President Joe Biden’s unveiling of new housing affordability proposals during his State of the Union address has ignited debate among experts, with opinions divided on the potential impact of these measures.

The proposed initiatives include a $5,000 tax credit for middle-class first-time homebuyers over two years and a $10,000 credit for those selling their starter homes. While Biden emphasized the urgency of addressing housing affordability amid soaring mortgage rates and escalating home prices, critics argue that the plan may exacerbate underlying supply issues rather than alleviate them.

Mark Calabria, former director of the Federal Housing Finance Agency, expressed skepticism about the effectiveness of Biden’s proposals, highlighting concerns that increasing demand without addressing supply constraints could inflate home prices further. Calabria emphasized the importance of tackling the root cause of the housing crisis, citing chronic undersupply as a significant challenge.

Economists estimate that the United States faces a shortage of between 2 million and 20 million homes, indicating a structural imbalance in the housing market. Critics like Calabria caution against policies that solely stimulate demand, suggesting that measures to incentivize construction and address regulatory barriers would be more effective in addressing the housing shortage.

Additionally, some experts warn that cracking down on “rent gouging” by corporate landlords could have unintended consequences, potentially reducing the number of available rental properties and driving rents higher.

Despite varying perspectives on Biden’s housing agenda, advocates like David Dworkin, President and CEO of the National Housing Conference, commend the administration’s focus on addressing affordability challenges. Dworkin characterized Biden’s proposals as crucial steps toward easing the burden of high rents and home prices, underscoring the urgency of congressional action.

However, Ed Pinto, senior fellow at the American Enterprise Institute’s Housing Center, criticized the plan for its limited emphasis on supply-side solutions. Pinto argued that increasing demand without corresponding efforts to expand housing supply would only exacerbate affordability pressures.

While Biden’s housing agenda may face challenges in gaining legislative momentum during an election year, the debate surrounding housing affordability underscores the complexity of addressing systemic issues in the housing market. As policymakers continue to grapple with these challenges, the need for comprehensive solutions that balance demand-side and supply-side considerations remains paramount.