Grading the Trump/Vance Housing Plan: Winners and Losers

Sponsored by: Madera Residential

We broke down the list of potential winners and losers from the Harris/Walz housing plan in our last newsletter, so now we’ll look at the Trump/Vance campaign’s ideas on housing.

First, let me say this: I’m not trying to tell you who to vote for. Housing is just one of numerous issues that impact voting decisions. I’m staying in my lane.

I’ll share three conclusions I drew studying the Trump/Vance campaign’s statements and past policy pitches, and then I’ll detail how the plan would impact the key stakeholders: homebuyers and homebuilders, and renters and rental housing investors (separating SFR and apartments).

Three High-Level Takeaways

1. It’s tougher to break this one down because the Trump/Vance campaign has provided even fewer details (in terms of official policy positions) than Harris/Walz. There isn’t a formal plan to reference outside of a very brief reference in the Trump-approved 2024 GOP platform (see Chapter 4, Section 1.) That necessitates digging into past statements and actions by Trump and Vance to better understand where they stand, and there’s some meaty stuff (both good and bad) we can draw from that go far beyond the formal plan.

2. You might be surprised to learn there’s significant alignment between Harris and Trump on a few key pro-supply principles. In fact, it may surprise some YIMBYs to realize Trump — dating back to his time in the White House — overlaps with YIMBYs on numerous issues outside of (critically for YIMBYs) upzoning of single-family neighborhoods. Because regardless who wins, these could be areas where we see bipartisan movement in coming years.

   • Both support aiding first-time homebuyers (though in different ways).

   • Both want to take down regulatory hurdles stifling new housing construction.

   • Both want to repurpose some federal lands for new housing.

   • Both campaigns have put single-family rental investors in their crosshairs (though more Vance than Trump on the GOP ticket).

3. Like the Harris/Walz plan, the Trump/Vance housing plan is a combination of serious policy ideas that could move the needle combined populist gimmicks that fire up the voter base but would ultimately prove counterproductive.

   • Both sides want to blame a boogeyman – Trump with “illegal immigrants,” Harris with “corporate landlords,” both purposely choosing terms that their targets find derogatory but that poll well with their voter bases. Such gimmicks fire up voter emotions more than they move the needle toward lasting solutions, and they’re noisy distractions from the root issues, so it’s important to call that out (as some YIMBYs are doing).

   • For the record, academic economists surveyed by the University of Chicago overwhelmingly oppose key tenants from both campaigns’ housing plans as counterproductive: Trump’s tariffs and Harris’ rent caps.

Let’s break down the potential winners and losers. There’s one likely winner (and it’s a group that likely wins no matter the outcome in November), and a lot in the “mixed bag” category.

Potential Winners

First-time homebuyers

• Both Trump and Harris want to boost first-time homebuyers, though they propose different ways of doing it. The Trump/Vance campaign promises to “promote homeownership through tax incentives and support for first-time buyers.”

• The Trump/Vance campaign appears to oppose Harris’ pitch to give first-time homebuyers cash for down payments, as Vance called it inflationary. Details are sparse, but it appears the Republicans prefer to use tax benefits and other levers.

• Additionally, like Harris/Walz, the Trump/Vance ticket talks a lot about regulatory reforms to stimulate more housing development and the repurposing of some federal lands for new housing. Trump recently added the wrinkle that any housing on federal land would be “ultra-low tax” and “ultra-low regulation,” which suggests cities might have to accept certain conditions in order to tap into those properties for housing. All beneficial to first-time homebuyers over the long run.

• One campaign talking point that isn’t a real factor: Trump wants the White House to have more direct control over fiscal policy and interest rates / mortgage rates, but that almost certainly won’t happen (plus economists think it’s a bad idea).

It’s important to acknowledge that while the two campaigns mostly agree on supply-side issues, they differ significantly on the demand side and there’s real risk here in triggering the law of unintended consequences. Trump and Vance both routinely blame illegal immigration for driving up home prices and limiting availability for first-time homebuyers.

• “We also cannot ignore the impact that the flood of 21 million illegal aliens has had on driving up housing costs,” Trump said in a speech last week, and proposed banning undocumented immigrants from receiving mortgages.

• But such mortgages are a tiny piece of the pie, estimated at between 5,000 to 6,000 in total last year in a study by the Urban Institute, according to the WSJ. Most new immigrants are more likely to move in with family/friends or in a shadow market (i.e. unregistered) rental property.

• Certainly everyone needs a place to live, so immigration does impact overall housing demand in the long run when supply doesn’t keep pace. There’s some academic research showing a correlation between immigration and home prices/rents. But on the flip side, immigrants comprise 25% of all construction workers – and much higher for certain trades, according to the National Association of Homebuilders. Without that labor force, construction costs would likely be higher – which would then mean higher prices/rents for new builds.

In other words: It’s not as simple as the campaign implies. It’s a nuanced issue.

• Bottom line: Even if a second Trump administration were able to pass a ban on mortgages for undocumented immigrants, it’s unlikely that would materially impact the market for first-time homebuyers. But the more substantive policy efforts to boost supply and aid first-time homebuyers would be enough to create a real win for first-time homebuyers, and (no matter who wins in November) it appears there’s bipartisan support for something along those lines.

• IF we somehow did see mass deportations as the campaign has pitched, that would remove first-time homebuyers from the “potential winners” list — as it would likely drive up the cost of new housing and limit the volume that could be built.

Mixed Bag

Homebuilders

• While the Trump/Vance campaign has shared few details, the candidates have spoken about spurring homebuilding by lowering corporate taxes, reducing federal regulatory costs and (like Harris/Walz) opening up some federally owned land for housing development – potentially with mandates to minimize entitlement processes and taxes, based on Trump’s comments.

• Those are positives, but they’re counteracted by plans to increase tariffs (which drive up costs of building materials) and push deportations (which would drive up labor costs). The former appears more likely than the latter, and there’s general agreement among economists that this would drive up prices.

Apartment Developers & Investors (including Affordable)

• Outsiders might be surprised to learn this is very much a mixed bag for apartment investors, while insiders/developers will already know it.

• On the plus side, Trump/Vance talk about reducing regulatory burdens impeding new housing development of all types – a theme increasingly embraced by both sides of the aisle at the federal level, yet often blocked by both sides of the aisle at the local level.

• It’s also a plus to repurpose some federal lands for housing (as noted above), especially if coupled with requirements that to use the land, cities must reduce red tape and taxes for any housing built there.

• We could draw other clues from prior initiatives. As president, Trump signed Opportunity Zone legislation into law – incentivizing a sizable spike of apartment development into targeted neighborhoods.

• And in 2019, Trump established the “White House Council on Eliminating Regulatory Barriers to Affordable Housing because for many American citizens, the supply of available housing has not kept pace with the demand for housing by prospective renters and homebuyers.”

  • Trump’s plan in 2019 featured a number of YIMBY targets to increase housing development – including restrictive zoning, rent controls, “cumbersome” building codes, environmental rules, parking requirements, impact fees and tax policies.

  • The plan didn’t get very far during Trump’s time in the White House (in part because of proposed cuts to HUD and other initiatives that pushed away potential cross-aisle allies and also because of the difficulty of getting cities to play ball), but we could assume a second Trump administration might pursue similar goals.

• In that vein, reflecting on his years as a real estate developer, Trump recently told Bloomberg: “I went through years of zoning. Zoning is like... it’s a killer.”

• But … on the negative side, Trump has spoken out against increasing housing density (which would allow more apartments) in established neighborhoods and has specifically promised to block low-income affordable housing near single-family homes. At one rally, he was quoted saying: “There will be no low-income developments built in areas right next to your house.”

• Reading between the lines: It appears Trump supports zoning and regulatory reform favoring multifamily, but not in single-family neighborhoods. That’s still impactful because developers face roadblocks even in non-residential neighborhoods, BUT its impact is limited because most incorporated property is zoned single-family.

• Realistically, though, the White House likely has little impact on local decisions like that – so the most probable outcome is maintenance of the status quo (which, in itself, is less than ideal given shortage of affordable housing). While both Trump and Harris attack local hurdles to new housing, neither has proposed specific plans to incentivize and/or require cities to allow more housing development.

• Additionally, the campaign’s proposed tariffs would likely further drive up costs for building materials. And deportations would likely drain a significant number of construction workers – pushing up costs, too.

Apartment Renters

• As noted above, it’s a positive that Trump/Vance – like Harris/Walz – have pledged to attack regulatory roadblocks to new housing development. The opening up of federal lands with lower taxes and regulatory costs is a win. Reduced regulatory burdens to supply is a win for renters.

• On the flip side, both Trump and Vance have in the past supported reductions to HUD’s budget – which drew criticisms from industry groups and tenant groups alike concerned about the potential impact to various aid programs for low-income renters.

• Furthermore, Trump’s opposition to upzoning of single-family neighborhoods limits the impact of his proposed regulatory reform, particularly (but not exclusively) for those renters who want smaller multifamily, duplexes, fourplexes, ADUs, etc.

• Additionally, as noted above, Trump’s proposals for mass deportations and higher tariffs would likely backfire in the long run by driving up construction costs and, in turn, rents – offsetting any short-term rent reduction associated with reduced demand; and furthermore, such a shock would likely trigger sharply reduced construction.

• Regardless who wins in November, the next president will inherit a lower-supply environment (coming off a 50-year peak in supply) where vacancies gradually shrink and rents begin to grow again – though likely at more moderate levels than we saw in 2021-22.

Affordable Housing Renters & Investors/Developers

• One thing to point out: Unlike Harris/Walz, the Trump/Vance proposal does not specifically address to boost low-income affordable housing programs like LIHTC, which is a critical need that would benefit renters and developers alike. Affordable housing projects do not pencil out without subsidy programs (and GOP voters: Remember it was Reagan who signed the Low Income Housing Tax Credit program into law, as it’s designed to be an incentive — not a mandate — to make affordable housing viable.) LIHTC wasn’t a partisan issue when it was created in the 1980s and it isn’t one today.

• In fairness, I should point out (as noted above) that then-President Trump did sign the Opportunity Zone legislation into law, which has in many spots helped spur workforce/attainable housing — and perhaps that could be expanded.

• So while Affordable Housing would benefit from the broader regulatory reform efforts, it’s a miss not to target LIHTC expansion.

Build-to-Rent Developers/Investors

• Little here that would specifically impact this group outside of promises to make all types of housing development easier or more viable, but some of the themes mentioned in the apartment developer and homebuilder categories above would play out here, too.

• It’d be a win to see both campaigns (and policymakers everywhere) actively embrace more BTR as one piece of the solution in solving the housing crisis.

Repeat Homebuyers

• Like the Harris/Walz campaign, the Trump/Vance campaign appears to be prioritizing new benefits specifically for first-time homebuyers. But the wording of policy documents (which are very brief) leaves open the possibility of new tax advantages for all homeowners.

• Also: Because the Republicans appear to oppose down-payment assistance for first-time buyers or specific incentives for SFR investors to sell to first-time homebuyers, there would (theoretically) be less chance of repeat homebuyers having difficulty competing against first-time buyers for homes.

Potential Losers

Single-family rental (SFR) investors with 50+ homes

• Trump hasn’t said much about single-family rentals, but his running mate has said plenty, so we’ll focus on him. If you’ve followed him over the years, you know Senator Vance has been one of the Republican Party’s loudest critics of single-family rental investors.

• Last year, Vance said large investors “have access to cheaper money, and they completely crowd out the availability for homes for people who want to just buy a piece of their community.”

• Back in 2021, Vance said: "When these hedge funds take special government privileges and go and buy up all the single-family homes, what they're doing is destroying wealth in this country.”

• He also said: “I really worry about this dynamic you have where you have massive, largely out of state, many out of the country financial interests coming up and buying all the homes in the state of Ohio.”

• Unlike Harris, Vance has not signaled support for the proposed “Stop Predatory Investing Act,” which specifically targets investors with 50+ single-family homes with tax penalties on new acquisitions while also incentivizing them to exit the market by selling to first-time homebuyers. But Vance did say the proposal was “pointing in the right direction,” but wanted it to go further by limiting sales to foreign buyers.

• Even on stage at the Republican National Convention this summer, Vance made a point to say (while not specifically referencing SFR): “President Trump’s vision is simple: We won’t cater to Wall Street, we’ll commit to the working man.”

• The problem with all this is that it’s not grounded in reality. As I’ve written about before, the government’s own data contradicts these narratives we hear from both parties.

  • Homeownership has trended upward since 2015.

  • The number of homeowners has grown far faster than the number of for-sale homes built.

  • Single-family rental supply has held flat or declined due to individual homebuyers outmuscling bargain-shopping investors.

• One footnote: Under the Harris/Walz plan, I graded smaller SFR investors (exempted from tax penalties) as a likely winner due to reduced SFR supply putting upward pressure on rents. But under Trump/Vance, smaller SFR investors are unlikely to see the same benefit in the short term due to the demand reduction associated with proposed deportations, and some might be forced to divest as well if no longer profitable. (More on that below.)

Single-family renters – including families unable/unwilling to buy houses

• If Vance has his way (which isn’t a given), we could potentially see increased bipartisan efforts to penalize single-family investors, incentivizing divestment to individual homebuyers.

• This amounts to a robbing Peter to pay Paul scenario, where reduced SFR supply puts upward pressure on rents for those households unable or uninterested in buying. This only exacerbates inequality because homebuyers are wealthier than renters.

• Additionally, the Trump deportation plan – while putting downward pressure on rents in the short term due to reduced demand – would likely backfire in the long run. A systematic shock of that scale would likely push even more investors (including mom and pops who dominate the market) to exit the market, resulting in reduced supply and longer-term upward pressure on rents. SFR investors have no incentive to sit on vacant units or lease them out at unprofitable rates given costs for mortgages, property taxes, insurance, maintenance, etc.

• Bottom line (just as I ended with in my commentary on the Harris/Walz plan): If you’re a single-family renter who isn’t able or willing to buy a house, you’re likely to be The Law of Unintended Consequence’s next victim.

Disclaimer: The contents of this newsletter are for informational purposes, not investment advice. No recommendation or advice is being given.

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