the riskier the rental business becomes for them. On the margins, that will mean fewer people end up renting out their properties.
Biden's Other Policies That Make Housing More Expensive
There are a lot of federal policies that don't directly regulate housing but can still have a major impact on how much housing costs and how much of it gets built.
Biden, often with the acquiescence of both parties in Congress, has been a profligate spender. His administration has added $4.3 trillion to 10-year borrowing costs, according to the Committee for a Responsible Federal Budget.
All that additional spending and debt has helped to drive up inflation during his first term, in turn prompting the Federal Reserve to hike interest rates. The upshot of that is that it's much more expensive to borrow money to buy a new home.
When fewer prospective homebuyers can afford financing, less new housing gets built.
The Biden administration has also hiked tariffs on Canadian lumber and Chinese steel. Higher tariffs on materials needed for home construction naturally mean higher home construction costs. The knock-on effect of that is higher home prices and lower rates of housing production.
In his State of the Union speech, Biden also accused landlords of "price-fixing" to drive up rents. His administration has said that the use of third-party rent recommendation software violates federal anti-trust laws.
In fact, rent recommendation software often encourages landlords to slash rents more quickly when demand falls. To the extent that software is telling property owners to raise rents, it's because demand is rising and zoning laws prevent supply from keeping pace.
The Trump Alternative
Yesterday, the Republican Party released its 2024 platform to "Make America Great Again." It includes a plank on housing affordability that would seem to include a few productive ideas.
"To help new home buyers, Republicans will reduce mortgage rates by slashing Inflation, open limited portions of Federal Lands to allow for new home construction, promote homeownership through Tax Incentives and support for first-time buyers, and cut unnecessary Regulations that raise housing costs," reads the platform.
Minus the language about tax incentives (and the random capitalizations), that all doesn't sound too bad.
Huge portions of lands in western states are owned by the federal government, and thus off limits to new development. In places like Las Vegas and Salt Lake City, federal lands act as de facto urban growth boundaries.
Opening up federal lands to housing construction is an under-discussed, underrated idea for increasing housing production. Sen. Mike Lee (R–Utah) has proposed a bill that would do just that. (Trump has also floated a more fantastical proposal to create new "freedom cities" on federal land.)
Trump's record on housing policy during his first term doesn't inspire much optimism.
Trump's Terrible Zoning Rhetoric
Zoning reform is a bipartisan issue. For Donald Trump, it's a bipolar issue as well.
During his first term, our first developer president went from proposing solid YIMBY-inflected policies to running for re-election as the nation's NIMBY-in-chief.
Early in his term, Trump's HUD Secretary Ben Carson promised localities could get more federal grants by reducing regulations on apartment construction.
Then in 2020, Trump reversed course sharply. In campaign season op-eds, tweets, and speeches, the former president started warning that Democrats wanted to end the "suburban lifestyle dream" by ending single-family-only zoning and forcing multi-family development onto low-density neighborhoods.
In terms of policy, this rhetorical switch had only a small impact. Trump dropped plans to use federal housing rules to encourage land use regulation, instead choosing to give out HUD grants with no strings attached.
That was more of a missed opportunity than a huge blow to housing production. Rhetorically, it's incredibly unhelpful to have a president go out of his way to lionize zoning regulations specifically because they stop new apartments.
Spending, Tariffs, and Deregulation
Under Trump, the White House repeatedly asked Congress to cut spending on federal housing programs. The actual budgets Congress approved grew these programs instead. It was the same story across the federal government.
While Biden has a bad record on debt and deficits, Trump's was even worse. During his four years in office, Trump signed into law $8.4 trillion in new debt. Close to $5 trillion of that had nothing to do with emergency COVID-19 aid.
While inflation spiked under Biden, Trump's deficit spending didn't help matters. He too bears responsibility for the higher inflation, higher interest rates, and higher mortgage costs we're experiencing now.
On tariffs, there's little daylight between Trump and Biden. The Trump administration also hiked tariffs on lumber, steel, and other building materials, helping to drive up the costs of housing.
Elements of Trump's deregulation drive likely had a more positive effect on housing supply and housing prices. His efforts to limit the scope of federal clean water rules would make some greenfield development more feasible. His paring back of Obama-era "disparate impact" regulations lessened legal liabilities for housing providers.
Mass Deportation as Housing Policy
While the 2024 GOP platform has some good housing policy ideas, it also has an incredibly worrisome idea. In a couple of places, the platform suggests housing can be made more affordable by deporting "illegal immigrants" and tightening immigration restrictions. Trump himself has promised to deport millions of people.
Whatever other criticisms one might level at Trump's mass deportation plans, it is true that they would reduce demand for housing. But they would also likely reduce the supply of housing. While immigrants live in houses, they also build a lot of them.
If we want to see more homes getting built, it would be incredibly counterproductive to deport the people who'd actually do that work.
Four More Years?
The benefit of Trump and Biden each having already been president for one term is that we have a pretty good idea of how both candidates will perform in office.
Rhetorically at least, they're very different. The Biden administration talks a good game about zoning reform and the need for new housing supply. Trump has a history of defending the most restrictive zoning regulations specifically because they stop new apartment construction.
On more concrete policies, there's not too much daylight between both candidates. The Biden administration wants more expansive federal fair housing regulations. The Trump administration wants looser ones.
Both men support tariffs that drive up construction costs. Both support runaway spending that drives up interest rates and mortgage costs.
Biden likes to scapegoat "price-fixing" landlords for driving up rents. Trump likes to scapegoat immigrants for doing the same.
With major party candidates like this, you can understand why some people's election yard signs are running afoul of local sign code regulations.
The post Biden vs. Trump: Housing Policy Edition appeared first on Reason.com.
