HOUSING

 Planetizen -  Although a significant number of voters say housing was one of their top issues heading into the voting booth, housing supply — particularly housing that is affordable to middle- and low-income households — will likely continue to be a major problem nationwide under a Trump administration. Trump has floated the four policy proposals below to address housing costs and scarcity, but they are unlikely to move the needle in a significant way over the next four years; indeed, some economists say they might actually exacerbate the problem.

1. Opening federal lands for construction to increase housing supply is a solution floated both by Trump and Kamala Harris on the campaign trail. In July, Biden called on federal agencies “to assess surplus federal land that can be repurposed to build more affordable housing across the country.” But surplus federal lands typically aren’t located in the large urban areas where new housing is needed, so it’s not clear if this would have an impact. Moreover, building housing on previously undeveloped sites means the added cost of new infrastructure such as roads, water pipes, and power lines.
2. On the campaign trail, Trump promised to bring down interest rates and in turn, mortgage prices. During his first term, he unsuccessfully pressured the Federal Reserve to cut interest rates. In a second term, he may be constrained by the same factors: The Fed is an independent entity and not subject to the bidding of the president, though some expect the current Fed Chair Powell could be replaced (and any new chair would be subject to Senate confirmation); Trump’s proposed tariffs and deportation of undocumented immigrants would likely increase inflation by making both raw materials and labor more expensive — most likely prompting the Fed to raise interest rates.
3. President-elect Trump and Vice President-elect Vance have floated their proposed mass deportation of undocumented immigrants as a solution to free up housing supply and lower housing prices. Setting aside the human rights issue with tearing people away from their families and communities, mass deportation is guaranteed to disrupt the construction labor market, 30 percent of which is made up of immigrants, according to the National Immigration Forum, which also claims that the industry needed to add half a million new workers in 2024 alone to meet new demand. Factoring in the potential for mass deportations in 2025 and associated delays in restaffing, or a sustained inability to find cost-efficient labor due to a lack of immigrant workers, we can likely expect to see the cost of construction rise significantly over Trump’s term, translating to fewer new homes, and higher costs for would-be homeowners. However, the argument upon which Trump’s deportation plan is in part built on is that by carrying out his proposed mass deportations, the cost of housing will become cheaper overall. That's because housing units aren't like jobs. If you deport someone working at Target, you're freeing up that job, but removing an entire consumer from the market, damaging the economy overall and reducing the number of jobs available thanks to economic shrinkage. But unlike their jobs, the deported person’s housing remains, even if the economy crashes in the process — a small consolation prize for Americans looking for relief from high housing costs.
4. One policy that could positively impact the number and frequency of new homes being built is Trump’s support of deregulation. There is a lot of red tape around building homes, something which often extends building timelines and therefore the overall cost of construction. While state and local governments control the majority of regulations around housing construction, the federal government has control over some, including energy efficiency requirements, Clean Water Act regulations, and building codes for FHA borrowers’ homes, all of which could be loosened or streamlined.