Both presidential campaigns are currently addressing strategies to alleviate the rising costs of housing in the United States. JD Vance, a proponent of Donald Trump’s campaign, claims that a future Trump administration would tackle the housing shortage by increasing home construction, partially through reducing energy expenses. However, economists argue that the key factors influencing housing costs are more closely related to labor and building material expenses than energy prices.
As home prices and rental rates escalate nationwide, candidates are compelled to propose solutions to the ongoing housing crisis. While Trump does not emphasize housing on his campaign website, he and Vance suggest that certain policies, such as reducing immigration, could lower housing costs by reducing demand.
During a campaign stop in Nevada, Vance stated, “We’re going to drill, baby, drill, lower energy costs, and that’s going to make it easier to build homes.” Nevertheless, housing experts contend that lowering energy prices alone would not effectively reduce construction costs or make housing more affordable.
Key determinants of housing costs include labor availability, the cost of raw materials, and regulatory frameworks that constrain construction activities. Currently, tariffs on imports and an ongoing labor shortage hinder progress—factors that could be exacerbated by promised policies from the Trump campaign.
Economist Anirban Basu emphasized that while energy costs are relevant, they are not as impactful as labor and material prices. The significant increase in the costs of building materials, such as lumber during the pandemic, illustrates the complexity of the housing market. Moreover, tariffs imposed during both Trump’s and Biden’s presidencies have contributed to escalating material costs, complicating the housing issue further.
Labor costs are also significantly increasing due to a lack of available skilled workers in the construction industry. This scenario, paired with stagnating productivity growth in the construction sector, exacerbates the housing supply issue.
While Vance suggests deporting immigrants would reduce housing demand, experts argue that this strategy may actually hinder construction efforts, as many construction workers are immigrants themselves. The ongoing labor shortage remains a pressing challenge, and any drastic reduction in the workforce would likely worsen the existing housing supply crisis.
Local and state regulations pose another major barrier to affordable housing. Zoning laws often favor single-family home developments over denser housing options, making it difficult to create more affordable living spaces. The Trump campaign has indicated a commitment to reducing these regulations; however, specifics are lacking, and previous actions have tended to reinforce single-family zoning.
Although the solutions proposed by both campaigns might have various implications, it is crucial to explore comprehensive strategies involving collaboration among local governments, builders, and policymakers to create a more sustainable approach to housing affordability in the long term.
In summary, as candidates propose solutions to the growing housing crisis, it’s vital to critically assess the economic realities that drive housing costs. Hopeful progress can be made by focusing on labor availability, material costs, and regulatory changes that prioritize sustainable development.