Americans spend a enormous portion of their salary on a roof over their heads. Policymakers are looking for clues about what President-elect Donald Trump plans to do to reduce housing costs next year after an election that left voters heavily focused on the economy.
Living space taken into account 32.9% It accounts for a majority of consumer spending in 2023, making it the largest share of consumer spending, according to the latest available data from the Bureau of Labor Statistics. And that was an raise of 4.7% compared to 2022.
This year, many Americans are still struggling to find affordable housing, whether they choose to rent or buy a home.
Many economists and housing advocates still don’t know what to expect from a second Trump term. It’s unclear which campaign promises will find their way into administrative regulations or law, 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 comments on housing, etc Project 2025 — the conservative Heritage Foundation’s 900-page plan to transform the executive branch — for a taste of what could lie ahead.
Tariffs and costs for building a house
Trump has spoken frequently about his proposed 60% tariff on goods from China, which he said would create more manufacturing jobs in the United States. Tariffs could be as high
20% on goods from other countries.
But real estate economists and other experts say that could be bad news for building more affordable housing.
Selma Hepp, chief economist at CoreLogic, a financial services firm, said tariffs are one of her main concerns about the impact of a second Trump term.
“One of the biggest concerns isn’t just about wood [costs]but the overall cost of materials has increased,” Hepp said.
Building material prices have increased by 38.8% since February 2020. accordingly an Associated Builders and Contractors analysis of October producer price index data.
Kurt Paulsen, a professor of urban planning in the Department of Planning and Landscape Architecture at the University of Wisconsin at Madison, said construction costs have already increased because of tariffs on Canadian lumber that Trump initially imposed and that the Biden administration has maintained and increased high.
“It used to be that in construction you would get a quote from a contractor, subcontractor or supplier that was valid for 60 days. Now the bids are valid for about five days because you don’t know what the prices will be,” he said.
Immigration policy and its impact on construction work
Trump tweeted On November 18, he announced that he planned to utilize the declaration of a national emergency as part of his mass deportation plan.
Trump’s plan could not only disrupt lives, but also impact the cost of housing, Hepp said.
“There are also the labor costs if all these deportations actually happen. This is a big, big concern,” she said. “A large portion of the construction workforce obviously comes from immigrants. This is a big problem for new buildings and especially for new buildings when it comes to affordable housing.”
Foreign-born construction workers were educated 3 million of the 11.9 million people working in the construction industry in 2023, according to the latest data from the American Community Survey.
Trump’s “not in my backyard” rhetoric
The former president hasn’t always been clear about his views on zoning regulations and creating more affordable housing in a variety of neighborhoods.
In a Bloomberg interview in July, Trump was critical of zoning regulations, saying they drove up housing costs. But Trump has also been shown to lean toward a “not in my backyard,” or NIMBY, approach to housing that has retained some of these zoning regulations. The Trump administration has decided to roll back an Obama-era rule that tied HUD funding to assessing and reducing housing discrimination in neighborhoods.
“He’s going to talk about reducing regulations on developers, but he’s also going to use that NIMBYism and talk 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 includes a pushback against anti-NIMBY approaches to expanding multifamily housing.
“What I read in the Project 2025 documents is a clear statement that each local community and neighborhood should be able to choose what housing they want to accept or not. The challenge with this is that if every municipality in every neighborhood can veto housing construction, we simply won’t get enough housing and prices will go up and prices and rents will go up,” he said.
A more punitive approach to homelessness
Last year, homelessness rose to its highest level since the U.S. Department of Housing and Urban Development began collecting this data in 2007. The end of pandemic safety nets that provided some households with greater financial stability, and a lack of affordable Housing contributed to that number of homeless people, the report said.
Trump has made clear his view that homeless people should “get off our streets.” The president-elect has also suggested putting homeless people with mental health problems in “mental institutions.”
“There is a movement, which I think is largely reflected in Project 2025, that cities actually need more political coercion to enforce public policy and require that someone who is camping accept emergency shelter, even if they are “I don’t want to,” Paulsen said.
Saadian said this in lightweight of the US Supreme Court ruling Grant’s pass to JohnsonShe is concerned about a changing political environment in which policies that prioritize stable housing over policing are falling out of favor.
“I think this all just shows a culture shift in the political dynamics here that we’re definitely concerned about,” she said.
