In a Washington Post In an op-ed Wednesday, they attributed the housing affordability crisis to a lack of supply, estimating that the U.S. needs 3 million more homes, most of which are in the bottom half of the market.

Harris’ plan, released earlier this month, aims to increase the supply of affordable housing by encouraging more construction while providing $25,000 in down payment assistance to first-time home buyers.

Parrott, co-owner of consulting firm Parrott Ryan Advisors and a former White House economic adviser, and Zandi pointed to the expansion of a tax break for developers known as the Low-Income Housing Tax Credit, which would increase the supply of affordable rental housing.

To create more affordable homes for sale, the Harris plan would also give builders a tax break on profits from homes built and sold to first-time homebuyers.

Yet another part of the plan would create a new tax credit for renovating homes that couldn’t sell for a price high enough to recoup the cost of repairs, bringing additional supply to the market that would otherwise sit unused.

To overcome infrastructure shortcomings and potential local political resistance, the Harris plan would provide more money to states and communities.

“Each of these steps would be significant on its own, but together they would amount to the most aggressive supply-side push since the national housing investment that followed World War II,” Parrott and Zandi wrote.

Then the federal government offered assistance to veterans through the GI Bill, which included favorable terms for home purchases, which stimulated more demand and construction.

Cost of the Harris Housing Plan

The plan certainly comes with a hefty price tag: $125 billion. It would have to be paid for with tax revenues or offset by spending cuts elsewhere, they noted. Otherwise, it would add to the federal budget deficit and help raise mortgage rates, making homes less affordable.

But the costs of increasing supply are more than offset by the long-term costs if the housing crisis worsens, they warn.

“Our lack of affordable housing will continue to squeeze savings, opportunity and growth in ways that will be damaging to the nation’s economy in the long run,” Parrott and Zandi said. “A thoughtful effort to address the problem now will ultimately lead to more growth and less costs.”

Trump Housing Plan

Donald Trump told Bloomberg he would lower the cost of housing by loosening environmental and permitting regulations. But he has also suggested at campaign rallies that he would limit the development of low-income housing in the suburbs.

The 2024 Republican Party platform blames illegal immigrants for high housing costs and promises to deport them, which some housing experts say would reduce the availability of construction workers and increase costs. The platform also promises a mix of supply- and demand-side measures.

“To help first-time homebuyers, Republicans will lower mortgage rates by reducing inflation, open limited portions of federal land to new home construction, promote homeownership through tax breaks and assistance for first-time homebuyers, and eliminate unnecessary regulations that push up home prices,” the report said.