How a Trump Administration Could Affect California’s Housing Crisis

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The Santa Barbara Independent republishes stories from CalMatters.org on state and local issues impacting readers in Santa Barbara County.

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As California Democrats attempt to “Trump-proof” the state and Republicans celebrate their party’s sweeping victory, the mood among some of the state’s most prominent housing advocates is glum.

“Trump’s extremist economic agenda is going to tank the housing market and housing construction,” Sen. Scott Wiener, one of the Legislature’s loudest YIMBY voices, said in an interview Friday.

That concern is based largely on actions taken during President-elect Donald Trump’s first presidency and his stated plans to deport massive numbers of immigrants and raise tariffs. Trump has offered few specific housing policy proposals. When CalMatters reached out to his campaign for more details, it didn’t get a response. 

That’s left housing experts, elected officials and journalists reading the tea leaves of his public statements, moves made by his first administration, and the ideas put forward by his former housing secretary, Ben Carson, in the Heritage Foundation’s Project 2025 blueprint.

[Click to enlarge]: First: Construction site for an affordable housing apartment complex. Last: Construction workers building an apartment complex site for an affordable housing project in Bakersfield on May 29, 2024. | Credit: Larry Valenzuela, CalMatters/CatchLight Local

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If those are any indication, a Trump presidency will likely make it harder for immigrants, including mixed-status households, and other low-income Californians to access subsidized housing. It could also complicate efforts to build housing in the state that’s specifically designated as affordable. 

At the same time, experts said, Trump could help ease regulations for housing construction across the board, something sought by pro-housing officials in both parties. And some said Trump’s mentions of housing on the campaign trail, however vague, signal bipartisan agreement on the need to do something about housing affordability, at least when it comes to single-family homeownership. In other words, the rest of the country is catching up to California, where more than 3 in 4 adults say the cost of housing is “a big problem.”

Many of the most important housing policy decisions take place at the state and local level, placing some constraints on Trump’s influence. Here are a few ways an incoming Trump administration could affect housing in California.

Mass Deportations

As with most other issues affecting the country, Trump and his running mate J.D. Vance have blamed immigrants for the housing crisis, arguing that deporting them will help free up homes for U.S. citizens. He’s also promised to ban mortgages for undocumented immigrants, who make up a tiny portion of the homebuying market, accounting for about 5,000 of the more than 4 million mortgages originated in 2023, the Urban Institute estimates.

Besides the human cost to families in California, a state where nearly half of all children have at least one immigrant parent, mass deportations would mean fewer workers to build new homes, said Ben Metcalf, managing director of the Terner Center for Housing Innovation at UC Berkeley.

“If he’s going to go full bore on deporting everyone who’s not a citizen or green card holder, that is going to gut a construction workforce that is already aging and dwindling,” he said. 

Perspectives on the state’s construction worker shortage vary; Chris Hannan, president of the State Building and Construction Trades Council of California, said that a slowdown in office construction means there are plenty of skilled tradespeople available to build new housing. But California’s construction industry employs more than 200,000 undocumented workers, or about a quarter of the workforce, according to the Migration Policy Institute, meaning their absence would significantly disrupt the industry.

Reducing the population also does not automatically make housing cheaper, at least in some parts of the state. New research from the Public Policy Institute of California finds that in some counties, rents have risen since 2010 even as vacancy rates also rose, with developers focusing on building for higher-income renters and charging more for newer units to recoup construction costs.

Taxing  Imports

Tariffs on construction materials would likely depress housing construction in California and elsewhere as companies are forced to pay the extra taxes on imported products, experts said.

Hannan pointed to the supply chain problems during the COVID-19 pandemic that drove up material prices. “The costs went through the roof,” he said. “There were (residential) projects that were delayed and projects that did not move forward.”

During the first Trump administration, the California Building Industry Association told the Sacramento Bee that tariffs enacted during the president’s first two years in office had driven up the cost of the average new home by $20,000 to $30,000.

Trump this year suggested he might impose 20% tariffs on imports across the board, and 60% on those from China.

Business leaders said Trump’s unpredictability makes it difficult to plan for potential future tariffs. “If Trump did nothing and let the (Federal Reserve) continue lowering interest rates and didn’t enact wild tariffs, things would improve for housing construction,” said Elaina Houser, vice president of policy for the Los Angeles Business Council. But a more interventionist President Trump could lead to more instability in the housing market, she said.

“Somebody says the wrong thing to him from another country and he says ‘I’m going to get back at you with tariffs’ — I can see that happening,” she said.

Easing Regulations

Assemblymember Joe Patterson says he hopes a Trump administration will keep the promise in the Republican Party’s 2024 platform to “cut unnecessary regulations that raise housing costs.” The Rocklin Republican, who serves as vice-chair of the Assembly Housing Committee, pointed to an affordable apartment complex in his district that he said went through a costly and time-consuming environmental review when developers wanted to add four more units per acre to the site footprint.

Trump could use the power of the federal purse to reward states that speed up approval of new developments, he said. 

“The two things that impact the price of housing is the cost of land…and the time and money to get through the approval process,” he said, referring to Trump’s plans to both loosen regulations and build housing on federal land. “I think if Trump can focus on those two things the market can take care of the rest.”

A Trump administration could also work with Congress to loosen HUD rules governing manufacturing of mobile homes, making more of that cheaper, entry-level housing available, said Alex Horowitz, housing policy initiative director for the Pew Charitable Trusts.

Restricting Access to Public Housing and Section 8

If past is prologue, low-income Californians who rely on federal housing assistance will be at risk under a second Trump administration.

During Trump’s first term, his administration floated a ban on federal housing assistance to families with any undocumented members — including those with U.S. citizen children. The rule, never implemented, would have broken with current policy allowing mixed-status families to receive pro-rated assistance based on the number of family members who are eligible.

If the federal government were to enact a similar rule today, “there’s a large number of households in California that would be impacted — mixed status families who would have to make that hard choice of separating as a family or leaving their housing and quite possibly not being able to find an alternative,” said Chione Flegal, executive director of Housing California, an affordable housing advocacy group.

Project 2025, the conservative blueprint for a second Trump administration, also envisions a thorough overhaul of the Department of Housing and Urban Development that would add time limits and increase work requirements for housing benefits, sell off land owned by public housing authorities, and transfer some of the department’s responsibilities to state and local governments.

Reducing the number of Californians eligible for federal housing vouchers could compromise new affordable housing projects because some developers rely on income from voucher-holders to make projects pencil out, Flegal said.

State leaders could choose to make up some of the funding for housing vouchers, she said, or finance affordable housing projects that wouldn’t be bound by the federal rules, though that would be “incredibly expensive.”

Prioritizing Single-Family Zoning

Trump has railed that Democrats want to “abolish the suburbs,” co-authoring a 2020 Wall Street Journal op-ed with Carson that criticized elected officials in several states, including California, for promoting higher-density housing in residential neighborhoods.

“People fight all of their lives to get into the suburbs and have a beautiful home,” he said in a speech that year. “There will be no more low-income housing forced into the suburbs.”

California lawmakers in recent years have taken the opposite tack, making it easier for homeowners to build ADUs in their backyards and split their lots into two. “Creating more flexibility in zoning is essential to getting housing costs under control and addressing the housing shortage,” said Wiener.

It’s unclear, however, whether Trump would have much ability to influence zoning in California, beyond dangling federal grants as incentives. “The federal government has a limited impact on regulating housing requirements in California or any other state,” Morgan Morales, a spokesperson for the California Building Industry Association. 

Help for First-Time Homebuyers

The Republican platform promises ​​to “promote homeownership through tax incentives and support for first-time buyers,” help that could theoretically make a difference for California, where the median home price topped $900,000 this year and the age at which the majority of residents become homeowners is 49.

Unlike Vice President Kamala Harris, who said on the campaign trail that she’d give first-time homebuyers up to $25,000 in downpayment assistance, Trump has not offered any specifics. His spokespeople didn’t respond to requests for details.

The president-elect has said he would lower mortgage rates, something presidents don’t directly control. Mortgage rates rose after the election on the expectation that Trump’s economic policies will fuel inflation. Some of the changes contemplated in Project 2025, such as increasing mortgage insurance premiums and decreasing lengths of loans offered by the Federal Housing Administration, would likely make buying more expensive for first-time homebuyers. 

The fact that both parties highlighted homeownership in their campaigns could provide some opportunity for collaboration on the issue at the federal level, said Adam Briones. He’s the CEO of California Community Builders, which promotes homeownership for middle-income Caifornians and those from historically marginalized communities. Briones said that the federal government lacks a large-scale program to build income-restricted affordable housing for homebuyers, the way it does for rental housing through tax credits.

“We are obviously a very divided nation,” he said. “We’re divided politically, racially, along gender and religious lines. The one thing that still seems to unite Americans is most folks want to buy a home. What can we do to use this general desire for American homeownership to potentially bring people together?”

Building Housing on Federal Land

Trump has said he’ll open some federal land to housing construction, an idea with broad appeal that both candidates pushed on the campaign trail.

He’s suggested he would hold a contest to design and build new “Freedom Cities” on federal territory. “Trump Freedom Cities and Homes will sell like hot cakes and everyone will want to live in one!” effused Bill Pulte, a private equity CEO and real estate heir rumored to be under consideration for Trump’s Housing Secretary, this week on X.

Much of the federal land in California is in rugged terrain inhospitable to development or far from population centers, housing researchers said. But a recent Terner Center report found that the United States Postal Service owns more than 50 sites in California that could be suitable for housing construction due to their location in residential areas close to public transportation and other neighborhood amenities.

“I would think this would be an easy win for Trump if he wants to do something visible,” said Metcalf, the Terner Center director. “He likes to build things, he likes building walls. So maybe he can take some federal land and build some housing.”