Tuesday, April 29, 2025, marked the 100th day of the second Trump administration. It has been a roller coaster of often revolutionary change in U.S. foreign policy, immigration, economic policy, and social politics. Unfortunately, the President’s FY 2026 budget proposal, released on Friday, May 2, would gut housing programs while tying the hands of state and local officials who are expected to take over responsibility from the federal government. The budget proposal cuts nearly 44% from the Department of Housing and Urban Development (HUD) – gutting critical housing and homelessness programs and eliminating highly successful and bipartisan programs like HOME and Family Self-Sufficiency. Further, the budget proposal calls for the elimination of NeighborWorks® America – a highly effective organization that serves the housing needs of communities throughout the United States, especially in underserved rural areas in red states. These proposed reductions would have a devastating impact on millions of Americans, particularly the most vulnerable among us, and would directly lead to increased homelessness across the country and the bankruptcy of many private businesses that own and operate affordable housing. As I told HousingWire, “the depth of the cuts would create both a massive homelessness crisis and a real estate crisis where owners of apartment buildings that rely on Housing Choice Vouchers would be going bankrupt at a breathtaking pace.”
We are confident that this Congress will do the right thing by rejecting these politically unsupportable cuts and instead prioritize the stability and security that safe, affordable housing provides to families and communities. Housing unaffordability and instability has become an increasingly bipartisan problem with bipartisan support. NHC will continue to work with leaders on both sides of the aisle to ensure that housing remains a bipartisan issue and that proven programs are protected and strengthened—not weakened.
HUD Secretary Scott Turner has been relatively effective managing the Department of Government Efficiency (DOGE) team so far, avoiding draconian cuts like those at the State Department. Nearly a quarter of HUD’s employees have taken the “Fork in the Road” option of deferred resignation and additional cuts may come soon. However, the Secretary and his senior team understand the importance of managing HUD effectively, consistent with the President’s directives, but with a clear commitment to the Department’s core mission – and the law. That does not mean that there won’t be fundamental changes at HUD, or deep cuts in some HUD programs. But if the President’s budget proposal were to be enacted as proposed, HUD would be saddled with a massive housing crisis with political and personal reverberations across the country.
As in all administrations, Democrat or Republican, cabinet Secretaries are required to support the President’s budget proposal. So, it will be up to housing advocates to make our case directly to Members of Congress on behalf of the programs that add real value to their constituents – low and moderate income renters and homebuyers, and the communities where all of us live. Efforts to use AI to improve HUD regulations is a priority of NHC and we look forward to working with the Secretary to improve the efficiency of HUD’s often overly complicated rules. Successful use of AI depends on knowledgeable experts refining dozens of drafts with fact-based context and corrections. An inexperienced and immature DOGE team is doomed to fail, wasting valuable time and resources.
Despite the sometimes dramatic change in regulatory tone and manor at the Federal Housing Finance Agency (FHFA), little has changed in the day to day operations of the housing markets, with rates relatively stable and liquidity of the MBS market unchanged. FHFA Director Bill Pulte has talked about the need to reduce regulatory micromanagement at the companies so they can be “run like a business.” A recent memo from the Freddie Mac’s president and interim CEO Mike Hutchins told employees “Director Pulte has helped us streamline our business and harness the productivity of thousands of Freddie Mac employees now in the office full-time… Furthermore, we believe that regulatory changes making it easier for us to responsibly acquire loans will increase our revenue and enable us to provide even greater liquidity to the single-family and multifamily market.” While Hutchins isn’t the first CEO to say nice things about his regulator or Board Chair, several senior executives at Freddie Mac have privately told me the attitude that he expressed is accurate. Others, especially those who have worked on ESG and DEI priorities, have expressed deep fears, which have been realized for many of them. Ultimately, the new direction will prepare the Enterprises for reprivatization, which will be led by Treasury Secretary Scott Bessent.
In total, it is a more dramatic change than we have seen in any presidency since the first 100 days of the administration of Franklin D. Roosevelt. FDR’s first 100 days remain unchallenged for radical change. It included shutting down the nation’s banks, abandoning the gold standard and devaluing the dollar, establishing federal insurance for banking deposits, nationalizing industrial policy, creating the first public housing in the nation’s history, and creating the first public welfare aid for the poor. Many of these changes are well-established parts of our economy and government today. Yet most of the most radical were ruled unconstitutional by the Supreme Court, like the National Industrial Recovery Act, the Agricultural Adjustment Act, and the Municipal Bankruptcy Act. FDR’s effort to pack the court in response permanently eroded his domestic policy support in Congress. Following the court packing debacle, he never succeeded in passing another major federal program. That should be a lesson to the Trump administration, although political leaders rarely learn from history until they repeat it.
Shortly after the election, I wrote about high value opportunities and risks in a second Trump administration. The number one risk was a trade war; the second was the deportation of residential construction workers. The first of these is raging now, creating the risk of inflation and recession (aka. Stagflation). The second could come at any time. My concern then was the risk of a 10-20% across-the-board tariff on all imports, with an additional 60% tariff on all imports from China. Today, those numbers seem quaint.
According to the National Association of Home Builders (NAHB), immigrants represent one in four construction workers. The share is significantly higher (31%) among construction tradesmen. In some states, reliance on foreign-born labor is particularly evident, with immigrants comprising 40% of the construction workforce in California and Texas. These numbers include plasterers and stucco masons (64%), drywall/ceiling tile installers (52%), painters (48%), roofers (47%), and carpet/floor/tile installers (46%). A third of all carpenters and 41% of construction laborers are of foreign-born origin, according to NAHB.
One well-publicized ICE raid on a construction site would have a devastating impact on the construction industry, as tens of thousands of foreign-born workers would stay home, afraid of exposing themselves, friends, or family members to deportation. Some are already doing just that.
The good news is that two vitally needed and bipartisan bills were introduced in Congress in April. The Affordable Housing Credit Improvement Act (AHCIA) is our highest housing supply priority. Last week, the AHCIA was reintroduced in the Senate with 30 bipartisan original cosponsors, representing 25 states and nearly one-third of the Senate. Led by Senate Finance Committee members Todd Young (R-IN), Maria Cantwell (D-WA), Marsha Blackburn (R-TN), and Ranking Member Ron Wyden (D-OR). The legislation would finance nearly 1.6 million additional affordable homes could be financed across the United States and territories over the next decade. AHCIA would also support over 2.4 million jobs, almost $94 billion in additional tax revenue, and over $271 billion in wages and business income.
The Neighborhood Homes Investment Act (Neighborhood Homes) 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 has 98 cosponsors in the House, including 34 Republicans, and 16 cosponsors in the Senate, half of them Republicans and half Democrats.
Presidential budgets have been declared “dead on arrival” since the 1980’s. In 2017, Senator Lindsey Graham (R-S.C.) declared President Trump’s first budget was dead on arrival, as had the Heritage Foundation in 2011 regarding President Obama’s FY 2012 budget. I’m confident that there are more than a few Republican Senators and House members who will refuse to enact a draconian HUD budget that will drive up homelessness and drive out of business hundreds, if not thousands, of private investors in America’s rental housing. A full year Continuing Resolution would be a huge win for housing, and it should be our ultimate goal. While few Republicans are eager to buck the President in the first 100 days of his second term, many more will see the political writing on the wall once the trade war takes its full toll on the economy beginning this summer. In the meantime, there are opportunities for bipartisan victories available to both parties. We just need to take them.