Kamala Harris needs to align 2 key parts of her housing plan if she wants to fix the affordability crisis

• Kamala Harris wants the US to build 3 million new homes to combat the housing shortage.
• She also plans to $25,000 down payment support for first-time homebuyers.

Kamala Harris's housing agenda promises to fix the US housing shortage with 3 million new homes.

While that would address the supply issue at the heart of the affordability crisis in the US, other proposals — like down payment support for first-time homebuyers— will likely boost demand considerably.

The two opposing forces need to be carefully aligned for the US to see any real gains in housing affordability, a think tank expert told Business Insider.

"Housing is one of the markets that has a lot of different actors involved," Jung Hyun Choi, a researcher at the Urban Institute's Housing Finance Policy Center, told Business Insider.

"These different actions wouldn't fully solve the problem unless we have everything in line with each other," she added.

Harris, the Democratic party nominee and current Vice President, unveiled a plan to build 3 million new homes to help close the gap on the estimated shortage of 4 million to 7 million homes.

She also plans to boost supply with policies that makes affordable housing easier to build, with quicker approval for projects close to public transit, $100 million in grants to remove red tape in areas lacking affordable housing, and tax incentives for builders.

But if these policies don't have a sizable impact on supply before Harris enacts her policies on the demand side, the housing shortage may only get worse.

Among the policies that could stimulate demand is $25,000 in down payment support for first-time homebuyers.

While the policy is meant to help increase affordability, Choi warns that if wealthy first-time homebuyers use down payment assistance, it could drive up demand, causing price hikes in already-expensive markets.

The median home sale price jumped to a record $426,900 in June, up 4.1% from the year before, according to data from the National Association of Realtors.

"The timing and targeting are really important for [down payment assistance] not to have the spillover effect on increasing prices," she said, adding the policy should first target low- and middle-income first-time homebuyers who wouldn't be able to afford to buy a home.

Doing so would also help prevent a deepening wealth inequality gap, Choi said.

The current housing shortage and high prices are keeping many Americans, especially younger and low-income families, locked into the rental housing market. As rental prices have gone up post-COVID, renters are falling behind homeowners in building their savings, Choi said.

"This is a problem that could have long-term consequences," Choi said.

As a result, Choi thinks Harris's housing agenda should specify a narrower timeline for introducing the down payment policy and who it will target after strengthening the housing supply.

"We do have to kind of closely look into the market and see how much supply is being added before we quickly implement any of the down payment," Choi said.