12 hours ago
America Needs a Real Plan To Make Homeownership Affordable Again
The American dream of homeownership, already slipping out of reach in recent years, is now vanishing for millions. The housing market is under siege from all sides. We're short approximately four million homes, mortgage rates have nearly tripled since the coronavirus pandemic, and tariffs are driving up the cost of materials, slowing development to a crawl. In April alone, single-family housing starts dropped 12 percent compared with the same month last year.
From the earliest days of the republic, property ownership was deemed essential to liberty. The Founding Fathers believed that broad ownership of private property, especially land, was essential to sustaining a self-reliant citizenry. "Dependence begets subservience," Thomas Jefferson warned, and owning the ground beneath your feet was a guardrail against both. That ideal distinguished the United States from the Old World, where land belonged to the elite and everyone else merely rented. Legislation like the Homestead Act of 1862 and the GI Bill of 1944 reflected the fundamental ethos that ownership ensures empowerment.
Today, that ethos is at risk. Our nation faces three interlocking crises: a massive supply shortfall, punishing interest rates, and a worsening affordability spiral. Tackling them head-on to produce homes that everyday Americans can afford requires courageous and targeted reform.
First, policymakers must create incentives for developers to build entry-level housing targeted at buyers earning around the median income in the communities where they operate. The sole purpose of this policy should be to increase the inventory of homes accessible to everyday Americans while limiting competition from investors and second-home buyers. As part of this initiative, the federal government should offer a 50 percent reduction in capital gains or income tax liability to non-publicly traded developers who build and sell homes priced within 20 percent of the local median home price, provided those homes are sold to first-time buyers. To further jumpstart development and encourage scale, that incentive should rise to 75 percent after the first ten qualifying homes. Larger, publicly traded firms should be included as well, though at a lower incentive rate.
AUSTIN, TEXAS - APRIL 17: An aerial view of houses undergoing construction in a neighborhood on April 17, 2025 in Austin, Texas.
AUSTIN, TEXAS - APRIL 17: An aerial view of houses undergoing construction in a neighborhood on April 17, 2025 in Austin, the federal government should put its own land to better use. Vast tracts of underutilized and unused federal land could be sold at a discount to qualified developers, yet with strings attached. Homes must go to first-time buyers, priced near the local median, and states must commit to a 20-year property tax abatement. President Donald Trump's proposal to unlock federal land was an admirable start. But we also need to direct development toward working families rather than vacation-home investors.
Third, states must be empowered to lead. Governors would apply, identifying housing-strapped regions, providing local price data, and agreeing to tax abatements. A dedicated federal agency should coordinate this program, modeled on the successful Opportunity Zone framework established under the Tax Cuts and Jobs Act of 2017. Without micromanaging, the agency would ensure funding and enforcement consistency across state lines.
New homes mean nothing if no one can afford to buy them. Since 2020, prices have soared by almost 50 percent while rates have tripled. That's a double whammy for prospective middle-class buyers. Fannie Mae and Freddie Mac should offer discounted mortgage rates for income-qualified households purchasing homes in the program. Without financing relief, inventory will not translate into ownership.
Then there remains the danger that Wall Street will pounce on any new homes. Institutional investors have bought up single-family homes in cash by the thousands, inflating prices and freezing out first-time buyers. Publicly traded firms should be capped at ownership of 50 single-family homes. If they own more, they must sell the excess within two years or face heavy penalties. That single measure would instantly return inventory to the market.
To additionally safeguard homes for families, we also need to keep them from becoming just another asset class. Homes built under the program should carry 20-year deed restrictions with only primary occupants having the ability to buy and sell. If a homeowner wants to sell before the 20 years are up, the next buyer must also intend to live there. Localities have used similar models successfully for decades.
This plan is admittedly aggressive, but it's achievable. It merely asks government to use resources readily at its disposal—land, taxes, and regulation—to empower developers, protect families, and rebuild the American middle class. If implemented, it would resuscitate the founding principle that every citizen should have a shot at owning the place they call home. Policymakers must act before the American dream becomes little more than a nostalgic memory.
Pierre E. Debbas is managing partner of Romer Debbas LLP. Follow on X: @pierredebbasesq
The views expressed in this article are the writer's own.
