5 Things a Donald Trump Administration Could Do To Boost the Housing Market
Written by
Laura Beck
Edited by
Gary Dudak
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The upcoming U.S. presidential election will be here before you know it, and it could shake up the housing market. Homeowners, buyers and investors are wondering how it might affect home prices. If Donald Trump wins, his background in real estate could lead him to make big changes in housing policies.
It remains to be seen exactly what kind of housing agenda Trump might pursue in his potential second term. But with the right policies, he could help more Americans afford homes.. As the election gets closer, people in real estate will be watching closely to see what might happen to the market if Trump wins.
Supply-Side Incentives and Demand-Side Regulation
Thomas J. Brock, expert contributor at Annuity.org, would like to see Trump make moves to address both the supply and demand sides of the housing market.
“Homeownership has become unaffordable for the average American,” said Brock. “If Trump wins the presidency and Republicans take control of Congress, I would like to see the implementation of thoughtful measures to rectify this problem. Essentially, we need supply-side incentives to increase new home construction, and we need demand-side regulation to limit the extent to which investment companies, private equity firms and hedge funds can buy up residential real estate and force the middle- and lower-class into ‘rent forever’ lifestyles.”
This strategy would try to increase the amount of new homes being built, while at the same time limiting investment firms from dominating the residential real estate market.
Increasing the housing supply could help alleviate the shortage of homes available to buy, and potentially lower home prices. This might include tax credits for developers, or streamlined permitting processes for new developments.
On the demand side, the administration could create regulations to limit the number of single-family homes that can be purchased by a single entity, or raise taxes on properties that are not owner-occupied, for example. The goal would be to make the American dream of homeownership achievable for families of all income levels.
Cut Property Taxes
In many parts of the country, property tax bills have been steadily climbing, putting the squeeze on homeowners and making it more difficult for first-time buyers to break into the market. This can be one of the biggest limits on affordable homes.
“Reducing property taxes could make owning a home more affordable for many families,” said Yancy Forsythe, founder of Missouri Valley Homes.
The Trump administration could work with Congress to pass legislation that reduces the federal tax burden on homeowners. This could include, for example, increasing the standard deduction, or implementing new caps on the amount of state and local taxes that can be deducted.
Deregulate Building Codes
In many cities and towns, local governments have implemented rules that dramatically drive up the cost of new home construction. These restrictive building codes contribute to putting homeownership out of reach for many families.
“Simplifying building regulations might speed up construction and reduce costs for developers,” said Forsythe.
The Trump administration might push for federal legislation that would preempt certain state and local regulations. One strategy would be to set a national standard for building codes.
Revitalize Urban Areas
The focus on housing policy tends to be on the suburbs, but the Trump administration could also look to improve the housing market in urban areas. Many city centers have struggled with a lack of affordable housing options.
“Investing in urban renewal projects can make cities more attractive places to live and work,” said Forsythe.
Trump’s administration could work to revitalize these areas through targeted investments in infrastructure and affordable housing initiatives. This could include things like down payment assistance to buyers in these high-density areas.
Incentivize Rural Development
Trump could also choose to focus on rural communities. Many small towns and rural regions have struggled with population loss and economic decline, which has hindered housing demand and investment.
“Encouraging development in rural areas can help spread economic opportunities and reduce congestion in urban centers,” said Forsythe.
The administration might explore ways to provide tax credits, financing assistance or other incentives for building and buying homes in these areas. This could make it more attractive for both homebuilders and buyers to invest in rural housing markets.
Editor’s note on election coverage: GOBankingRates is nonpartisan and strives to cover all aspects of the economy objectively and present balanced reports on politically focused finance stories. You can find more coverage of this topic here: 4 Things a Kamala Harris Administration Could Do To Boost the Housing Market.
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