Harris proposes $25,000 down payment assistance for first-time homebuyers — is it a good idea?
Some experts say the Democratic presidential nominee's plan would only make the affordable housing crisis worse, while others say they like the idea on its surface
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Vice President Kamala Harris has rolled out a list of actions she would take to tackle the affordable housing crisis in the U.S. if she wins the presidency, including the expansion of President Biden's proposal earlier this year to provide $25,000 in down payment assistance to first-time homebuyers.
While Biden's plan from May called on Congress to provide $25,000 for some 400,000 first-generation homebuyers, Harris wants to offer an average of $25,000 assistance to all first-time homebuyers in the country, which the Democratic presidential nominee says would be provided to more than four million people over four years if she were to occupy the Oval Office.
Vice President and 2024 Democratic presidential candidate Kamala Harris speaks at a campaign rally in Atlanta, on July 30. (Elijah Nouvelage/AFP via Getty Images / Getty Images)
The proposal sent out by the Harris campaign is light on details about how the $25,000 in assistance would work, but taken at face value, the idea already has both supporters and critics.
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Alexander Gorlin, an architect who co-authored the book "Housing the Nation: Social Equity, Architecture, and the Future of Affordable Housing," told FOX Business he likes the idea, but he and co-author Victoria Newhouse both said they would need to see more about the plan, noting that $25,000 might be great assistance in some areas of the country, but would not go very far in places with higher home prices, like San Francisco.
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Tony Fiorillo, owner of Asset Management Strategies, Inc., told FOX Business that Harris' plan "is a perfect formula to create inflation."
"Providing this benefit from the government would increase demand for houses at a time when there is already a shortage of homes available for sale," Fiorillo said, arguing that the incentive would create higher demand, thereby lowering the supply of available homes even further.
Billionaire Elon Musk agrees. When Harris' plan was first reported Thursday evening, Whole Mars Catalog wrote on X, "[W]on’t that just increase the price of all homes by $25,000 while also increasing the deficit," to which the Tesla CEO replied, "Yes."
Gorlin pushed back against the argument that Harris' plan would make the demand for housing even worse.
"This is not like buying a McMansion," he said. "These are starter homes, and the important thing, too, is that she's encouraging homeownership, which is building equity." He added, "I'm not an economist, but I don't think that all of a sudden, there's going to be a gold rush of people buying houses because of $25,000."
Others see Harris' plan as an effort to buy votes.
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"This is a terrible policy," said Cody Moore, a partner and wealth adviser at Wealth E&P in Alpharetta, Georgia. "In my opinion, it is just an attempt to garner more votes for the upcoming election by utilizing handouts."
Moore added, "This plan would just further inflate the real estate market, put the U.S. further into a financial deficit, and ultimately be another reason for the government to increase taxes."