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How Another Trump Presidency Could Impact Housing in California

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Housing construction in Rancho Mission Viejo in unincorporated Orange County on Sept. 25, 2024.  (Paul Bersebach/MediaNews Group/Orange County Register via Getty Images)

As President-elect Donald Trump prepares to reenter the White House, California housing advocates are bracing for how a second term could impact the state’s notoriously high home prices, rents and rates of homelessness.

On the campaign trail, Trump promised to fix the country’s growing housing affordability crisis by slashing mortgage rates, reducing regulations and opening federal land for housing construction.

That’s a stark contrast to his first term when housing policy was largely absent from either major candidate’s presidential platforms. This time around, that’s changed, and Trump has recognized housing affordability is a problem, said Matthew Schwartz, executive director of the policy organization the California Housing Partnership.

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“And the Trump administration has four years to fulfill a promise to make housing more affordable,” he said.

However, just how that happens is a point of concern among many California lawmakers, prompting Gov. Gavin Newsom earlier last week to call for a special session of the Legislature to strategize ways to counteract the more harmful aspects of Trump’s proposals.

“How are we going to strengthen — from a legal perspective, as well as a policy perspective — the policies that are in place in California,” state Sen. Aisha Wahab (D-Fremont) said.

At the same time, policymakers in California are wrestling with Democrats’ losses this election — not just nationally but also inside California. Two statewide ballot measures that would have directly helped residents better afford housing — by raising money for new affordable housing and allowing local governments to strengthen tenant protections — both failed. A third measure, which would raise the minimum wage, also appeared headed toward defeat.

“For us not to have approved propositions that could have supported the people that we say we care about — I think we’re in an identity crisis,” said Nikki Beasley, executive director of Richmond Neighborhood Housing Services. “We say one thing, but we’re actually doing something completely different.”

Here’s how other California housing advocates are thinking about housing supply, federal funding for affordable housing and homelessness under a second Trump term.

Housing supply

State officials have tasked cities with planning for about 2.5 million new homes in their respective jurisdictions by 2030. But, the number of new homes and apartments that can actually get built is determined by a number of factors; two of the most important are the cost of construction and the amount of red tape developers have to cut through before they can actually build.

Matthew Lewis, a spokesperson for California YIMBY, said the federal government’s role in local policymaking is limited.

“It’s mostly about some tax policies and funding mechanisms, but not much else,” he said. “What this really points back to is that the role of the state Legislature is even more important now.”

While lawmakers in California have made significant strides in passing bills to encourage more housing development, many cities have upheld policies or enacted new ones to slow growth.

Attorney General Rob Bonta and the state’s housing department have launched several lawsuits against cities in recent years — including Elk Grove, Huntington Beach, Portola, and most recently, the city of Norwalk — for violating state housing laws and preventing new housing from being built.

“The most likely outcome [of the Trump presidency] is slightly worse than the status quo,” Lewis said. “But even that won’t change if the cities won’t reduce their barriers to build more housing.”

When it comes to the cost of constructing housing, however, Trump’s promises to crack down on illegal immigration, if realized, could grind “the construction industry to a halt,” said Russell Lowery, executive director for the California Rental Housing Association. An estimated 23% of the construction industry nationally (PDF) is made up of undocumented immigrant workers, according to the Center for American Progress.

“That would have a negative impact on supply no matter what,” he said. “If you don’t have people who can build the product, you’re not going to increase supply.”

Tariffs could also make the cost of construction materials more expensive, Lowery said. Trump promised to impose blanket tariffs of 10% to 20% on all imports, which could raise the cost of imported construction supplies.

According to a 2018 report from the Cato Institute, a libertarian think tank, the cost of construction materials increased dramatically after Trump instituted tariffs and trade restrictions during his first term in the White House.

Ultimately, it is still unknown how Trump’s policies will shape the housing supply. Lowery said it could take years, perhaps after Trump has left office, to determine the effect his administration had on the market.

“The changes that happen at the federal level take time to change the behavior and really impact the rental market in individual states, certainly in a state as large as California,” he said. “It took years to get us into this crisis, and it’s going to take — no matter who is in charge — years to get out of it.”

Federal funding for affordable housing

The extent to which a second Trump administration can force its agenda on California remains to be seen, but affordable housing and homelessness policy experts say federal funding could be used as both a carrot and a stick to influence state action.

Several experts listed cuts to the Department of Housing and Urban Development’s (HUD) budget as top concerns. During Trump’s first term, White House officials proposed slashing federal funding for affordable housing, though Congress rebuffed some of those requests. With Republicans likely to take control of Congress this year, that guardrail is less secure, said Christopher Martin, policy director at Housing California.

“He could probably move these things now under a new Congress that is just as radically motivated as he is,” Martin said.

Sharon Rapport, California state policy director for the Corporation for Supportive Housing, is most worried about efforts to defund rental subsidy programs for lower-income people, known as Housing Choice Vouchers or Section 8.

“Cuts to those programs lead directly to more people falling into homelessness,” she said, citing evidence that the rise of mass homelessness in the ’80s corresponded with major cuts to HUD programs.

Martin said that’s one area where the state could step in to help mitigate the impacts of potentially reduced federal funding. Rapport agreed.

“Otherwise, we will see significant increases in homelessness for sure,” she said, though she acknowledged the state’s budget deficit presents a challenge.

Trump has previously endorsed calls for the eviction of all noncitizens, including those in mixed-status families, from federally subsidized housing, a policy proposal that also appears in Project 2025 — a 900-page policy playbook from the conservative Heritage Foundation think tank.

The policy document advocates for doing away with federal commitments to the Housing First approach to homelessness, which prioritizes permanent housing and supportive services. Trump has disavowed the agenda despite the fact that many of its authors served in his first administration.

“That’s the driver of what does work in California,” said Alex Visotzky, senior California policy fellow at the National Alliance to End Homelessness. “It’s partially because of California’s commitment to Housing First that the state-funded [Homeless Housing, Assistance and Prevention Program] has made 40,000 permanent housing placements since the beginning of 2023.”

Homelessness

A Republican-led backlash against Housing First in recent years, championed most fervently by the Cicero Institute, has helped bring about the rise of punitive approaches to dealing with homelessness.

Trump’s first-term rhetoric and promises for a continuation of those policies point to an extreme agenda, advocates for people experiencing homelessness said, but one which they say mirrors an anti-homeless approach some state and local leaders in California have already embraced.

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“We already see it manifesting in cities across California, and the new administration is just going to supercharge it,” said Eric Tars, senior policy director for the National Homelessness Law Center. “We see the next four years as posing a real threat to the rights of homeless people, and that will likely cause a severe growth of homelessness.”

During his first term, Trump repeatedly disparaged California over its homelessness crisis, calling it “a disgrace to the nation,” and pushed for a crackdown on homeless encampments in the state. He floated taking unilateral action on homelessness in San Francisco and Los Angeles, and aides reportedly discussed moving people living on the streets into government facilities.

He’s built on that foundation with promises to relocate houseless people to “tent cities,” with doctors and social workers on site and institutionalize those with severe mental illness.

Trump has also vowed to divert money spent aiding Ukraine and on “shelter and transport of illegal aliens” to addressing homelessness. He’s said he would “ban urban camping wherever possible” and have violators arrested unless they accept drug treatment or services.

The Supreme Court removed a significant hurdle to implementing that vision earlier this summer when it gave cities the green light to enforce camping bans regardless of whether or not they have shelter beds available.

Since then, jurisdictions across California have passed new anti-camping ordinances, and Newsom has pressured local officials to seize the opportunity to clear encampments.

Eve Garrow, senior policy analyst and advocate at the ACLU of Southern California, wants to see the state push back against a Trump 2.0 agenda, which she calls an “existential threat” to people living on the streets, with a “strong and unequivocal commitment for equal rights.”

She sees little appetite for that now among elected leaders who’ve taken an increasingly aggressive approach to the crisis but hopes the political calculus could change.

“It could represent a turning point for policy in California if the Newsom administration and local governments are viewed as following in lockstep with a Trump administration,” she said. “It could be a wake-up call and an opportunity to pivot away from Trump-like policies and move in a direction that is effective and caring and nonviolent.”

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