Biden has repeatedly pressed his senior staff for new ways to make homes more affordable and available, quizzing aides on mortgage rates and rental prices. He’s also demanded details on the burden that housing inflation has placed on families’ monthly budgets, according to two senior White House officials, who were granted anonymity to describe private conversations.
He’s told advisers that the challenge of affording a home is the main complaint he hears from voters when he travels.
Biden’s personal preoccupation with the issue reflects an awareness that housing remains a key vulnerability in his administration’s yearslong fight to rein in inflation. And it’s a shortcoming that officials worry is weighing on consumer sentiment, depriving Biden of the political lift they assumed he’d get from the improving economy. Housing costs are now the largest single driver of inflation, according to the Labor Department, with shelter prices making up two-thirds of the annual increase in February.
The White House is now making a fresh push to show it shares Americans’ frustration, elevating housing to a top priority just as Biden begins a general election run that could hinge on voters’ perception of his economic record.
Earlier this week, the administration pitched a suite of expanded tax credits and new funding aimed at making it easier to build and afford housing in its annual budget — though those proposals amount to more of a second-term vision than a readily implementable plan.
Biden has sought to hone his message on the issue, asking aides to walk him through the impact that high-level housing trends have on individuals’ everyday costs and inquiring about rent fluctuations in specific parts of the country. And in recent days, he has more readily acknowledged the housing crunch taking hold throughout much of the country.
“I know the cost of housing is critical to families nationwide,” Biden said Monday at a conference of mayors and other local officials. “The bottom line is we have to build, build, build.”
Facing a presidential rematch with Donald Trump, Biden has tried to move the debate toward domestic priorities where Democrats believe they hold a clear advantage. That includes orienting Biden’s economic platform around expanding benefits and lowering a range of everyday costs for the working class.
Yet making a dent in housing affordability remains a complex challenge that may take years to fully realize. And for Biden, the stark reality is that there’s little he can do before November to ease what remains the most arduous monthly expense for millions of homeowners and renters alike.
The nation’s supply of available homes has deteriorated in the wake of years of under-building and a boost in demand during the pandemic, driving up prices and crowding out lower-income consumers. Younger people are buying homes at a far slower rate than prior generations, forcing them to remain in a rental market that’s seen prices surge nearly 30 percent over the last four years.
Mortgage rates that are at 15-year highs, meanwhile, are exacerbating the crisis on both ends, putting monthly payments out of reach for first-time buyers. Existing homeowners fear selling — and forfeiting their current lower rates. The median monthly mortgage payment for a home with a 5 percent down payment has doubled since January 2021, according to Zillow.
For years, officials viewed housing affordability as more of a municipal issue that rarely resonated with voters on a national scale. But soaring home prices have become a universal challenge in recent years, creating a cascade of discontent: Older voters are upset because they can’t sell their homes, younger voters are frustrated they can’t find a first home and the youngest among the electorate simply believe they’ll never make enough for it to matter.
That financial squeeze is darkening Americans’ view of the overall economy — and by extension, Biden’s record, White House aides believe. In private meetings over the last several months, a range of governors, lawmakers and advocates have also urged the White House to devote more attention to housing costs, warning they’re playing a central role in voters’ political discontent.
“It completely shapes and transforms your life,” said Rep. Alexandria Ocasio-Cortez (D-N.Y.), one of several lawmakers who said housing affordability has become a top concern for voters in their districts. “It affects how they think about politics, and it affects how they vote.”
The White House is now pushing a range of bulked-up tax credits to incentivize existing homeowners to sell their starter homes, as well as expand rental assistance and extend help for lower-income buyers with their down payments.
A separate fund would set aside $20 billion for localities that find new ways to boost their housing supply, in an effort to combat municipal land-use restrictions that slow the pace of building.
Yet all those ideas require legislation. And while the White House has publicly argued the crisis affects red states just as much as blue states, aides privately acknowledge any movement is a long shot in an election year. Indeed, Republicans have been quick to pan Biden’s housing push.
“Since he’s taken office, mortgage rates have ballooned by 150 percent,” said Sen. Tim Scott, the top Republican on the Senate Banking Committee. “I think it’s a fair assessment to say that the Biden policies are devastating and negatively impacting first-time homebuyers.”
Trump, meanwhile, has attacked Biden for rising costs overall. But he hasn’t offered a housing platform of his own, and during his first term tried to limit affordable housing in a move that was criticized as a form of segregation. He cast the effort during the 2020 campaign as an attempt to appeal to the “suburban housewife,” claiming that Biden and Sen. Cory Booker would allow low-income housing to “invade” suburban neighborhoods.
Biden, by contrast, took some executive actions to bolster the housing market amid the pandemic recovery, and more recently proposed cracking down on rental fees and predatory landlord practices.
But aides acknowledge their remaining options are limited. Mortgage rates are likely to remain high until the Federal Reserve cuts interest rates — a move that the central bank is unlikely to make until inflation cools further. Home building remains slow, hampered in many cases by a thicket of local zoning and land-use restrictions.
Biden and his top officials instead are planning to ramp up their messaging on the issue, hoping that acknowledging the problem and promising to solve it in a second term will ease voters’ dissatisfaction — and help convince them to keep Biden in office long enough to see it through.
“Democrats have to get more competitive on the economy, and to do that, we have to be perceived to be taking on rising prices more aggressively,” said Celinda Lake, a Democratic strategist and pollster for Biden’s 2020 campaign. “This is an opportunity to take on aggressively an area that really matters to people and that people don’t perceive anybody to be doing anything.”
Biden aides are also betting that the Fed will begin cutting interest rates later this year, a long-anticipated decision that they privately hope will improve Americans’ outlook if mortgage rates drop into the 5 percent range. Then, people may be convinced to put their homes on the market.
But Biden has placed a premium on the Fed’s independence, ruling out pressuring the bank to take faster action. Instead, officials said, the pressure will remain on them in the interim to keep up the search for new solutions.
“Housing is one of the big inflation drivers, and it’s also something people feel very, very intensely,” said one Democrat close to the White House, granted anonymity to be candid in his assessment. “[Biden’s] got to get on the right side of that issue.”
Source: POLITICO
