Americans spend a significant portion of their income on housing. Following an election in which people were primarily concerned with the economy, policymakers are watching for signs of what President-elect Donald Trump intends to do to lower housing costs next year.
According to the most recent data available from the Bureau of Labor Statistics, housing accounted for 32.9% of consumer spending in 2023, making it the highest proportion of consumer expenditures. Additionally, that represented a 4.7% rise over 2022.
Whether they decide to buy or rent a home, many Americans are still having difficulty finding affordable housing this year.
Many housing advocates and economists are still unsure of what to anticipate from a second Trump term. Even with a Republican trifecta, the GOP would control both chambers of Congress and the White House, but it is unclear whether campaign pledges will become laws or administrative regulations.
For a preview of what might come next, however, policy experts, scholars, and economic analysts are examining Trump’s record, his recent housing statements, and Project 2025—the conservative Heritage Foundation’s 900-page blueprint to restructure the executive branch.
Tariffs and home construction costs
Trump has often mentioned his plan to impose a 60% tariff on Chinese imports, which he claims will increase the number of manufacturing jobs in the United States. Goods from other nations may be subject to 20% tariffs.
However, that might be bad news for the construction of more affordable housing, according to housing economists and other experts.
One of her primary worries about the consequences of a second Trump administration, according to Selma Hepp, chief economist for the financial services firm CoreLogic, is tariffs.
According to Hepp, one of the main issues is not only the price of lumber but also the rising cost of commodities in general.
According to an examination of October Producer Price Index statistics by the Associated Builders and Contractors, the cost of construction materials has increased by 38.8% since February 2020.
Building costs are already high due to tariffs on Canadian lumber that were initially imposed by Trump then maintained and raised by the Biden administration, according to Kurt Paulsen, professor of urban planning in the University of Wisconsin at Madison’s department of planning and landscape architecture.
A bid from a supplier, subcontractor, or contractor used to be valid for 60 days in the construction industry. “You don’t know where prices are going to be, so the bids are good for about five days,” he said.
The impact of immigration policies on construction workers
On November 18, Trump tweeted that he intended to utilize the declaration of a national emergency as a component of his plan to deport large numbers of people.
According to Hepp, Trump’s plan might affect the cost of building housing in addition to upsetting lives.
If we do have all these deportations, there is also the labor expense. “That’s a huge, huge worry,” she remarked. It goes without saying that foreigners make up a sizable portion of the workforce in the construction sector. That is a major problem for new building, especially when it comes to cheap housing.
According to the most recent American Community Survey statistics, 3 million of the 11.9 million individuals employed in the construction business in 2023 were foreign-born.
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Trump’s rhetoric is not in my backyard.
Regarding zoning laws and creating space for more affordable housing in a wide range of areas, the former president hasn’t always been clear about his position.
Trump criticized zoning laws and claimed they increase housing costs in a July Bloomberg interview. However, Trump also has a history of supporting a housing policy known as “not in my backyard,” or “NIMBY,” which kept some of these zoning laws in place. An Obama-era rule that linked HUD funds to identifying and minimizing housing discrimination in communities was rolled back by the Trump administration.
“You really can’t have it both ways,” Sarah Saadian, senior vice president of public policy and field organizing at the National Low Income Housing Coalition, said. “He will talk about lowering regulations on developers, but he will also use this NIMBYism to talk about protecting suburbs from low-income housing.”
According to Paulsen, Project 2025 supports opposition to anti-NIMBY strategies for multifamily housing expansion.
According to what I’ve read in the Project 2025 materials, each neighborhood and local community should have the freedom to decide whether or not to accept the housing they desire. The problem with that is that if every neighborhood and town has the power to veto housing, we simply won’t have enough housing, and prices and rents will continue to rise, he said.
A harsher strategy to combat homelessness
The number of homeless people reached its greatest point since the U.S. Department of Housing and Urban Development started keeping track of this data in 2007. According to the research, a shortage of affordable housing supply and the termination of pandemic safety nets that provided certain households with greater financial stability were factors in the number of homeless persons.
Trump has made it clear that he believes the homeless should be removed from our streets. Additionally, the president-elect has suggested placing homeless individuals with mental health disorders in mental hospitals.
In fact, cities need more coercive legislative instruments to enforce public order and to mandate that someone who is camping take a shelter placement even if they don’t want it, according to a movement that I believe is mainly reflected in Project 2025, Paulsen said.
According to Saadian, she is concerned about a shifting political landscape where policies that put secure housing above policing lose support in light of the U.S. Supreme Court’s decision in Grants Pass v. Johnson, which makes it simpler to punish homeless people for sleeping outside.
We’re obviously concerned about the cultural shift in the political dynamic here, which is demonstrated by all of that, she said.
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