Presidential candidate Kamala Harris has proposed housing policies that recycle ineffective strategies long seen in federal housing programs. Her key proposals include subsidies for the construction of 3 million new housing units over four years and $100 billion in down payment assistance to first-time homebuyers.

Unfortunately, history tells us her plan would be worse than doing nothing.

The combination of supply and demand subsidies has often led to unintended market distortions. Take, for example, the Housing and Urban Development Act of 1968, which provided easy credit and generous subsidies. While housing permits surged by 1971-1972, the boom fizzled out by 1975, leaving behind long-term damage in cities like Detroit, Chicago, and Cleveland—areas that remain economically hollowed out to this day.

A similar outcome followed the 1992 congressional mandate for Fannie Mae and Freddie Mac to meet affordable housing goals. The resulting credit easing triggered a housing boom, doubling permits from 1.1 million in 1992 to 2.2 million in 2005. However, the market collapsed in 2009, with a 73% drop in housing permits and millions of foreclosures. The devastation of the building industry from that era still haunts today’s market.

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