How Trump Could Make Housing Affordable Again
By KIMBERLEY HAAS
When Donald Trump starts his second term as President of the United States, he will be facing unprecedented challenges in the housing market.
Housing is a leading cause of rising costs for American families. National home prices have jumped nearly 40% over the course of the last four years.
Mortgage rates, which affect affordability for borrowers, are unlikely to decline meaningfully in 2025.
At the same time, many of the counties that swung most dramatically for Trump in November have some of the toughest housing markets, according to an analysis of election returns.
So what can Trump do as President to make housing affordable again?
During an AEI Housing Center webinar on Jan. 7, Co-Director and Senior Fellow Edward Pinto said America’s housing crisis is at the point where it qualifies as a national emergency – in large part due to a severe shortage of housing – and all federal departments and agencies should be directed to act accordingly.
Pinto said Trump has talked about selling federal lands for residential use, reducing regulations, and deporting people who are in the country illegally. Increased deportation may remove some of the pressure on the housing market, he said.
Trump can push for increased energy production and the expansion of logging in national forests.
“These are things the federal government can do to make housing more affordable,” Pinto said.
AEI estimates that the federal government, states, and municipalities could add 18 to 21 million homes over 10 years.
They say if the Bureau of Land Management auctioned off 800 square miles of land suitable for residential development in 10 western states, that could add four million homes. Light-touch density and livable urban villages that allow for residential development in commercial, industrial, and mixed-use zones could make up the rest.
“There’s lots of opportunities here for the federal government to provide this land and there’s lots of opportunities for state and local governments to add to supply that is much more affordable than what is being built today,” Pinto said.
Trump’s administration can also work to make things more fair and effective.
Pinto suggests eliminating tax deductions for second homes, saying that kind of ownership should not be subsidized. The Secretary of the Treasury can identify and propose such changes, he said.
Pinto said Trump can also call upon the Secretary of Housing and Urban Development to evaluate the effectiveness of all subsidized housing programs.
“My research has shown that the federal government recycles properties time after time and pours money into it and no one ever goes back and says, ‘Well, how much do we actually spend to provide this housing?’ We know that New York City has public housing, large amounts of it, but it needs billions and billions of dollars in repairs. These programs have been largely ineffective, yet the government keeps pouring more and more money into them,” Pinto said.
Trump’s inauguration is scheduled to take place on Jan. 20.