A leading US liberal think-tank, wants the next Democratic president to boost new home construction to increase supply. Photo / 123rf
Fresh off United States electoral victories, Democratic advocacy groups are rolling out the issue that they hope will launch their next successful attack on President Donald Trump’s economy: housing affordability.
The Centre for American Progress, a leading liberal think-tank, wants the next Democratic president to: boost new home construction; send annual cheques to renters; and punish local jurisdictions that don’t reform onerous zoning codes or make other moves to increase supply.
The ideas mark Democrats’ second stab at making housing a key electoral issue.
Former Vice-President Kamala Harris rolled out a broad housing platform during her unsuccessful bid for the presidency in 2024.
Trump swept to victory largely by promising to lower costs. Instead, inflation remains elevated nearly a year into his second term, with housing expenses driving up consumer prices, according to federal data.
It has led segments of the Democratic Party that have long been sceptical of development and laissez-faire land-use policies - and classified under the moniker NIMBY, for “not in my backyard” - to embrace new development.
“There is a stark recognition in the electorate right now that there’s not enough housing options, and we want our political leaders to be doing whatever they can to fix that,” said Henry Honorof, director of the Welcoming Neighbours Network, which includes state and local pro-housing advocacy organisations across about two dozen states.
“The candidates that are sticking to the status quo and wrapping themselves in NIMBYism are getting their butts handed to them.”
The centre paper, released yesterday, addresses a practically universal truth: There aren’t enough houses in America, and the shortfall is pushing prices up.
The consequences fall on renters and buyers alike: About one-third of American households, including half of all renters, spend more than 30% of their income on rent or mortgage payments, the paper notes. The median first-time home buyer was 40 in 2025, the oldest on record.
“The problem is well understood,” said Jared Bernstein, who ran the Council of Economic Advisers in the Biden White House and is one of the paper’s lead authors. “What I’m more interested is what you’re going to do about it.”
Bernstein and co-authors Michael Negron, Natalie Baker and Chad Maisel argue that their policies would fill the gap of two million houses in five years, at a cost of roughly US$95 billion ($168b).
Core to that plan is a novel carrot-and-stick approach, through which Washington would enter into three-year affordability contracts with places that need more houses and where costs are particularly high.
Local governments would set goals for new production, zoning reform and financing options, for example.
If those targets are met, renters would get annual payments of up to US$1000. Localities that don’t meet their goals would lose access to federal grant programmes for infrastructure and development.
The idea is that rents would level off, or even fall, as new housing becomes available. In the meantime, renters in high-performing areas would catch a break. In Los Angeles, the authors estimate, a typical renter household would save as much as US$860 each year; in Philadelphia, up to US$960.
The paper also proposes accelerating construction, development and financing options for modular and manufactured housing - which often don’t meet local zoning or land-use rules and are usually harder to finance than typical mortgages. The authors also want to shield consumers from junk fees in the rental market and to cut construction costs by exempting building materials from the Trump Administration’s tariffs.
Some of the ideas build on others gaining momentum in Washington. A sweeping package of housing proposals has secured rare bipartisan support in the Senate and is expected to gain similar backing in the House.
It includes steps to make manufactured housing easier and cheaper to build and would create a US$1b “Innovation Fund” through which localities that build more housing would be rewarded with extra money for infrastructure such as roads and sewer systems.
But the proposals also highlight a growing policy debate in Democratic circles about how to respond to Trump’s second term.
The housing paper is the first in a series of proposals that the centre hopes will become a playbook if Democrats win the White House.
Bernstein and Lawrence Summers, who served in senior roles in the Clinton and Obama administrations, were set to lead the economic component of the project.
Democratic operatives are calling it “Project 2029,” a play on the Heritage Foundation’s Project 2025 blueprint for Trump’s second term. Other liberal operatives are using the same title for similar projects.
The formal launch of that working group is on hold, though. Summers’ involvement is drawing scrutiny, as well, after records from Jeffrey Epstein’s estate revealed that he was in regular contact with the disgraced financier.
Yesterday, a Centre for American Progress spokesperson said Summers was no longer a fellow at the think tank.
Yesterday, Summers said he is “deeply ashamed” of his communication with Epstein and will be “stepping back from public commitments”.
Many of the ideas circulating in Democratic circles have focused on “abundance”, a broad agenda popularised by a recent book by journalists Ezra Klein and Derek Thompson that advocates stripping away onerous rules for housing, energy, and more to unleash government efficiency and productivity.
Other economists and policy wonks argue that “abundance” theories should be augmented with affordability goals so the benefits, for example, reach lower-income households, as noted in one Urban Institute paper by Biden administration alumni Daniel Hornung and Aaron Shroyer.
Another paper released yesterday by the American Economic Liberties Project blamed consolidation among home-building firms for consistently high housing costs and accused investors of hoarding land and leveraging single-family homes into financial assets, arguing that those actions are anti-competitive.
The paper also called for lowering regulatory burdens to home-building and encouraged the construction of manufactured housing, similar to what the centre proposes.
“You cannot solve the housing supply shortfall on abundance policies alone,” Bernstein said.
“There are all kinds of distortions and frictions in the system that lead to affordable housing not pencilling out. Even if you take down some of the regulatory barriers that are past their ‘sell by’ date, you need both regulatory and permitting reform, but you also need federal resources to help more affordable projects pencil out.”
- Yasmeen Abutaleb contributed to this report.
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