Under Trump, cities will have to solve their housing crises themselves

The failure to build more housing and drive down costs has been a pernicious issue across the country—and in cities in particular. Driven by a shortage of at least 4 million homes, rising rental costs, homebuying challenges, and homelessness have become endemic.

U.S. homelessness reached a peak in 2024: 653,000 people, or approximately the entire population of Boston. Rent has risen nearly 20% since 2019, and the cost of a new home has risen nearly 50% since 2020.

“There’s growing or boiling over of frustrations with the failures of policymakers and elected officials on housing in California and liberal cities,” says Shane Phillips, a UCLA professor and housing policy expert.

But the tide may be slowly turning. At the local level, the results of November’s election show that cities are continuing to embrace solutions; bright spots include increased spending on housing and even policy experimentation. But with the incoming Trump administration unlikely to offer much help, cities will need to do much more work in 2025 to truly begin tackling the issue.

Bright Spots—but a Lack of Bold Moves

In November, more than $1 billion worth of tax measures and bonds to build more affordable housing passed around the country, and pro-housing politicians continued to be elected. Charlotte, North Carolina, approved a measure to borrow $100 million to build affordable housing, and New Orleans voters set up a housing trust fund. Over the past decade, Los Angeles voters have passed bonds to build more housing and support homelessness services, including Measure HHH in 2016, which devoted $1.2 billion to housing programs. These same voters just approved Measure A in November, a Los Angeles County ordinance that will devote up to $1 billion per year in sales tax revenue to support housing and rent relief programs.

There’s also a rising number of politicians who align themselves with the YIMBY movement—which stands for “Yes in My Backyard”—as well as the new formation of local YIMBY groups. That momentum helped the New York City Council just pass City of Yes, a slate of housing policy reforms aimed at more rapidly adding residential units.

“For local politicians, it used to be that the penalty for taking that courageous vote on housing reform would be too great,” Phillips says. “I feel like now we’re in a place where you’re going to pay the price either way. You’ll be punished for helping solve the housing crisis, or for not doing enough. If I’m going to be punished, I’d like it to be for doing the right thing.”

In short, city voters have supported increased taxation and investment to tackle the nation’s housing affordability and homelessness challenges. Yet they’re still far from happy about the job local governments have done.

“People mostly have a place to live, they just can’t afford the place that they have,” says Mari Castaldi, director of state housing policy for the Center for Budget and Policy Priorities.

As Phillips notes, it’s perhaps not coincidental that “bastions of democratic governance,” such as New York City, have seen both a turn toward Donald Trump and a backlash toward supportive housing and homeless policies.

The new funding helps. These recent investments have certainly made sure the housing problem didn’t get manifestly worse, Phillips says. But despite this, housing remains incredibly expensive. To actually get results, cities need to enact regulatory reform, change zoning, and get out of their own way.

That means reducing the time it takes for new buildings to get permitted; getting rid of parking minimums that add to the cost of new developments; allowing taller, denser construction in more parts of the city; and reforming regulation around environmental reviews and other barriers in order to accelerate development. Phillips says that without these kinds of complementary policy changes, the money that cities and states do spend on housing simply doesn’t go as far, or build as fast, as the problem demands.

And there are signs some cities have been bold enough to make changes here, too. Sacramento, California, became the first city in the state to allow multiunit buildings citywide earlier this year, while Spokane, Washington, has gained a reputation for zoning changes that allow for denser construction and getting rid of parking minimums.

No Help From The Feds

Cities and states have to carry this burden because many of the levers of housing policy remain in local control. The federal government can provide subsidies for construction and housing vouchers. The Biden administration was trying to improve housing investment, for instance, but failed to make the significant shift it initially proposed. Efforts to expand housing vouchers and add significantly more direct housing funding into the Inflation Reduction Act fizzled, says Chris Herbert, managing director for Harvard University’s Joint Center for Housing Studies.

The incoming administration will certainly challenge cities to do more with less. CBPP’s Castaldi says that the federal fight over expanding the Trump tax cuts in 2025, and budget changes proposed by the incoming administration, may mean significantly less funding for federal housing vouchers. Factor that in with the impending expiration of a pandemic-era emergency voucher program, and it could mean many more Americans will struggle to pay rent, adding additional strain to city efforts to provide more affordable housing.

And, looking forward even further, the stakes around solving this impasse have gotten higher, both personally for voters, and politically for Democratic politicians. Ineffective housing policy means more voters leaving blue cities and states, the consequences of which will be fewer electoral votes and a rougher road for Democrats on the national level.