How Trump 2.0 Could Impact Affordable Housing
Industry leaders weigh in on policy priorities and concerns for the coming year.
As the multifamily industry prepares for a second Trump administration, officials are cautiously optimistic and similarly expressing concern about its implications for affordable housing. On the positive side, there is hope for progress on key issues like extending tax credits for low-income and workforce housing and cutting regulations that impede development. But worries persist that the president-elect’s plans for mass deportations and heavy tariffs could raise construction costs.
Multifamily will also be closely monitoring the confirmation process of cabinet officials such as Scott Turner, President-elect Donald Trump’s pick for secretary of the Department of Housing and Urban Development. A former Texas lawmaker and pro football player, Turner is currently chief visionary officer at JPI, a Dallas-based multifamily housing developer. He served as the head of the White House Opportunity and Revitalization Council in Trump’s first administration, which was formed to coordinate federal economic development resources in Opportunity Zones and other distressed communities. Opportunity Zones were created as a tool under the Tax Cuts and Jobs Act of 2017 to spur economic development in distressed areas throughout the U.S.
In Trump’s first term, he sought cuts to HUD’s budget, but Congress blocked most of them. It’s unclear whether there will be potential cuts to housing-related services in a new administration, but Trump has tapped businessmen Elon Musk and Vivek Ramaswamy to head up an advisory group dubbed the Department of Government Efficiency, which will be examining federal agencies and their budgets to suggest cuts to what the group considers wasteful expenditures.
“We’re leaning in positively that there are some opportunities to really help educate and serve as a resource when it comes to how any federal policy will impact affordable housing,” Debra Guerrero, The NRP Group’s senior vice president of strategic partnerships and government affairs, told Multi-Housing News. “We continue to position ourselves so that we have the opportunity to share those stories.”
Moving solutions forward
Officials at industry groups like National Multifamily Housing Council, National Apartment Association and the National Association of Home Builders agree with Guerrero, whose firm focuses on multifamily and affordable housing development.
“I think the good news is that everybody was talking about housing during the presidential campaign at a level that I’ve not seen,” said Greg Brown, senior vice president of government affairs, NAA. “It’s certainly not a good thing that we have the housing affordability challenges that we do. But it’s a good thing that the policymakers are focused on it.”
Brown hopes that this presidential-level attention will lead to more efforts addressing housing affordability. He also believes that leaders in Congress are thinking similarly.
“I think everybody seems to be on the same page, and even better from my perspective is that they’re all talking about supply,” he stated. “We need more housing everywhere. So that’s a good thing.”
NMHC President Sharon Wilson Géno said the group’s mission and goals remain the same—getting a regulatory environment that allows the industry to leverage the money it needs to build the housing America needs. She acknowledged that how they get to that point, and the industry’s best opportunities, may shift a bit under the next administration.
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But Géno noted that Trump has expressed great desire to remove federal regulations. This could help with housing development. While Trump did not offer specific housing proposals while campaigning, the Republican Party’s 2024 platform proposed opening portions of federal lands for new home construction, tax incentives to support first-time buyers and rescinding “unnecessary” regulations that could stimulate development.
Géno said the new administration could provide opportunities to move some commonsense solutions forward to encourage more affordable housing development.
“I think there’s a lot of opportunity in this anti-regulatory environment to remove barriers and create incentives and have enforcement opportunities to do that,” she said.
Also in the legislative mix is the Choice in Affordable Housing Act, which seeks to reform Section 8 and incentivize landlord participation in the resident-based housing assistance program. Géno pointed to the importance of Section 8 vouchers, noting the subsidy is important to families whose wages are not keeping pace with the cost of living.
“In an anti-regulatory environment, drop some of those barriers and help us make that program more effective for the owners of rental housing,” she said.
Cutting back on regulations could also help reduce costs and save time for federally funded affordable housing projects that had to abide by the Build America, Buy America provision of the 2021 Infrastructure Investment and Jobs Act or seek time-consuming waivers, Guerrero noted.
Tax reforms highlighted
With the TCJA provisions set to expire at the end of 2025, the first year of the second Trump administration will likely include a heavy focus on tax-related issues, including a push for additional corporate tax cuts. The new administration is expected to push for a renewal of the TCJA provisions, such as reducing individual income tax rates, establishing a 20 percent business income tax deduction for pass-through entities, preserving the 1031 like-kind exchanges and doubling the estate tax exemption.
Trump may also seek to expand the Opportunity Zone program by adding new areas and extending tax benefits to incentivize more development.
“We definitely see some clear opportunities,” said J.P. Delmore, assistant vice president for government affairs at NAHB. “I think the tax bill is one where we’re really hopeful that we’re going to see the tax code continue to be pro-growth.”
Delmore said that, by and large, the 2017 tax reform bill did work well for the economy and has generally been positive for housing. He said he’d like to see improvements made to the Opportunity Zone program to make it more beneficial for housing, particularly on the affordable side, and make it easier to use.
“We’re hopeful to see some of those provisions in there that apply particularly to multifamily, because multifamily is more tied up in the tax code in terms of some very specific provisions,” he said.
Further, affordable housing developers and trade industry groups are particularly focused on legislation to improve and expand the Low-Income Housing Tax Credit program. The Affordable Housing Credit Improvement Act has strong bipartisan support but is not expected to pass during the current session. Brown said the proposal is likely to be part of the broader tax reform package to be considered next year.
“It certainly is one of our top priorities for tax reform,” he said.
If passed, the changes are estimated to produce nearly 2 million more affordable housing units over 10 years, according to tax advisory and consulting group, Novogradac. Key provisions include increasing 9 percent credit allocations, generally reserved for new construction, by 50 percent and lowering the threshold of private-activity bond financing from 50 to 25 percent to enable more 4 percent bond deals.
Delmore previously told Multi-Housing News that the 4 percent change would likely have an immediate impact on funding affordable housing projects by almost doubling the amount of deals that could be awarded bonds, and ultimately credits.
Industry organizations also strongly support the Workforce Housing Tax Credit Act. Introduced in December 2023, it would be similar to the LIHTC program and could finance an estimated 344,000 rental homes for middle-income residents such as police, firefighters, teachers and others whose household income is between 80 to 120 percent of Area Median Income.
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Brown noted that it’s very difficult to build for the median-income range without subsidies.
“We and a lot of other folks believe that building on the successful model of LIHTC is worthwhile and there’s plenty of tax appetite,” he said.
NMHC, NAA and NAHB are all also supporters of the Yes In My Backyard Act, which would require localities to report back to the government about the efforts they are making to lower barriers to development. Géno was among the housing leaders and members of Congress who attended the Nov. 21 launch of the new bipartisan YIMBY caucus in front of the U.S. Capitol. The caucus’s goal is to expand housing supply and promote housing development across the country.
While it wouldn’t direct how local zoning and permitting should allocate/commit any funding, it would require recipients of Community Development Block Grants to monitor and report on the progress of land-use policies that promote housing, including changes to density, heights and other zoning issues.
Tariff, immigration concerns
Two more priorities of the incoming Trump administration that could impact affordable housing will be the president-elect’s plans to crack down on illegal immigration and ramp up tariffs. Deporting a large number of undocumented individuals could impact the number of construction workers in the U.S., officials said. While the president-elect and his “border czar,” Tom Homan, plan to focus initially on those committing criminal acts, there are concerns that it would eventually expand to larger immigrant communities.
Guerrero noted that approximately 30 percent of the construction workforce is foreign-born and even those that may be working in the U.S. legally may be scared by the threat of deportation. She added that any policy changes should “be done in a thoughtful way.”
Noting that there is already a huge shortage of construction workers, Delmore said any changes to the immigration system, including to the Deferred Action for Childhood Arrivals program or Temporary Protected Status, could create additional labor challenges.
“If the Trump administration is going to focus on immigration, that’s going to become a bigger factor,” Delmore said. “With about a third of our workforce being foreign-born, we need to make sure that we are putting in career pathways for Americans to go and get in a field that pays really well.”
As for tariffs, it’s unclear whether Trump is using threats of tariffs on products coming into the U.S. as leverage to get better trade deals or if he will enact them. On the campaign trail, he said that he’d impose 10 or 20 percent tariffs on every import and a tariff as high as 60 percent for Chinese goods. More recently, he stated that he wanted to put a new 25 percent tariff on all products from Mexico and Canada, as well as a raising tariffs on Chinese imports by 10 percent on Jan. 20.
Guerrero said that any tariffs on construction materials will raise development costs. “We need to articulate the impacts of whatever federal policies that are out there and how they impact housing affordability,” she added.
