With affordable housing becoming a growing issue across the country, Donald Trump and a new Congress will take office next year.
Trump returns to the White House four years after losing his bid for reelection in 2020. While the new administration and a Republican-controlled Congress have yet to take office, some insight can be gained from Trump’s first term.
The first Trump administration sought on multiple occasions to severely slash the Department of Housing and Urban Development (HUD) budget and suspended the Obama administration’s Affirmatively Furthering Fair Housing regulation, delivering a big blow to fair housing efforts. Tax reform efforts also created uncertainty for the critical low-income housing tax credit (LIHTC) market.
“As we did during his last administration, the National Low Income Housing Coalition (NLIHC) will mobilize our members and partners across the nation and work closely with our congressional champions to oppose any cruel or harmful measure offered by President-elect Trump and his administration that would undermine housing justice, exacerbate racial and social inequities, and worsen America’s housing and homelessness crisis,” said NLIHC president and CEO Diane Yentel in a statement.
“NLIHC and our partners successfully defeated many extreme policies during President Trump’s first term, and we are prepared to do the same now,” she said.
“NLIHC will also—as it always has done—look for potential areas of agreement with all policymakers to advance solutions that protect tenants, alleviate the housing crisis, and advance racial and housing justice.”While Yentel’s organization and other housing advocates vehemently opposed many of Trump’s proposals, there were a few areas of agreement.
Trump signed into law billions of dollars to address urgent health and housing needs during the COVID-19 pandemic, including $25 billion for emergency rental assistance, and implemented a national eviction ban to help keep families stably housed, noted NLIHC, adding that those were priorities for the coalition.
Eye on HUD
The prior Trump administration was interested in how regulatory burdens could be reduced to lessen the cost to build housing, according to Denise Muha, executive director of the National Leased Housing Association (NLHA).
“That may still be part of the discussion, which is a good thing,” she told Affordable Housing Finance. “We know that almost 40% of the cost to build is related to regulatory issues. What is different today is that the environment has changed—affordable housing is now a kitchen table issue so I imagine there will be more effort and interest to coalesce around additional strategies to encourage or facilitate the production of housing. I wonder if the talk about the proposed tariffs will be tabled, as the last thing we need is for the cost of building supplies to go up.”
Sarah Brundage, president and CEO of the National Association of Affordable Housing Lenders (NAAHL), also expects to see interest in easing regulatory restrictions.
“It is likely the new Trump administration will pick back up where they left off in the first Trump administration,” she said. “However, I believe this Trump administration will have a greater focus on housing supply than it previously did given how housing affordability emerged as a top issue in the 2024 presidential election. It is likely the Trump administration will, once again, focus on removing regulatory barriers as part of their housing strategy.”
In addition, many housing advocates will be closely watching what happens with the federal budget. In his first term, Trump supported slashing billions of dollars from longtime HUD programs, including eliminating Community Development Block Grants and the HOME program. However, those moves were thwarted by Congress.
“At NLHA, I am always focused on federal funding to ensure that subsidized residents continue to be housed and that properties have sufficient operating income to operate,” Muha said. “The appropriators—both Republican and Democrat— have in the past been committed to keeping residents in place, and I expect that to continue, but we will not take our eyes off of the ball.”
David Gasson, a partner at MG Housing Strategies, is also concerned about how HUD will fare in the future. “If you look at some of the materials generated by ‘outside groups’ aligned with the Trump campaign, they suggest scaling back on HUD’s role, focusing on tenant-based vouchers and away from PBRA [project-based rental assistance], eliminating any focus on equality or race-based assistance, emphasize work requirements, and that assistance should be temporary,” he said.
Gasson noted that the industry still needs to see who some of the key players will be in the new administration.
In the days following the Nov. 5 election, Trump has been quickly putting together his cabinet. Some media outlets have reported that Bill Pulte, CEO of Pulte Capital, is a candidate for HUD secretary. He’s the grandson of the late legendary home builder William J. Pulte of Pulte Homes, but Bill Pulte is no longer involved in the company.
Trump’s first housing secretary was Ben Carson, a retired neurosurgeon who did not have a housing background.
AHCIA Prospects
Affordable housing advocates have long been calling for the expansion of the low-income housing tax credit (LIHTC). They’ve helped pass key changes to strengthen the housing tax credit and have built strong bipartisan support for the LIHTC program over the years, but passage of the full Affordable Housing Credit Improvement Act (AHCIA) has been elusive.
The legislation seeks to increase the amount of available housing credits, lower the bond financing threshold to 25% to receive the full amount of 4% housing credits, and make other changes.
It remains to be seen if the election has enhanced or diminished the prospects for the AHCIA and other affordable housing legislation, according to Gasson.
“… I would guess we will need to focus once again on the resource provisions of the AHCIA,” he said. “There is going to be so much competition for inclusion in the tax bill, and we need to be ready to demonstrate that what we are proposing will generate units efficiently in all parts of the country and address significant housing needs.”
The good news is that the AHCIA has more than 300 co-sponsors in Congress this year, and key supporters are returning to Washington.
“None of our lead AHCIA champions lost their reelections, and we are still expecting Sens. Todd Young (R-Ind.) and Maria Cantwell (D-Wash.) and Reps. Darin LaHood (R-Ill.) and Suzan DelBene (D-Wash.) to continue leading the charge on the housing credit,” said Emily Cadik, CEO of the Affordable Housing Tax Credit Coalition.
The only lead co-sponsor that is not returning is Rep. Brad Wenstrup (R-Ohio), who had already announced his retirement. “However, we are losing close to 50 AHCIA co-sponsors in the next Congress between retirements and races that were lost—a fairly standard amount, but it underscores the need for quickly educating new members and cultivating new champions,” Cadik said.
With a “Republican trifecta” in place, she expects negotiations over major tax legislation to move quickly next year.
“More than $4 trillion worth of tax cuts from the 2017 Tax Cuts and Jobs Act are expiring in 2025, which will be a top priority for the White House and Republicans in Congress,” Cadik explained. “Republicans will have the option to use the budget reconciliation process, which allows them to pass legislation with only 50 votes in the Senate (instead of the usual 60) and bypass the need for any Democratic support. We expect them to begin immediately negotiating which policies from the 2017 tax law will be extended, what other tax policy proposals will be included, how much of the cost of the legislation will be paid for, and what offsets will be used.
“Because of the broad, bipartisan support we have built for the housing credit, we believe there is a real opportunity to include long-overdue housing credit provisions in the forthcoming major tax legislation. A historic expansion of the housing credit was included in legislation that passed out of the Republican House with an overwhelming vote of 357–70 earlier this year and sets a precedent that we will work to build on in the coming weeks and months. Though we have laid a strong foundation, there are still a number of risks and complicating factors, and advocacy from the affordable housing community will be essential to get these proposals across the finish line. I believe the industry has learned the value of speaking with one voice, and it will be especially important that we continue to do so in this high-stakes environment.”
National Apartment Association’s Greg Brown, senior vice president of government affairs, added that the organization will continue to ensure the perspectives of the nation’s housing providers are heard and valued in important policy conversations.
He agreed with Cadik that tax policy will be front and center in the new year.
“NAA will work to protect critical elements—including individual tax rates, the 20% qualified business income deduction (Section 199A), and the expanded estate tax exemption—that support the industry and long-term affordability,” Brown noted.
“NAA will also advocate for tax incentives to boost housing supply and increase affordability, including expanding the LIHTC, enacting the Workforce Housing Tax Credit Act, and enhancing Opportunity Zones.”
He added that NAA would also remain focused on sustainable housing solutions, including enhancing housing assistance programs like Section 8 in the short term and reducing barriers to apartment development in the long term.Longtime affordable housing industry leader Bob Moss looked to some positive signs in Congress.
“Our hope is that the new administration will recognize that housing affordability is the No. 1 driver of inflation, and that production resources must be made available as soon as possible, beyond current levels,” said Moss, a partner at MG Housing Strategies. “We are heartened that the Senate selected Sen. John Thune (R-S.D.), a longtime housing supporter, as Senate majority leader, and grateful for the leadership and support of the LIHTC that Ways and Means chairman Jason Smith (R-Mo.) continues to provide. ”
Other Housing Moves
With housing emerging as a key issue, there’s a likelihood that the administration and Congress will look at a number of other moves.
“The Trump campaign was pretty clear that increasing housing supply and reducing regulator barriers would be at the top of their agenda. There’s broad bipartisan support for housing supply action in Congress,” said David Dworkin, president and CEO of the National Housing Conference.
In addition to the strong sponsorship behind the AHCIA, there’s bipartisan support for the Neighborhood Homes Investment Act, pointed out Dworkin.
Based on the LIHTC program, Neighborhood Homes seeks to establish tax credits to attract private investment to build and rehabilitate homes for lower- and middle-income homeowners.
“We are looking forward to working with the new administration on regulatory reform initiatives that make housing development more productive,” Dworkin said.
“I’m sure there will be disagreement on some issues, but that’s always the case with any administration. Ultimately, personnel is policy, so who gets the key leadership positions will indicate a lot.”He would like to see early action on housing supply in a tax bill.
“It’s a real opportunity to put big housing points on the board with bipartisan support,” Dworkin said. “We are millions of units of affordable housing short of what we need, so every unit matters.”
NAAHL’s Brundage agreed it’s time for Congress to deliver meaningful relief to the nation’s renters and homeowners.
“Thankfully two key proposals have impressive bipartisan support: the AHCIA being the signature affordable rental supply legislation, and the Neighborhood Homes Investment Act being the leading affordable homeownership supply legislation. We might see a faster pathway to a large tax package, but, in many ways, both bipartisan proposals are ripe for passage regardless of the election,” she said.
The National Multifamily Housing Council (NMHC) also expects to see significant action on housing policy in the years ahead at all levels of government.
“There is now an opportunity for lawmakers in both parties to develop a housing policy framework that is better coordinated among lawmakers—from federal to local—to expand housing supply and opportunity while lowering costs,” said NMHC president Sharon Wilson Géno. “Voters have shown that they understand which type of housing policies work and which don’t—as evidenced by the convincing, bipartisan defeat of Proposition 33 in California that would have led to expanded rent regulations.”
She noted that it was a closely contested election and that housing was an important issue to voters.
“Therefore, lawmakers will be incentivized to consider middle-of-the-road housing policies that are based on clear data and that make sense to common sense voters,” Wilson Géno said.
Areas of Optimism
While there are big concerns ahead, housing leaders also pointed out reasons to be optimistic.
“There are some great people who are interested in leadership roles in the administration’s housing policy,” Dworkin said. “I’m hopeful they will be the ones President Trump relies upon.”
There’s also been concern in the affordable housing arena that tax credits for renewables are taking away some investment away from the LIHTC.
“That could be a concern of the past as it is likely the new administration and Congress will do away with many of these incentives and programs from the Inflation Reduction Act and possibly some from the CHIPS Act,” Gasson said.
NLHA’s Muha emphasized the strength of the industry and importance of the work.
“Our industry is comprised of dedicated professionals who work every day to make housing more affordable, I don’t expect that to change,” she said. “We will strive to preserve the affordable housing we have and endeavor to expand the stock.”
