As home affordability continues to affect working Americans, there are indicators that property prices in swing states may influence the Presidential election.
As former President Donald Trump and Vice President Kamala Harris prioritize Wisconsin, Michigan, Pennsylvania, Nevada, Arizona, North Carolina, and Georgia in efforts to attract voters, analysts say their housing policies will be top of mind for voters, especially younger Millennials and older Gen Zers who are concerned about affording real estate as they come into their prime homebuying years.
According to research by Dana Anderson of Redfin, the monthly payment of a typical homebuyer has nearly doubled since the 2020 election, and many factors have contributed to this. One of the factors is the corporate buying of private, single-family homes.
That key factor is not lost on Terri Montague who formerly served as program counsel for the U.S. Department of Housing and Urban Development and is now a McDonald Distinguished Fellow at Emory University. One of her points of study is urban development and housing affordability. She says without a doubt housing costs in swing states like Georgia have been driven up, in part by corporate purchasing.
“One of the distinguishing features of Georgia and the Atlanta metro is that Metro Atlanta has been a sort of ‘ground zero’ for activity, home purchases, and very aggressive buying of properties by private equity-backed corporate landlords,” Montague said. “The corporate investors are basically on a $60 billion buying spree across the Sunbelt states.”
Montague said in Sunbelt states zoning leans heavily, especially in Georgia, on requirements that large percentages of residential areas in nearly any given municipality be for single-family housing. This leads corporate investors to buy or build residential neighborhoods and dedicate the houses to being rental properties.
“These massive portfolios are being aggregated and that allows them to set and drive prices very aggressively,” Montague said. “They tell us through their trade association overall their activities only represent 3% of the total single-family, however in states like Georgia and particularly in the Metro Atlanta area it’s more like 42% of all the acquisitions in a given year. They are the main buyer, they are driving the transactions and as a result, they are also driving the prices.”
Montague said the term affordable housing has changed considerably. It had meant low to moderate income families and was gauged primarily by income level. Now the term has widened greatly to include a much larger demographic and much of the middle class falls into the parameters that are seeking out affordable housing.
She said these factors have led to a good bit of public discourse after the topic was largely unaddressed for quite some time.
“Honestly, the pandemic really took center stage, and the economic recovery in the wake of it made it very difficult to sustain the focus on this issue and so the issue ran away from us as a nation. But now the issue is back in earnest with a lot more people affected by it,” Montague said.
Montague said that the issue has grown for so long it has led to nearly everyone talking about affordable housing and that is what is making it a much larger political issue and a talking point in the race the White House.
“It is not the same old, same old,” Montague said. “I think this is a very different situation, I think housing and who comes across as credible on addressing housing challenges for working families, that is what is going to show up in the election results.”
Montague said housing is being discussed on the campaign trail by both Democrats and Republicans.
“Vice President Harris has now come out a whole platform and a whole plan and former President Trump is talking about his party’s plan and both sides are aggressively addressing how we are going to deal with this perennial housing crisis we have been living with for years,” she said. “High housing costs are non-partisan.”
Brian Robinson is a political strategist and agrees that the issue has grown so large that it will greatly impact voting in November.
“The Democrats know they have a problem,” Robinson said. “We saw leading Democrat thinkers including President Obama and President Clinton both specifically mention the need for more additional housing, more building specifically, to increase supply over time.”
Robinson says the demographic the lack of housing options most affects is Gen Zers and younger Millennials as they have to rent or live at home with parents for a longer period of time than their predecessors. He acknowledges this demographic tends to be a group that votes Democrat, but said Republicans do have a message that can resonate with the younger crowd.
Republicans could have an advantage if they tie housing costs in with the overall cost of living that the country has seen increase since the start of the pandemic, Robinson said.
Trump has vowed to reduce regulatory hurdles to building new homes. He has also talked about opening up portions of federal land for large-scale housing construction.
President Joe Biden recently called on federal agencies to assess surplus federal land that can be used to build more affordable housing across the country, so accessing federal lands may be a point of agreement for both parties moving forward.
Harris has promised to make housing more affordable by working with the private sector and home builders to increase the number of units by three million by the end of her first term.
Harris also plans to provide first-time homebuyers with a $25,000 tax credit. Robinson said that may encourage some people to buy a home, but could ultimately backfire if it drives up prices in the long run.
