What We Can Expect on Housing Affordability from President Trump in 2025

Author: Ben Metcalf

At President Trump’s election night speech, he highlighted the broadened electoral coalition that propelled him to victory, noting support from Latinos, Asian Americans, youth, and other traditionally Democratic constituencies. Although there are varied reasons behind this shift, post-Covid inflation, and particularly frustration over rising rents and the elusive prospect of homeownership clearly played a role. His campaign committed to boost housing supply and increase homeownership but his promises raise concerns:

• Cutting Red Tape While Trump’s pledge to immediately reduce regulations to spur housing development aligns with an emerging bipartisan consensus, his focus on federal regulations overlooks what are generally understood to be the primary regulatory cost drivers: locally enacted zoning and land use controls and state building codes. Indeed, his stated support for protecting the suburbs and encouraging exclusionary zoning is likely to undercut gains his administration achieves by reducing or eliminating federal regulations.
• Mass Deportation Trump’s plan to deport undocumented immigrants, purportedly with the anticipated side benefit of reducing housing demand and thus home prices, faces practical and ethical challenges. The removal of millions of people from the United States will provoke fear, economic disruption and would take years to actually happen. Yet the threat of deportation will have immediate consequences—detering the substantial undocumented workforce from showing up at construction sites, exacerbating shortages in a sector already struggling to find skilled workers and contain growing construction costs.
• Tax Reform Trump has committed to promptly lowering federal taxes, especially for corporations. While this can reasonably be expected to stimulate housing construction (and has already buoyed homebuilder stock prices), there is a downside. Federal deficit spending due to foregone tax revenue will increase the pressure to make offsetting cuts in non-defense discretionary spending, including housing assistance programs administered by the US Department of Housing and Urban Development. And, more immediately, the prospect of tax cuts are already increasing long-term bond yields, raising borrowing costs for both homebuilders and homebuyers.
• Tariffs Trump’s proposed tariff hikes on imported goods, such as Canadian lumber and Chinese steel, pose another threat to the housing sector. Since the costs of increased tariffs are generally passed to consumers, homebuilders will face higher material expenses, raising costs and making it even harder to build homes.

It’s hard to see how Trump’s housing plans provide immediate relief for rising rents and home prices. Perhaps the best hope on this topic is Trump’s knack for evolving his policies to meet the political moment. As the challenge of governing—and the electoral reality of keeping a broadened base of renters within the Republican tent—becomes clear, he may shift course to find more constructive housing policies. But until that time, a growing burden is likely to fall on states and localities to address the very real housing challenges facing millions of Americans across the country.

Managing Director Ben Metcalf’s commentary was originally featured in the Berkeley Public Policy Journal.