On July 21st, President Biden suddenly announced his withdrawal from the presidential race and nominated Vice President Harris to run for president. Many Democratic officials have also come forward to express their support for Harris. As a result, the showdown between Trump and Harris seems almost certain.
During Biden’s tenure, we didn’t hear much about Harris, especially her views and policies on the U.S. real estate market, which many of us are not familiar with. In this episode, let’s delve into Harris and Trump’s approaches to the American real estate market, their policies, and how they might impact the future of the housing market.
Firstly, Trump is a real estate tycoon, as we all know. Trump’s family’s wealth started with Fred Trump, Donald Trump’s father. Fred initially built low-cost housing in Brooklyn and Queens, taking advantage of favorable loan policies at the time to start his real estate empire. Trump, with his father’s help, ventured into upscale real estate and has now amassed a fortune worth billions of dollars.
In simple terms, Trump knows what kind of real estate holds value and maintains a consistent quality in construction. Buildings constructed by Fred in the past still stand strong today. He knows how to leverage tax incentives to maximize profits and keep money in his pocket. He is also adept at negotiation, speaking his mind boldly, which has brought him both immense fame and value but also subjected him to relentless media attacks.
During his presidency, Trump significantly cut taxes on corporate income, investment profits, and estate taxes, leading to a booming real estate market. However, as the Fed sought to restrain the market by raising interest rates and mortgage rates climbed, home sales began to decline by the end of 2018.
Trump was dissatisfied with then-Fed Chair Powell’s actions and demanded a rate cut or threatened to fire him. Although the U.S. president cannot directly dismiss the Fed chair, Trump’s tense relationship with Powell during that time reflected his unhappiness with the Fed’s rate hikes.
Their relationship remains strained as Trump has strong opinions on the current rate hikes. However, he also prefers to keep rates low, understanding the significant stimulus low rates provide to businesses and the economy. With the current rate hikes flattening the U.S. economy, continuing down this path may lead to dire consequences.
Turning to Kamala Harris, some may wonder why she has a Chinese name. Harris’s father was a Jamaican immigrant, and her mother was of Indian descent. They met at UC Berkeley and later married, laying the groundwork for Harris’s education and political career in California.
Although Harris’s parents divorced when she was seven, she returned to California for school, graduated from UC Hastings College of the Law in 1990, and became a licensed attorney in California. She began her career at the San Francisco District Attorney’s Office.
In 2003, Harris was elected as the San Francisco District Attorney. To celebrate her victory, San Francisco Women’s Commissioner Susan Hsu nominated her with a Chinese name, “He Jinli.” This set a precedent for non-Chinese elected officials in San Francisco to adopt Chinese names to better connect with the local Chinese community.
In 2010, Harris was elected as California Attorney General, becoming the first female state attorney general and the first person of African and Indian descent to hold the position.
In 2016, Harris ran for and won a seat in the U.S. Senate, becoming the first Indian-American female senator and the second African-American senator. Her seamless victories continued until she teamed up with Biden in the 2020 presidential election, where she proved herself as a formidable candidate against Trump.
Harris has also made notable gains in real estate. In 2004, she purchased a 1,069 square foot loft apartment in San Francisco for around $490,000 and sold it for $799,000 in February 2021, earning a 63% profit.
In 2017, while serving as a senator, Harris and her husband purchased a 1,700 square foot luxury apartment in Washington D.C. for $1.775 million. When they moved to the Vice President’s residence, they listed the apartment for sale in 2021, selling it for $1.85 million, earning a 4.2% profit.
Prior to their marriage, Harris’s husband purchased a 3,505 square foot luxury home in Brentwood, California in 2012 for $2.7 million, which they jointly own now, estimated at around $5.4 million.
Overall, Harris’s wealth has significantly increased post-marriage, mainly through residential purchases for living purposes rather than investment purposes. However, their lack of extensive real estate investment experience is evident, despite the substantial value of their properties.
In her political career as Vice President and Senator, Harris has been a strong advocate for affordable housing. Many of her policies reflect Biden’s, and it remains to be seen if she will chart her path moving forward.
In July, Harris advocated for affordable housing for all Americans, proposing rent increase limits on landlords with over 50 rental units to 5% or face the risk of losing federal tax deductions.
As California Attorney General, Harris drafted and helped pass the California Homeowner Bill of Rights in 2013, aimed at protecting homeowners from unfair practices.
After the subprime crisis in 2011, Harris negotiated with JPMorgan Chase CEO Jamie Dimon to provide assistance to California homeowners who lost their home equity. The bank eventually agreed to increase relief from $4 billion to $20 billion.
As a senator, Harris introduced the Rent Relief Act in 2018, providing tax credits to renters spending over 30% of their income on rent and utilities.
In June, Harris announced the “Path to End Housing Barriers,” aimed at reducing housing development costs and providing $85 million in subsidies. Her involvement in Biden’s housing policies indicates that her campaign efforts may follow a similar housing blueprint.
Some observers speculate that Harris may introduce her previous policy, the Middle-Class Assistance Act, offering up to $3,000 in refundable tax credits per person or $6,000 for jointly taxed couples to eligible middle-class and salaried Americans.
Wrapping up, Harris, representing the Democratic Party, excels in advocating for assistance to those facing losses or economic struggles, while Trump, representing the Republican Party, specializes in creating conditions for business growth and boosting the real estate market. Which approach do you agree with more?
During his 2016-2020 tenure, Trump took various measures to boost the U.S. economy, including reducing corporate regulations, real estate development regulations, and loan regulations, fostering an environment conducive to economic growth.
A survey conducted by the National Mortgage News in June revealed that while many mortgage professionals lean towards the Republican Party, they also indicated that regardless of the next president’s party, the current mortgage industry and interest rate environment are unlikely to change significantly. Experts believe that interest rates are primarily controlled by the Fed according to economic conditions and aren’t subject to direct political intervention.
There are reports that Trump’s campaign team is devising a plan to reorganize the Fed and grant Trump veto power over interest rate decisions if he wins the election. This aligns with Trump’s desire for greater communication with the Fed on rate decisions. If implemented, the U.S. president could wield significant influence over the nation’s economy. In today’s climate, it’s likely that Trump would advocate for further interest rate cuts upon taking office.
Additionally, experts suggest that if Trump is reelected, he may build upon his previous real estate policies by focusing on increasing homeownership, proposing the privatization of Fannie Mae and Freddie Mac without governmental support, and continuing tax reduction policies. Concerns arise that if Trump reignites real estate transactions, property prices may surge, and inflation could rise once again.
In sum, Harris, a Democrat, excels in advocating for assistance to the economically vulnerable, while Trump, a Republican, specializes in creating a conducive environment for business growth and real estate market acceleration. Which approach do you resonate with?