How an antitrust victory could help Biden win a dormant 2024 election issue

President Joe Biden recognizes that high housing costs are an obstacle to his re-election bid.

“What I’ve seen lately, the combination of inflation, the cost of inflation and all these things, for good reason, really worries people,” he said in a May interview with CNN. “That’s why I’m working very hard to reduce rental costs and increase the number of homes available.”

On Thursday, a coalition of progressive groups sent the Biden administration a gentle reminder of the powerful argument it can use to show that it has already begun to lower home-buying costs for millions of Americans. Moreover, it comes at the expense of a politically powerful industry, which also sums up his administration’s approach to the economy.

“President Joe Biden has made the need to stop anticompetitive practices in the housing market a cornerstone of the administration’s pro-competitive agenda,” progressive groups led by Demand Progress wrote in a Thursday letter to Attorney General Merrick Garland and Jonathan Kanter, who leads the department’s antitrust work. “The (National Association of Realtors) Antitrust Division’s investigation of harmful practices and the broader program to expand housing opportunities are having a real impact.”

Earlier this year, the Department of Justice helped secure an agreement that effectively ended a long-standing practice of home sales in the U.S.: A 6% sales commission was all but guaranteed to real estate agents negotiating home purchases. The settlement was negotiated by private attorneys for homebuyers who alleged that the politically powerful National Association of Realtors, which represents most of the nation’s real estate agents, was violating federal antitrust law.

The lawsuits, one in Missouri and one in Illinois, alleged that association rules requiring a purchasing agent to offer a commission to selling agents inflated the fees paid by homebuyers. The long-standing system meant that a home valued at $400,000 – about the average cost of a home in the United States – required sellers to pay a commission of $24,000, a much higher cost than in other wealthy countries.

These private lawyers and homebuyers were supported by a powerful public ally: the Biden administration’s Department of Justice, which was investigating the Realtors Association and anticompetitive practices in the real estate industry. Lawyers and advocates say additional scrutiny from the Justice Department helped solidify a victory that could save Americans billions of dollars a year and significantly lower the cost of purchasing a home.

“When public and private law enforcement agencies work together to solve major problems, the American people always benefit,” said a private attorney who worked on the cases, who requested anonymity to speak candidly about the Justice Department’s role.

In a statement, an NAR spokesman said the group does not set a standard commission.

“The rule at issue merely requires MLS participants to make an offer of compensation to other MLS participants. “This offer can be any amount, up to zero,” the spokesman said, referring to the many sites real estate agents use to share information about properties for sale. “(NAR) policy expressly prohibits the setting, control, recommendation or suggestion of commissions or fees, including any offer of compensation. NAR does not set commissions – they are and continue to be negotiable.”

The success also stands in direct contrast to former President Donald Trump’s friendly approach to the real estate industry and demonstrates the Biden administration’s aggressive approach to antitrust law – also evident in challenges for large mergers and go to prohibit non-compete agreements — is already delivering significant results for consumers.

Home prices have emerged as a dormant issue in the 2024 race, with Trump attacking Biden on the issue and Biden struggling with plans to make renting or buying a home more affordable. High interest rates have driven up housing costs, which have remained high for years as cities fail to allow sufficient housing construction. Biden is keen to get credit to lower housing costs, proposing a $10,000 mortgage tax credit for families making less than $250,000 a year during his State of the Union address.

Home prices and rental costs have risen particularly in the swing states of Arizona and Nevada. In a Gallup poll last month14% of Americans said the cost of owning or renting a home was their family’s biggest financial concern, more than those who cited health care, gas or tax costs.

Biden, who trails Trump in most public polls by a steady but manageable lead, has so far struggled to erase Trump’s significant lead on the economy. His campaign team hoped that his antitrust agenda – which included fighting the so-called garbage fees, a ban on non-competition agreements and an end to business consolidation – may prove to be a strong message and prove to voters that Biden is on their side.

Bharat Ramamurti, former deputy director of Biden’s National Economic Council, said the new housing agreement is one of the biggest victories of the president’s antitrust agenda, which aims to challenge the industry-friendly status quo and reverse more than four decades of corporate consolidation.

“The most powerful tool the administration has between now and the end of the year to show progress in lowering home prices is undoubtedly this agreement,” Ramamurti said of the agreement. “It is also a powerful document because it gives a real-life example of how a competition program drives down the prices people pay every day.”

Biden celebrated the agreement when it was first announced in March, but avoided directly mentioning the Justice Department’s role in pressuring the industry. “I urge real estate agents to continue lowering their commissions to protect homebuyers,” he said during a speech in Las Vegas, Nevada.

But now his campaign seems eager for a contrast with Trump.

“Joe Biden knows how hard middle-class families work to put food on the table – that’s why he’s fighting to lower housing costs, prescription drug prices and health care premiums. But from his headquarters at Mar-a-Lago, Donald Trump will rely on his billionaire tax cuts and his long history of exploitative and discriminatory landlordism to make it harder for working families to pay rent or buy their first home. said Charles Lutvak, a spokesman for the Biden campaign.

The actions of the candidates’ respective Justice Departments further deepen the contrast: Trump’s Justice Department reached an agreement with the Realtors Association late in his administration requiring only minimal changes to the group’s code of ethics and rules regarding multiple listings of the service, an industry term for local associations real estate agents who share information about properties for sale.

Less than a year later, Biden’s Justice Department withdrew from the deal, saying the department “cannot be bound by a settlement that prevents us from protecting competition in a market that profoundly affects Americans’ financial well-being.” It has reopened an investigation into the industry, which is still ongoing. Last month a judge rejected an attempt by intermediaries to re-impose the contract.

However, before the election, the Trump campaign predicted that voters would blame Biden for high interest rates, which directly raise mortgage costs.

“In addition to sky-high rent, gas and grocery prices, Bidenomics has made the American dream of home ownership unattainable for families across the country. “Under Joe Biden, interest rates and mortgage payments have reached record highs, and affordability for middle-class Americans has reached record lows,” said Karoline Leavitt, national press secretary for the campaign. “Fortunately, President Trump has promised to cut spending, cut taxes and lower costs, and voters will welcome that relief when Crooked Joe retires in November.”

The current announcement is in line with Trump’s industry-friendly approach, which has even reached out to real estate agents at a 2019 event in Washington, D.C. “When a young family needs room to grow; when a new job starts a new adventure in a brand new, beautiful city; when parents want to find the right neighborhood and school for their children, Americans trust you, our great real estate agents,” he said at the time.

“NAR is a nonpartisan organization, and each year we regularly invite a sitting U.S. president to speak at our event,” a spokesman for the group said, adding: “We do not endorse or fund presidential candidates.”

NAR’s influence in Washington, however, goes far beyond Trump. The group, which has significant membership in every state and congressional district, has long been one of Washington’s biggest spenders on lobbying and campaign contributions: Since the 1990s, the group has contributed more than $95 million to campaigns, sometimes even directly intervening in races with their own TV commercials.

ADJUSTMENT: A previous version of this story incorrectly reported that Donald Trump was the first president to address a group of real estate brokers in 2019. Many presidents of both major parties have attended the association’s meetings over the past century.