How Might Tariffs and Deportations Affect Affordable Housing Development?

Housing industry experts warn that President Trump's Day One executive orders and promised policies could severely impact affordable housing development through a combination of immigration enforcement and trade policies. According to a new Shelterforce investigation by Shelby R. King, the affordable housing sector faces unique vulnerabilities to these changes.

Key takeaways:

1. Proposed 25 percent tariffs on Canadian and Mexican imports, plus 60 percent on Chinese goods, could significantly increase construction costs. The National Association of Home Builders estimates a 10 percent tariff would add $3.2 billion to building material costs.

2. Mass deportations could exacerbate the existing construction labor shortage, particularly impacting affordable housing developers who often can't compete with luxury developers for scarce workers.

3. While the administration promises deregulation will lower costs, experts question whether regulatory cuts could offset rising material and labor expenses. Most impactful regulations are local, not federal.

4. Affordable housing developers face tighter margins than market-rate developers and can't simply raise rents to absorb higher costs. Housing Partnership Network warns of potential "widespread bankruptcies" if costs continue rising without additional resources.

The article features insights from industry leaders including the National Housing Conference, Housing Partnership Network, National Association of Home Builders, and housing policy experts who explain why affordable housing development could be particularly vulnerable to these combined pressures.