On night two of the Democratic presidential debates, Kamala Harris (D-CA) attacked former Vice President Joe Biden on his history of having worked with two segregationist senators to ban court mandated busing.
In her newest attempt to take away more of the African-American vote from Joe Biden, Harris announced she would allocate $100 billion of federal funds towards the goal of increasing Black homeownership. She said, “So we must right the wrong and, after generations of discrimination, give black families a real shot at homeownership.” Kamala Harris is referring to the immoral practice of redlining, which was a policy of denying services and access to certain areas to African-Americans as well as other minority groups.
Harris’ plan would specifically target homeowners in communities that have been affected by redlining in the past. These homebuyers would receive a Housing and Urban Development grant of up to $25,000 that would contribute to paying closing costs and down payments. These grants would be restricted to families with incomes as high as $100,000, and $125,000 for those living in high cost areas. Harris’ campaign predicts this plan will help around 4 million families.
Politico reports that Harris also promised to “work to expand HUD’s fair housing program, strengthen anti-discrimination lending laws and amend the Fair Credit Reporting Act to require that credit scores include rent, phone and utility payments.”
What Kamala Harris is forgetting is that a similar proposal has been tried and failed. In the late 1990s and early 2000s, the federal government decided it would help promote a program that would lend out subprime mortgages to those who had no previous credit or borrowing history. Many of these beneficiaries were unable to pay back the adjustable-rate mortgages and defaulted on them. Over time, those defaults kept occurring and eventually led to the housing bubble to burst. Because the housing bubble collapsed, the flow of credit to businesses and consumers dried up.
In 2008, the United States faced a financial crisis and the world economy crashed again because banks and lenders were approving unsustainable mortgages to people who simply couldn’t afford them.
Considering that redlining is illegal, Kamala Harris should show the proof that redlining is still occurring if that is the claim she is trying to make. Otherwise, she needs to sell the idea of why the American taxpayers should foot the bill of all these loans that will largely be defaulted. The $25,000 grant Kamala is proposing is not enough to cover a person’s downpayment and closing costs for a home. Additionally, what happens after that additional subsidy?
With that being said, there is a way to expand homeownership to those unable to afford a home. There has been bipartisan support to reform zoning laws that have been set in place by local governments, which limit the supply of homes and increase the property value of the homes. Michael Tanner wrote in National Review, “Studies show that such regulations add as much as 20 percent to the cost of a home in Baltimore, Boston, and Washington, 30 percent in Los Angeles and Oakland, and an astounding 50 percent or more in cities such as San Francisco, New York, and San Jose.”
HUD Secretary Ben Carson has proposed threatening to pull Community Development Block Grant money away from cities that refuse to comply with easing zoning laws so that new housing can be built. Alex Muresianu wrote that by “consolidating the community block grant and LIHTC programs into one incentive could reduce spending. An expansion of the housing supply would lower rents and raise real incomes. And the resulting decline in poverty would reduce the caseload of public assistance programs without narrowing eligibility.”
In the coming weeks, we’ll see if Kamala Harris continues to defend her position on this policy or if she back pedals—just as she is doing on the issue of forced busing that she attacked Joe Biden for a few weeks ago.
The views expressed in this article are the opinion of the author and do not necessarily reflect those of Lone Conservative staff.