Kamala Harris is proposing a number of tax incentives to help American families achieve home ownership, but some real estate professionals are concerned her proposals will put strain on Chicago’s housing market.
Vice President Kamala Harris shined a spotlight on the nation’s housing crisis last week during the Democratic National Convention, which brought thousands of delegates, media and other attendees to the United Center and McCormick Place.
When accepting the Democratic nomination for president, Harris vowed to “end America’s housing shortage,” underscoring plans her campaign released this month that would help lower the cost of housing by making homeownership attainable for more families and spur development of “starter homes,” including efforts to lower rental costs.
Some Chicago real estate professionals said they’re unsure if Harris’ proposals would be the right solution for Chicago, which is facing a housing market marred with a lack of available homes, increasing home prices and high development costs.
“Right now, I’m worried that it’s adding gas to a fire,” said April Baker, a Realtor at Berkshire Hathaway HomeServices Chicago.
Harris wants to offer up to $25,000 in down payment assistance for first-time homebuyers who have paid their rent on time for two years. First-generation homeowners would be eligible for more assistance.
Her proposal also calls for the construction of 3 million new homes over the next four years. When created, that supply could help satisfy new buyers incentivized by the down payment assistance program.
But the measures — paid for through taxes on corporations and high-earners — could create a frenzy in Chicago where supply is not keeping up with demand. Housing experts said the down payment credit, while beneficial, could add more buyers at a time when new home construction is lagging. The National Association of Homebuilders reported construction on new single-family and multifamily homes in the Midwest was down in July by 5.1% year over year.
In Chicago, there’s a historic lack of homes on the market. There were 4,955 homes for sale in July, about 8% fewer than at the same time last year, according to data from trade association Illinois Realtors. Six-month supply of homes
Baker said the problem extends to Chicago’s suburbs. She’s based in Berkshire Hathaway’s Oak Park office, which serves Forest Park, Oak Park and River Forest.
She said in a balanced housing market, there’s enough homes to support sales for six months.
