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See how Trump’s tariffs, deportations and other proposals could affect housing costs

Americans devote a huge part of their paycheck to keeping a roof over their heads. Policymakers are looking for clues about what President-elect Donald Trump plans to do to lower housing costs next year, after an election in which voters were focused on the economy.

Apartment counted 32.9% consumer spending in 2023, accounting for the largest share of consumer spending, according to the most recently available data from the Bureau of Labor Statistics. This represents an boost of 4.7% compared to 2022.

This year, many Americans continue to struggle 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 is unclear which campaign promises will translate into administrative legislation or legislation, even in the event of a Republican trifecta – the GOP controls the White House and both houses of Congress.

But policy experts, researchers and economic analysts are looking at Trump’s record, his recent comments on housing and Project 2025 – the conservative Heritage Foundation’s 900-page plan to overhaul the executive branch – to get a glimpse of what may lie ahead.

Tariffs and costs of building houses

Trump has often talked about his proposed 60% tariff on goods from China, which he believes would create more U.S. manufacturing jobs. Tariffs can reach up to

20% on goods from other countries.

But housing economists and other experts say this could be bad news for the construction of more affordable housing.

Selma Hepp, chief economist at CoreLogic, a financial services company, said tariffs are one of her main concerns about the impact of a second Trump term.

“One of the biggest problems is not only wood [costs]but the overall cost of materials, which is increasing,” Hepp said.

Prices of construction materials have increased by 38.8% since February 2020, According to 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-Madison, said construction costs are already high due to tariffs on Canadian timber that Trump first imposed and which the Biden administration has maintained and increased.

“It used to be that in the construction industry, an offer from a contractor, subcontractor or supplier was valid for 60 days. Now the offers are valid for about five days because we don’t know where prices will go,” he said.

Immigration policy and its impact on work in construction

Trump he tweeted on November 18 that he planned to apply the emergency declaration as part of his mass deportation plan.

In addition to disrupting lives, Trump’s plan could have an impact on housing construction costs, Hepp said.

“If we are indeed dealing with all these deportations, they also involve labor costs. This is a very, very serious problem,” she said. “A large part of the labor force in the construction industry obviously comes from immigrants. This is a huge problem in new construction, and especially new construction when it comes to affordable housing.”

Foreign-born construction workers created 3 million of 11.9 million people working in the construction industry in 2023, according to the latest American Community Survey data.

Trump’s “not in my backyard” rhetoric.

The former president wasn’t always clear about his position on zoning regulations and paving the way for more affordable housing in diverse neighborhoods.

In a July interview with Bloomberg, Trump was critical of zoning regulations and said they raise housing costs. But Trump also has a history of taking a “not in my backyard,” or NIMBY, approach to housing, which has included some of these zoning regulations. The Trump administration has moved to roll back an Obama-era regulation that tied HUD funding to assessing and reducing housing discrimination in neighborhoods.

“He’ll talk about easing regulations on developers, but he’ll also tap into NIMBYism by talking about protecting suburbs from low-income housing, and you really can’t have both,” said Sarah Saadian, senior vice president of public policy and field organizing for National Low Income Housing Coalition.

Paulsen said Project 2025 is a pushback against anti-NIMBY approaches aimed at expanding multifamily housing.

“What I read in the Project 2025 documents is a clear statement that each local community and district should have the opportunity to choose the apartment it wants to accept or not. “The challenge is that if every community in every neighborhood can veto housing, 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 reached the highest level recorded since the U.S. Department of Housing and Urban Development began collecting this information in 2007. The boost was fueled by the end of pandemic safety nets that gave some households greater financial stability, and the lack of supply of affordable housing. people without shelter – explained in the report.

Trump has been outspoken about his view that homeless people should be “off our streets.” The president-elect also proposed placing unhomed people with mental health problems in “mental institutions.”

“There is a movement that I think is largely reflected in Project 2025, which is that cities actually need more coercive policy tools to enforce public order and require that the person camping find shelter, even if they don’t want to,” Paulsen he said.

Saadian said that given the U.S. Supreme Court’s 2010 ruling Grants Pass v. Johnsonmaking it easier to criminalize unhoused people for sleeping outdoors, he fears a changing political environment in which policies that favor stable housing over policing are falling out of favor.

“I think this all just shows a cultural shift in political dynamics that we’re definitely concerned about,” she said.

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