Fmr. Obama Adviser: Harris’ Housing Credit ‘Not Something We Can Afford’, Will Enrich Homeowners, Not Buyers

During an interview with author Walter Isaacson aired on Thursday’s broadcast of CNN International’s “Amanpour,” Professor of the Practice of Economic Policy at Harvard University and the Harvard Kennedy School Jason Furman, who served as Chairman of the Council of Economic Advisers under President Barack Obama and on the Council of Economic Advisers and the National Economic Council under President Bill Clinton stated that the first-time homebuyer credit proposed by 2024 Democratic presidential candidate Vice President Kamala Harris will result in the price of “a lot” of homes jumping and therefore, will enrich homeowners, not buyers and “Our scarce resources, I think, are poorly spent with something that’s a transfer to existing homeowners, just not something we can afford, given all the many priorities we need to put ahead of that.”

Furman said that regulation is the biggest problem with housing and “I think her core motivation is we need 3 million more houses, completely agree with that. She has a $40 billion fund to give incentives to cities across the country to do what, as I said, Cambridge is hopefully doing right now. So, I very strongly agree with that. All of these different tax credits…I think they’re quite complicated. Some of them could be counterproductive. If they raise demand too much, they’ll actually increase house prices, not lower them. And –.”

Author Walter Isaacson then cut in to say, “Well, give me an example of one of her suggestions that you think might be counterproductive.”

Furman answered, “I think a $25,000 first-time homebuyer credit, it sounds great, but you’re going to see a lot of homes go up in price, maybe even by the full 25,000. So, you’re handing money to homeowners, not homebuyers. And, look, everyone in our country could use a bit of money. I’m not against that, but we have a large budget deficit. Our scarce resources, I think, are poorly spent with something that’s a transfer to existing homeowners, just not something we can afford, given all the many priorities we need to put ahead of that.”

Follow Ian Hanchett on Twitter @IanHanchett