Market 08/16: Kamala Announces Economic Plan

Kamala Harris announces economic plan if elected President:

Housing market:

• $25,000 for first-time homebuyers, prioritizing first-time homeowners in the family lineage

• Promises to build 3 million more homes in 4-year term

• Tax incentives for home construction companies

• Rent price controls - Not allowing large companies with over 50 units to increase prices more than 6% per year

• Create laws preventing large investors from buying homes in bulk and then reselling at high prices.

→ The only thing Steve finds reasonable in this plan is the incentives for home construction companies and the 3 million homes figure. The housing market has a supply problem, not demand, so giving homebuyers $25,000 will have negative effects on inflation and government spending.

→ Regarding rent price controls and making it difficult for large investors, this has been tried in other countries, most recently Argentina and Venezuela, both had negative impacts on the market, reducing supply and removing incentives to improve existing housing conditions