A ‘For Sale’ sign is seen on March 19 in Austin, Texas. Policymakers are watching for indications of what President-elect Donald Trump plans to do to ease housing costs next year after an election where voters were laser-focused on the economy. Photo by Brandon Bell/Getty Images.
Americans hand over a huge chunk of their paycheck for a roof over their heads. Policymakers are looking out for indications of what President-elect Donald Trump plans to do to ease housing costs next year after an election where voters were laser-focused on the economy.
Housing accounted for 32.9% of consumers’ spending in 2023, making it the largest share of consumer expenditures, according to the most recently available data Bureau of Labor Statistics. And overall housing costs increased 4.7% from 2022.
This year, many Americans still struggle to find affordable housing, whether they choose to rent or buy a home.
There’s a lot economists and housing advocates still don’t know about what to expect from a second Trump term. It’s unclear which campaign promises will find their way into administrative rules or legislation, even with a Republican trifecta — the GOP will control the White House and both chambers of Congress.
But policy experts, researchers and economic analysts are looking at Trump’s record, his recent remarks on housing, and Project 2025 — the conservative Heritage Foundation’s 900-page plan to overhaul the executive branch — for a glimpse of what may lie ahead.
Tariffs and the cost of building homes
Trump has spoken frequently of his proposed 60% tariff on goods from China, which he has said would create more manufacturing jobs in the U.S. Tariffs could be as high as 20% on goods from other countries.
But housing economists and other experts say that could be bad news for building more affordable housing.
Selma Hepp, chief economist for CoreLogic, a financial services company, said tariffs are one of her main concerns about the effects of a second Trump term.
“One of the biggest concerns is not just lumber [costs], but the overall cost of materials, which have been going up,” said Selma Hepp, chief economist for CoreLogic, a financial services company.
Construction material prices have risen 38.8% since February 2020, according to an Associated Builders and Contractors’ analysis of October Producer Price Index data.
Kurt Paulsen, professor of urban planning in the department of planning and landscape architecture at the University of Wisconsin at Madison, said building costs are already high from tariffs on Canadian lumber that Trump first imposed and that the Biden administration kept and increased.
“It used to be in construction that you would get a bid from a contractor or a subcontractor or supplier and it would be good for 60 days. Now, the bids are good for like five days because you don’t know where prices are going to be,” he said.
Immigration policy and its effect on construction labor
Trump tweeted on Nov. 18 that he is planning to use the declaration of a national emergency as part of his mass deportation plan.
Besides disrupting lives, Trump’s plan could have effects on what it costs to build housing, Hepp said.
“There is the cost of labor as well, if we do indeed have all these deportations. That’s a big, big concern,” she said. “A large share of labor in the construction industry obviously comes from immigrants. That is a huge issue for new construction and particularly new construction as it relates to affordable housing.”
Foreign-born construction workers made up 3 million of the 11.9 million people who work in the construction industry in 2023, according to the latest American Community Survey data.
Trump’s ‘not in my backyard’ rhetoric
The former president hasn’t always been clear on where he stands with zoning regulations and making way for more affordable housing in a wide variety of neighborhoods.
In a July Bloomberg interview, Trump spoke critically of zoning regulations and said that they drive up housing costs. But Trump also has a record of tending toward a “not in my backyard,” or NIMBY, approach to housing that maintained some of these zoning regulations. The Trump administration moved to roll back an Obama-era regulation that tied HUD funding to assessing and reducing housing discrimination in neighborhoods.
“He’ll talk about reducing regulations on developers, but he’ll also use this NIMBYism talking about protecting suburbs from low-income housing and you really can’t have it both ways,” said Sarah Saadian, senior vice president of public policy and field organizing at the National Low Income Housing Coalition.
Paulsen said Project 2025 embraces a pushback against anti-NIMBY approaches to expand multi-family housing.
“What I read in the Project 2025 documents is a clear statement that says every local community and neighborhood should be able to choose the housing it wants to accept or not. The challenge of that is that if every community in every neighborhood can veto housing, then we just don’t get enough housing and prices go up and prices and rents go up,” he said.
A more punitive approach to homelessness
Last year, homelessness rose to its highest level recorded since the U.S. Department of Housing and Urban Development began collecting this information in 2007. The ending of pandemic safety nets that gave some households better financial stability and a lack of affordable housing supply contributed to the number of unhoused people, the report explained.
Trump has been outspoken on his view that homeless people should be “off our streets.” The president-elect has also proposed putting unhoused people with mental health issues into “mental institutions.”
“There’s a movement that I think is largely reflected in Project 2025 that says, actually, cities need more coercive policy tools to enforce public order and to require that someone who’s camping take a shelter placement even if they don’t want it,” Paulsen said.
Saadian said that given the U.S. Supreme Court ruling in Grants Pass v. Johnson, which makes it easier to criminalize unhoused populations for sleeping outside, she’s worried about a changing political environment where policies that prioritize stable housing over policing fall out of favor.
“I think all of that just shows a culture shift in the political dynamic here that we’re definitely worried about,” she said.
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