There are a few things to consider when discussing this. First is that the Republican/Trump victory was far more decisive than many people predicted. As a result, he and his cabinet may be more aggressive with policies than they committed to during their campaign. Second, the market is completely different than it was during his last term so we can’t assume he’ll just “do what he did last time”.
One thing we can say with confidence given his background and history is that he will prioritize incentivizing development and developers. Your opinion on whether that is a good thing or bad thing will lie in the details of everything that is deprioritized to prioritize development.
Many people are now focusing Project 2025, a series of proposals from Republican think tank, The Heritage Foundation. During the election, Trump clearly distanced himself from the document and it’s unlikely he will incorporate all its ideas. However, it is helpful to see how his cabinet members and people he surrounds himself with will be thinking since former Trump officials wrote 25 of the 30 chapters. The proposals cover a series of topics focusing on how to reshape federal agencies, but specific to housing are their proposals on the US Department of Housing and Urban Development.
Some of the recommendation in Project 2025 specific to house are:
- Lower affordability requirements on housing
- Increase mortgage premiums on loans longer than 20 years
- Prohibit non-citizens from receiving federal money on behalf of their eligible children
- Allow existing public housing to be sold to private developers
- Replace career federal officials with political appointees
OK, SO WHAT’S THE TAKEAWAY
Trump isn’t in office yet and it’s going to take lots of political effort and years of time to make substantial change, but I would expect Trump to try and shake up how the Federal government is structured which will have impacts to housing.
If Project 2025 is any metric for the future, Trump’s new policies may make it harder for people with lower incomes to afford housing. As a result I would expect that to be one force that would result in rising rental prices, especially in class C properties. Time will tell.
Thanks for reading,
Steve Parry