You can rest assured that when President Biden faces off against former president Donald Trump in their first presidential debate of 2024 on Thursday, the economy will be center stage. Or, should we say, two very different perceptions about the economy.
But the discussion will be incomplete unless the candidates directly address one of the country’s underlying economic challenges: housing.
Biden will rightfully argue that by almost every major metric, the economy is strong. Unemployment is only slightly above a five-decade low. The job market continues to expand. Wage growth has mostly been strong. And while prices for many things remain stubbornly high, the inflation rate has dramatically cooled since its peak in 2022, and some prices are actually in decline. If the US economy were an athlete, “it would be peak LeBron James,” a recent essay in The Atlantic asserted.
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One set of metrics is consistently tilted against the president, however: opinion polls. With stunning consistency, those surveys indicate that the public, by large margins, has lost faith in Biden’s handling of the economy. Positive data notwithstanding, more people say that the economy is getting worse than say it is getting better, and inflation stands at the top of their concerns. This disconnect between what the data show and how people seem to feel will surely be a core part of Trump’s attacks on Biden Thursday night.
But while the economy will probably take a star turn in the debate, it seems just as probable that housing will barely get a mention. Though buying a house or renting an apartment is the largest part of almost every household’s annual budget, and though the cost of buying or renting a home is at or near record levels across the country, there is no real federal housing policy.
There are reasons for this. Housing policy is largely left to local governments, whose power over zoning and planning policies restricts what can be built and where. As housing prices have skyrocketed in recent years, states like Massachusetts, California, and Montana have moved on a statewide basis to ease some of those local restrictions. But the power of local governments to say no remains high. It’s hardly surprising, then, that presidents and presidential candidates tend to avoid the issue.
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But it needn’t be so. There are levers the federal government can pull to make housing more affordable and to spur new development. It could expand a tax credit for affordable housing construction. It could provide incentives to encourage communities to ease restrictive zoning and build denser housing. It could increase the availability of housing vouchers and lift limits on public housing units. It could do a whole lot more to kick-start housing construction, which for decades has failed to keep pace with population growth.
None of these things, even if they were done tomorrow, would have a swift impact on the housing shortage. And that is probably another reason presidential candidates, or even congressional ones, don’t bother talking about it. And of course there are partisan differences over what policies would be most effective, which would make any action difficult.
But there is also surprising bipartisan support for the idea that there is indeed a national housing crisis and that something must be done about it. That is why even the conservative Republican governor of Montana, Greg Gianforte, signed Massachusetts-like legislation last year that allowed for more multifamily homes and accessory dwelling units in his state. In 2018, even Ben Carson, then Trump’s secretary for housing and urban development, called for ending exclusionary zoning.
There is, needless to say, one other powerful lever the federal government can pull to help ease housing costs: reducing the cost of borrowing by bringing down interest rates. But interest rates are largely set by the Federal Reserve, which for good reasons is insulated from political pressure from the president or Congress. That surely won’t stop Trump from trying to pressure it into reducing rates if he is elected.
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Trump is wrong about many things regarding the economy, and his own economic plan is full of inflationary proposals. But on interest rates, he’s got it right. Lower interest rates would make it easier for developers to borrow money to build and home buyers to get mortgages to pay for new homes. As much as consumers hate the high cost of goods and services these days, the high cost of housing is a far greater burden on their bank accounts. And it’s a burden that has been growing steadily for a long, long time.
As The Atlantic writer Annie Lowrey put it, people should stop being mad about the cost of a Big Mac and start getting a whole lot madder about really big costs that have been too high for too long, including health care, child care, and housing. “Washington,” she says, “can do something” about housing. “Much more than it is doing now.”
So beyond jawboning the Fed, the presidential candidates could at the very least begin a national discussion about building more housing, easing the weight of high rents, and bringing the nation’s housing stock back into alignment with its growing population. And they could begin that discussion on Thursday.
Editorials represent the views of the Boston Globe Editorial Board. Follow us @GlobeOpinion.
