The election is over. Now comes the question: will homeownership be a safe space for the Blue Wave and MAGA World to play nice?
Tuesday's election defied expectations more than this year's version of the NY Giants. Democrats won control of five more governor's races and will have a triple-digit lead in the House (formerly a two-vote GOP lead) and a double-digit lead in the Senate. These numbers approach, but don't yet meet, a supermajority. With a supermajority, the leading party could override both a filibuster and a presidential veto, not to mention impeach. But voters are sending a clear message about the cost of living. Running an election is a time for political fighting, but hopefully the 120th Congress cares most about actually governing. So here are seven strong suggestions and predictions for a new group that brings in something refreshing: diversity and youth.
As a real estate broker, a homeowner, and a father raising a child in New York City, I see the affordability problem from several angles.
Millennials are no longer the kids living in their parents' basements. We're the sandwich generation now: raising families, paying mortgages, building businesses, and trying to create the same financial security that previous generations enjoyed, while providing them with care in many cases.
None of the current policies governing homeownership have kept pace with the price of a home, the cost of raising children, or the realities of living in today's America. Today's America is a place where people might test a few cities and a few professions. Homeownership has been the core asset for many people, either for decades or since we were lured into buying by recently low rates. Let's harness that.
1. Let homeowners keep more of their profits. When you sell your primary residence, eligible taxpayers can generally exclude $250,000 in capital gains, or $500,000 for married couples filing jointly. Those limits haven't increased since 1997. Adjusting for inflation, that amount should be $1,049,657 in 2026 dollars based on CPI alone. Think about that. Nearly three decades of home-price appreciation, and the tax- free profit is basically worth less than half of what it was intended to be. This creates a disincentive for longtime owners to sell, especially in expensive markets. Raising the exclusion and indexing it to inflation could help unlock housing inventory, encourage downsizing, and make it easier for growing families to move into larger homes. And since something like this only happens every 30 years, inflation be damned, why not raise it to $1.5 million for married couples and $750,000 for individuals? Think about it, it just makes sense. It's the core asset for most Americans, so let's give us all something to depend on and be proud of.
2. End limits on all SALT deductions. Right now, the SALT deduction is capped at $40,400, a limit set by the 2025 Tax Act. (The Tax Cuts and Jobs Act in 2017 set the limit at $10,000 for years before 2025.) The SALT deduction cap will increase by 1% each year from 2026 through 2029 and expire after 2029 unless Congress chooses to extend it. The full deduction is reduced for certain higher levels of modified adjusted gross income (MAGI). This was a huge wet blanket on the coastal cities. I can't see a world where the Democrats vote to preserve the One Big Beautiful Bill. Therefore, in 2029, with a presidential election campaign brewing, who is going to champion higher taxes? This will be a big win for homeowners and homeownership. Co-ops will be big winners locally as well. I mean, the Floridians just voted to end their property tax! We deserve this. (I know they didn't end it, but you know what I mean.)
3. Increase the mortgage interest deduction. The federal mortgage interest deduction generally applies to just $750,000 of mortgage debt for newer loans, a limit that hasn't kept pace with housing prices. In New York City, $750,000 doesn't necessarily buy luxury. A million dollars doesn't even necessarily get you a two- bedroom apartment. Congress should raise the limit to $2 million. All the money that goes into making housing more attractive almost immediately gets reinvested in all types of stimulus, from home goods to baby cribs. This is such a nicer part of the economy than data centers and missile batteries. Let's nurture it.
4. Expand the child tax credit. Right now the annual child tax credit is $2,200. I imagine this could be increased by five times, to $11,000. Look, if we can't tackle something as complex as universal health care, at least make the cost of raising children as deductible as business expenses are now for small business owners. If I buy myself a new iPhone for work it's deductible, but if I buy my child bedsheets or diapers, or you know, food, it's not. Children make the world go round. It's the simplest way to fortify a new American middle class. If we want families to put down roots, we should make it easier to raise children where they live.
5. Rethink how we tax wealth versus work. The wealth tax failed in California. However, who knows what the future holds? In a world where so many corporations like Apple and Meta have set up offshore headquarters to avoid US corporate taxes, and billionaires can exploit loopholes (depreciation of commercial assets, for one), there may be a reckoning. It's not that farfetched, no matter what your first instincts might be. Here's a question worth asking: why should a family earning a healthy salary in New York face such a heavy combined tax burden while some of the wealthiest Americans can accumulate enormous fortunes through appreciating assets? Right now, for example, if you buy crypto, lose money, sell it, book a loss, rebuy the crypto, and it appreciates, you can deduct the total loss from your income taxes. I have a former client who moved to Puerto Rico to avoid NY income taxes, younger than me, who booked over $3 billion trading for his hedge fund in a month. A month! During the New Deal, rich folks screamed at FDR and called him a socialist, but the FDR New Deal policies, like Social Security and the FDIC, are what make the US better than every other nation, and so is our housing policy. In a world of fast money for a few elites, the government can figure out a way to balance its own budget, and a wealth tax is common sense. This isn't about punishing success. It's about recognizing the difference between being wealthy on paper, earning a paycheck, and having the cash flow to afford a home. Any such policy would need to address valuation, liquidity, constitutional questions, and the risk of discouraging investment.
6. Save the homeowners insurance system. We talk constantly about mortgage rates, but insurance is becoming a serious threat to housing affordability. Across the country, homeowners are confronting rising premiums, shrinking coverage, and insurers retreating from disaster-prone markets. A home isn't truly affordable if you can't afford to insure it. Congress should work with states and the insurance industry to strengthen catastrophe protection, encourage resilient construction, improve transparency, and keep coverage available. Protecting homeownership means protecting the asset itself.
7. Stop charging homeowners for insurance they don't need twice. Here's one that deserves more attention: title insurance on refinances. If a homeowner already purchased title insurance when buying a property, why should refinancing routinely require another full lender's title insurance policy? The lender is changing. The property isn't. There are legitimate risks involving new liens and changes in title, but these can often be addressed through updated searches, endorsements, or lower-cost reissue coverage. Congress and state regulators should explore ways to reduce duplicative costs without sacrificing the protections lenders need. Making it cheaper to refinance could help millions of homeowners take advantage of lower interest rates when the opportunity arises.
The bigger picture: for three decades, my generation has gotten the short end of the stick. From 9/11 to COVID to climate change, there is an expectation that we outperform at all times. However you slice it, we are a resilient group. Now that 46-year-olds like me have more than just a couple of names in the federal government, this is policy we can all really come together on.
We still need to build more housing, reform restrictive zoning, and make development easier. But we also need to rethink the financial rules surrounding ownership. The mortgage deduction. Capital gains. Family tax credits. Local taxes. Insurance. Closing costs. Together, these policies influence whether a family can afford to buy, whether an existing owner can afford to move, and whether the next generation can build meaningful wealth.
Millennials aren't waiting to grow up anymore. We grew up. The policies didn't. It's time Washington caught up.
If you want to talk about what any of this means for your own move in Manhattan or Brooklyn, reach out to my team anytime. Call or text us at 718-938-5406, email me at [email protected], or visit newyorklovestherosenteam.com.
We Are The Key.
