New Housing Bill Has Economists Sounding The Alarm
- Proposed bill gives Treasury power to rewrite law without Congress, raising concerns about political influence.
- Bill may lead to reduced new construction and housing shortage, driving up prices.
- Experts question whether limiting corporate investors is the right solution to the affordability crisis.
New Housing Bill Has Economists Sounding The Alarm
Can a new housing bill really help solve the nation’s affordability crisis, or will it have the opposite effect? A recent proposal, touted as a solution to the housing shortage, has economists and experts sounding the alarm. The bill, which aims to limit the number of homes that corporate investors can buy, may seem like a straightforward solution, but its implications are far more complex.
Tony Katz is joined by economist Dr Matt Will. According to Dr. Matt Will, economist at the University of Indianapolis, “If Elizabeth Warren is in favor of it, the default should be I’m against it.” He’s not alone in his skepticism. The Wall Street Journal has also weighed in on the issue, highlighting two major concerns with the bill.
Firstly, the legislation gives the Treasury Department the power to rewrite the law without Congressional approval, citing the need to “minimize market disruptions and mitigate negative impacts.” Dr. Will warns, “Do you want to put that power in the hands of Gavin Newsom or Kamala Harris if they were unfortunate enough for us to be elected president that they could totally rewrite the law and regulate the entire rental home market?”
The second issue is the Department of Labor’s ability to set labor rates for new construction, which could lead to increased costs for homeowners. As Dr. Will explains, “If you build your new home, if you’re going to build a new home, Tony, oh okay, you’re talking about actually building it, right. If it’s going to be owner occupied and it’s new as opposed to something existing, that cost is going to go up.”
The bill’s proponents argue that it’s necessary to limit the number of homes corporate investors can buy, but Dr. Will counters that this approach is misguided. “We’ve built three hundred and fifty thousand new units in the past ten years,” he notes. “Build to rent has added three hundred and fifty thousand new homes. If there’s a housing shortage, I think we all would agree we like three hundred and fifty thousand new homes.”
The National Association of Home Builders estimates that the bill would lead to a significant reduction in new construction, with 40,000 units potentially being halted. The Urban Institute, a left-leaning think tank, estimates that the bill would result in 72,000 fewer homes being built. Dr. Will is concerned that this would lead to a housing shortage and increased prices.
As the debate rages on, it’s clear that this issue is far more complex than a simple solution. To understand the nuances and potential consequences of this bill, tune in to this episode of [podcast name] to hear Dr. Matt Will’s expert analysis and insights.
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