Panetta proposal becomes a pillar of Kamala Harris’ plans to transform housing

In 2020, President Joe Biden told America he would “build back better.” As his hopeful successor, Vice President Kamala Harris, has begun rolling out her economic plan over the past week, we’re beginning to see some similarly alliterative phrasing out of her campaign: build, baby, build. 

Harris, an Oakland native and former California attorney general and U.S. senator intimately familiar with the state’s most pressing issues, has made addressing the country’s housing shortage and skyrocketing home/rent prices a pillar of her economic platform. She has talked about building 3 million new homes, providing $40 billion to local governments to address housing shortages, expanding tax credits for developers and peeling back benefits for investors who manipulate the market by buying single-family homes in bulk.

One of her signature proposals is to offer $25,000 to first-time homebuyers for down-payment assistance. It’s an idea that Santa Cruz County’s congressman, Rep. Jimmy Panetta, sees as an expansion of a bill he submitted earlier this year. According to a recent YouGov poll, 57% of surveyed U.S. adults support Harris’ version of it. 

Introduced in the House in March, the First-Time Homebuyers Tax Credit Act would offer up to a $15,000 tax credit for people entering the housing market for the first time. Panetta worked on the bill with Oregon Rep. Earl Blumenauer, and Sens. Sheldon Whitehouse (D-Rhode Island) and Martin Heinrich (D-New Mexico) introduced companion legislation in the Senate. 

“[Harris] is from the Bay Area, she’s from California, so I think she understands the importance of what this housing shortage means,” Panetta told Lookout on Wednesday following a speaking event at the Santa Cruz County Chamber of Commerce. “I think she went a little bit big, doing $25,000, but I get it, that’s the salvo. And then hopefully she’ll look at what bills are sitting out there and see there’s a $15,000 first-time homebuyers tax credit bill for qualified families.” 

Panetta told the Chamber of Commerce that he and his wife took advantage of a $10,000 first-time homebuyer tax credit when they bought their first house around 2003. However, that program expired just a few years later and hasn’t returned. 

That bill is one of several pieces of housing legislation Panetta has proposed over the past two years. His other major housing bills include the Workforce Housing Tax Credit Act, aimed at incentivizing housing development for people making between 60 and 100% of an area’s median income, and the More Homes on the Market Act, which would double how much home sellers can exclude from  capital gains taxes, going up to $500,000 for single filers and $1 million for joint filers. Panetta introduced both bills with bipartisan support. 

The first-time homebuyers tax credit that Harris adopted has not received the same endorsement from across the aisle, which Panetta attributed to the likely cost of implementing the program. The number is still being calculated. 

“[Republicans] are a little tentative on the cost, and that’s understandable, which is why, like with most of my bills that deal with taxes and tax credits, you need to wrap it into a major legislative vehicle,” Panetta told Lookout. “That’s what we hope to do next year with the Tax Cuts and Jobs Act. What can we bargain for? What can we negotiate on, realizing that housing is an important part of the economy?” 

Panetta has sat on the House Committee on Ways and Means since 2019, which he said has given him an evolved understanding of how the country’s tax code can be used to affect issues such as housing. When Republicans won back the House majority in 2022, Panetta was able to stay on Ways and Means, a sign that gives him confidence his committee appointment is safe, regardless of how 2024’s election cards fall. 

“I haven’t pissed anybody off too much,” Panetta said. 

Panetta said that Harris taking the mantle of first-time homebuyers assistance gives his tax credit bill a little extra shine, but he’ll prioritize all three bills, as well as his proposed Rent Relief Act, which would offer a tax credit to cost-burdened renters paying more than 30% of their income on housing.

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