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Donald Trump has started his second term. Throughout the week, Inman is exploring the administration’s housing policies, from the privatization of Fannie Mae and Freddie Mac to growing antitrust issues in the real estate industry. Join us tomorrow for part two, outlining the economic outlook.
Donald Trump’s second presidential term begins on Monday.
During his campaign, Trump promised to reduce unnecessary building regulations, open unused federal land for new home construction, offer tax incentives for first-time homebuyers, and address the nation’s inventory crisis by deporting a significant number of undocumented immigrants in the next four years.
Trump’s vision resonated with voters, leading to his victory in both the popular and electoral college votes.
While many details of his housing industry plans remain unclear, the president-elect has emphasized the initiation of mass deportations on the first day of his second term. Economists suggest that these deportations could disrupt housing starts, as undocumented workers make up a considerable portion of the construction workforce in the country.
Additionally, a reduced workforce and increased tariffs on imported goods from specific countries could hamper inventory growth and drive up prices.
Harvard University’s Joint Center for Housing Studies senior analyst Riordan Frost highlighted the potential negative impact of any disruption to the housing supply process on housing affordability in an interview with the Texas Tribune.
The implications of mass deportations
Although specifics of Trump’s plans remain unclear, he has expressed his intentions to use the first 100 days of his term to reverse President Biden’s executive orders, close the U.S./Mexico border, and commence the mass deportation of over 11 million undocumented individuals without legal status or temporary residence.
Vice-President-elect J.D. Vance estimated that the deportation target may reach 1 million people annually, exceeding the deportations carried out during Trump’s first term. The responsibility for coordinating these deportations falls on Veteran Border Patrol agent and former Immigration and Customs Enforcement (ICE) Acting Director Tom Homan, who will serve as Trump’s border czar.
Homan’s focus will be on removing undocumented immigrants deemed national security or public safety risks, potentially resulting in the inclusion of non-targeted individuals in deportation raids.
In a recent CNN interview, Homan emphasized the importance of Congressional funding and military support for the successful execution of Trump’s mass deportation objective. He underlined the necessity for expanding ICE’s budget to enhance detention capacity and address the shortage of ICE agents.
With over 4 million mixed-status households in the U.S., Homan addressed the difficult choice undocumented parents face regarding their children’s living arrangements, emphasizing the enforcement of immigration laws even for children born in the country.
Secretary of Homeland Security nominee Kristi Noem expressed support for Homan’s approach and vowed to expedite Trump’s immigration plans if confirmed.
Civil rights and research organizations have detailed the social and legal ramifications of Trump’s proposed immigration policies, including the ending of programs like Deferred Action for Childhood Arrivals (DACA) and stricter regulations for green card holders, among others.
The impact on construction
Housing experts and economists have raised concerns about Trump’s immigration policies, suggesting that mass deportations may worsen the housing shortage and price escalation challenges.
Trump’s argument for alleviating the housing crisis by targeting undocumented individuals has been countered by economists, who point out that only a small percentage of households include undocumented individuals who are predominantly renters and not affecting the for-sale housing market.
Deporting undocumented workers, who make up a significant portion of the construction workforce, could lead to a standstill in construction projects, exacerbating inventory shortages and affordability issues.
Immigrants, both documented and undocumented, play a crucial role in the construction labor force across various states, contributing significantly to meeting the industry’s workforce demands. Efforts to secure a reliable immigrant labor flow are essential for the construction sector’s growth and development.
Trump’s proposed immigration policies have elicited concerns about a potential chilling effect on the housing market, with real estate agents expressing worries about rising building material costs, reduced foreign investment, and a shortage of skilled labor.
Trump’s tariff proposals on goods from Mexico, Canada, and China could impact consumer prices and raise financial burdens on American households, with businesses likely to pass on tariff costs to consumers.
The uncertainty surrounding Trump’s tariff and immigration policies has created apprehension among industry experts, who remain cautious about the potential impact on the housing and construction sectors.
Email Marian McPherson
