Housing Crisis: Democrat & Republican Solutions

Affordability Crisis Deepens as Trump’s Rhetoric Clashes with Economic Reality

Despite President Trump’s claims that the issue has been resolved, the escalating cost of living – particularly in housing – continues to erode voter confidence and poses a significant threat to Democratic prospects in the upcoming 2025 elections. A recent poll conducted by the New York Times and Siena University revealed that 58% of respondents disapprove of the president’s handling of the economy, signaling widespread discontent.

A Decade of Divergence: Wages vs. Costs

The core of the problem lies in a widening gap between wage growth and essential expenses. Over the past decade, from 2014 to 2024, wages nationwide have increased by a modest 21.24%, according to Federal Reserve data. In stark contrast, rent and home sale prices have more than doubled during the same period, while healthcare costs surged by 71.5% and grocery bills rose by 37.35%. This disparity has pushed national home price-to-income ratios to all-time highs, creating an increasingly unsustainable situation for prospective homebuyers.

California: A Case Study in Crisis

The affordability crisis is particularly acute in coastal states, with California serving as a prime example. Housing costs in California are roughly double the national average, according to the state Legislative Analyst’s Office, and have been increasing at “historically rapid rates.” The median home price in California reached $877,285 in 2024, significantly higher than the national average of approximately $420,000. To meet current demand, California needs to add 180,000 housing units annually, a goal it has consistently fallen short of, despite recent progress in addressing its homeless population, which stood at 116,000 unsheltered individuals in 2025.

Shifting Public Sentiment and Political Implications

Public perception of the economy is deteriorating rapidly. A Gallup poll last month found that over two-thirds of Americans believe the economy is worsening, with only 36% approving of the president’s performance – the lowest approval rating since the start of his second term. Furthermore, 47% of U.S. adults now describe economic conditions as “poor,” a significant increase from 40% just a month prior. Even within the Republican base, only 16% believe President Trump has made substantial progress in addressing cost of living issues, according to an Associated Press poll. This widespread dissatisfaction could significantly impact the Democrats’ ability to maintain or expand their electoral success in 2025 and potentially lead to a shift in control of one or both chambers of Congress.

Democratic Proposals: Expanding Supply and Density

Recognizing the political stakes, Democrats are prioritizing measures to increase the housing supply and promote denser development. Senate Minority Leader Chuck Schumer (D-N.Y.) has announced plans to “supercharge” construction through legislation like California Senator Adam Schiff’s Housing BOOM Act, introduced in December. Schiff’s proposal aims to stimulate the development of “millions of affordable homes” by expanding low-income housing tax credits, providing rental assistance, addressing homelessness, and offering $10 billion in housing subsidies for essential workers like teachers, police officers, and firefighters. However, the bill faces significant hurdles in the Republican-controlled Congress.

Republican Response: Tax Breaks and Deregulation

House Republicans have unveiled an alternative proposal, a successor to the “Big Beautiful Bill” approved in July, focused on lowering down payments, enacting mortgage reforms, and providing tax breaks. The Republican Study Committee claims this package will reduce the budget deficit by $1 trillion and can pass with a simple majority through the reconciliation process. The plan also includes a controversial provision to revoke federal funding from states with rent control policies or perceived lax immigration enforcement, potentially saving $48 billion. President Trump has additionally endorsed a $200-billion mortgage bond stimulus intended to lower mortgage rates and monthly payments, while the White House continues to advocate for portable and assumable mortgages.

A DOJ Investigation and Accusations of Political Motivation

Adding to the complexity, the Department of Justice has launched a criminal investigation into Federal Reserve Chair Jerome Powell regarding the Fed’s renovation costs, prompting criticism from President Trump over “his never ending quest to keep interest rates high.” Some Democrats, like Rep. Laura Friedman (D-Burbank), accuse the president of using these actions as a punitive measure against “blue states.”

Bipartisan Efforts and Areas of Alignment

Despite the partisan divide, some areas of cooperation are emerging. The bipartisan ROAD to Housing Act, which seeks to expand housing supply by easing regulatory barriers, passed the Senate unanimously and has White House support, though House Republicans have stalled its progress. Similarly, the Housing in the 21st Century Act, approved by the House Financial Services Committee by a 50-1 vote in December, aims to cut permitting times, support manufactured housing, and expand financing tools for low-income housing developers. A rare moment of alignment also occurred between the president and California Governor Gavin Newsom, with both pledging to address corporate home buying.

Expert Concerns and Potential Pitfalls

Housing experts have expressed concerns about certain aspects of the Republican proposals, particularly the idea of withholding federal funds from states with rent control or sanctuary policies. “Any conditioning on HUD funding that sets up rules that explicitly carve out blue cities is going to be really catastrophic for California’s larger urban areas,” said David Garcia, deputy director of policy at UC Berkeley’s Terner Center for Housing Innovation. Experts also voiced skepticism regarding the president’s mortgage directives, noting the risks associated with pushing Fannie Mae and Freddie Mac into riskier mortgage markets. Furthermore, proposed HUD spending cuts, including a 30% cap on permanent housing investments and the elimination of a federal emergency housing voucher program, could exacerbate the homelessness crisis, potentially leaving 14,500 individuals without shelter.