Can Anything Kick-Start the U.S. Housing Market?

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Luke Vargas (0:33)

California's proposed billionaires' tax heads to November's ballot. Plus, a New York City board approves Mayor Mamdani's rent freeze.

And real estate editor Craig Karmin closes out our housing series by answering your questions like unless mortgage rates go down, can anything kickstart home sales?

Craig Karmin (0:53)

The only thing that I could really think of at the moment that would seem certain to bring down mortgage rates would be a severe economic slowdown or recession.

Luke Vargas (1:01)

It's Friday, June 26th. I'm Luke Vargas for the Wall Street Journal and here is the AM Edition of What's News, the top headlines and business stories moving your world today.

New York City's Rent Guidelines Board has delivered a win for Mayor Zoran Mamdani, approving a rent freeze for roughly a million of the city's rent-regulated apartments, a signature promise of his election campaign. One member of the board, Christina Smith, resigned ahead of yesterday's vote, saying its decision had been cemented after Mamdani appointed six members in February and the quote, everything since then has been theater. The rent freeze was ultimately passed seven to one over objections from some landlords who cited the rising cost of insurance and other expenses. Kenny Burgos leads the New York Apartment Association and spoke out against the rent freeze on PIX 11 News.

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The mayor inherited his housing crisis, but now he's going to own it. He is now choosing to freeze the rent while expenses are increasing, while his water board increases the rates to 6%, while property taxes doubled over five years, while insurance has skyrocketed.

Luke Vargas (2:11)

Mamdani called the vote a historic victory for tenants, describing it as the relief that working people deserve. The board's vote is likely to face legal challenges, as it's legally required to consider economic conditions in its decision, including costs such as taxes, utilities, maintenance, and more.

A proposed billionaire tax in California is heading to November's ballot. That's after unsuccessful efforts by Governor Gavin Newsom to persuade a health care workers union behind the tax to withdraw it. Speaking to The Journal podcast earlier this year, reporter Laura Nelson explained what makes the proposed tax so unique.

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Structurally, it's very different from the way that taxation has worked in the United States historically, which is that when something changes hands, then you pay taxes.

Luke Vargas (2:58)

Instead, Laura explained that the one time 5% levy would apply to California residents with net assets of a billion dollars or more.

SPEAKER_5 (3:06)

So that would mean tax collectors beginning something new, which is to take a look at the assets that people own and value them and then impose a tax on the value of those assets. So that could include stocks, that could include artwork, that could include intellectual property rights, that could be voting rights in a company that you started or helped to start. And the tax would apply to people who lived in California as of January of this year.

Luke Vargas (3:33)

90% of revenue generated by the tax would be earmarked for health care and the remainder to education and food assistance. The measure is teeing up a fight among Democrats, with Newsom warning that it could deter investment that drives the state's economy, even as polls show that a majority of Democratic voters support the tax. Complicating matters, a pair of measures funded by Google co-founder Sergey Brin and other billionaires are also heading to November's ballot, including one that would bar new taxes on a range of financial assets, and another that restricts how tax revenue can be spent in ways that directly conflict with the wealth tax.

Heading overseas, lawmakers in China are working on a new bill that would empower state prosecutors to file civil suits against foreign companies alleged to be damaging China's interests. The proposed law would add to an array of legal mechanisms Beijing has created in recent years in order to hit back at foreign sanctions and what Beijing considers coercion, particularly from the US. Defendants in civil lawsuits may be ordered to pay compensation and damages and can face criminal penalties if they fail to comply.

A final reading on the proposed law is expected to take place by the end of this year. Meanwhile, the Commerce Department has banned the majority Chinese-owned EV company Polestar from selling new cars in the US. The decision represents the first major casualty of a rule to ban Chinese software in new vehicles that connect to the Internet. Polestar said it would sell its remaining stock of vehicles in the US and provide access to service centers for repairs. The Commerce Department didn't respond to a request for comment.