One week from now, Donald J. Trump will be sworn in as the 47th President of the United States. He will be only the second president to serve two non-consecutive terms. The first was Grover Cleveland, who won with a significant majority of the electoral college and a plurality of the popular vote to become the 24th president after serving as the 22nd. His second presidency did not go well for him. President Trump has an opportunity to have a very different second term.
He inherits an economy that is technically strong, yet one with which most Americans are very dissatisfied due to the lingering effects of record inflation. Rising housing costs due to underproduction has been a major driver of inflation, squeezing family budgets as prices on basic necessities like groceries and gasoline rose. Two of President Trump’s highest priorities will be immigration and trade. Both risk increasing inflation, at least temporarily. If that is true, the Republicans risk a similar fate in Congress that Cleveland’s Democrats suffered in 1894 when they lost 125 seats in the House, going from a majority of 61% to a minority of 26%.
President Trump can avoid a repeat of the 1894 midterm elections if he keeps the economy front and center and improves housing affordability by addressing the historic shortage of affordable housing. Despite narrow majorities in the House and Senate, he has enormous influence over the unity of his party and the levers of the executive branch. He can use the power to score major wins for housing, the Republicans in Congress, and his second term legacy. As I wrote in November, there are four key opportunities that can address the housing crisis and make a tangible positive difference in the lives of most Americans.
1) Affordable Housing Credit Improvement Act (AHCIA)
AHCIA is our highest housing supply priority, creating up to 1.94 million additional affordable homes over the next decade. Passing the AHCIA would also support nearly 3 million jobs, $115 billion in additional tax revenue, and $333 billion in wages and business income, according to Senator Todd Young (R-Ind.). Last year, the bill had 33 cosponsors in the Senate, including 17 Republicans, 16 Democrats, and one Independent. 272 members of the House have cosponsored the bill, 120 of them Republicans. In the scrum of lobbying to shape the new Trump tax bill, which will likely be decided during the first half of 2025, this is the top housing opportunity for NHC and our diverse members. AHCIA will be included in the 2025 tax bill, if President Trump tells Congress it should. He should make that clear, get the bill passed, and take the win.
2) Neighborhood Homes Investment Act (Neighborhood Homes)
The Neighborhood Homes Investment Act would revitalize distressed urban, suburban, and rural neighborhoods with federal income tax credits, mobilizing private investment to build and rehabilitate homes for lower- and middle-income homeowners. It would support the construction or rehab of 500,000 homes over 10 years. Neighborhood Homes would create a federal tax credit that covers the gap between the cost of building or renovating homes and the price at which they can be sold, making renovation and new home construction possible. The bill had 98 cosponsors in the House, including 34 Republicans, and 16 cosponsors in the Senate, half of them Republicans and half Democrats. Like AHCIA, Neighborhood Homes will be in the 2025 tax bill, if President Trump tells Republicans it should be. States that stand to benefit most include Ohio, Florida, Michigan, Wisconsin, Pennsylvania, and rural areas throughout the South.
3) Federal regulatory reform
To learn more about the likely Trump administration agenda for regulatory reform, you don’t have to go much further than the January 2021 paper released by HUD’s Office of Policy, Development and Research, entitled “Eliminating Regulatory Barriers to Affordable Housing: Federal, State, Local, and Tribal Opportunities.” While much has been made of Project 2025, this is the real thing. The paper includes recommendations on improvements in the environmental review process and manufactured housing regulation. The report includes recommendations for a host of other federal agencies, as well as recommendations for state, local and tribal governments. HUD should also conduct a major review of homeless programs, consulting widely with homeless providers throughout the country. Homelessness reached record levels during the Biden administration. It’s time to recognize that our current approach isn’t working, and take a fresh look and explore new approaches.
4) Opportunity Zones 2.0
The nomination of former executive director of the White House Opportunity and Revitalization Council Scott Turner to lead the Department of Housing and Urban Development significantly increases the likelihood that there will be a reboot of the Opportunity Zone program. Early evidence from independent research indicates Opportunity Zone investment has led to meaningful increases in housing, jobs, and businesses, according to recent testimony before the Senate Finance Committee by Michael Novogradac, a member of the NHC Board of Governors and founder of the Novogradac accounting and consulting firm. Through June 30, 2024, 1,897 Qualified Opportunity Funds (QOFs) tracked by Novogradac have raised $38.30 billion. Novogradac identified 185,436 homes that have been built by funding from QOFs. Nashville, Washington, Phoenix, Austin, Cleveland, Los Angeles and Charlotte have all seen more than 5,000 homes built with QOF funding.
We look forward to working with the White House, Department of Housing and Urban Development Secretary Designate Scott Turner, Senate Banking Committee Chairman Tim Scott (R-S.C.) and House Financial Services Chairman French Hill (R-Ark.) to address the affordable housing crisis.
Failure to address the housing crisis has a track record and it isn’t good. But when housing wins, we all win. It’s time for housing in America to get some wins and President Trump can make that happen.