White House Promises ‘Trump Boom’ of New Housing by Cutting Red Tape

The White House says it is moving forward with policies that cut the "bureaucrat tax" on building new homes, arguing red tape has led to a slowdown that kept 10 million homes from being completed.

In an economic report released late Monday, the Trump administration blamed the housing shortage on a variety of factors. It also laid out economic data to justify President Donald Trump's efforts to make housing more affordable, including his constraints on institutional investor homebuyers.

"President Trump understands real estate like no previous President in history, and his Administration is committed to protecting and restoring the American dream of homeownership," the report states.

Trump has taken a series of measures this year, aimed at easier homebuying. He's put pressure on the Fed to lower interest rates, sought to reduce environmental regulations put forth by the Biden administration, and suggested other ideas.

A bipartisan housing bill is currently gridlocked in Congress, in part because lawmakers are resistant to codify a stricter version of Trump's institutional investor ban. That ban also includes constraints on build-for-rent housing, which critics argue could reduce investment in residential construction.

Rolling back the 'bureaucrat tax'

Housing is one of 14 topics in the annual report, which was prepared by the Council of Economic Advisers at the behest of the White House.

In it, the White House reiterated the goal Trump has often repeated: to make it easier for young people to buy a home, but without crashing existing home values and reducing the record-high equity wealth that homeowners enjoy.

If the pace of homebuilding had resumed at pre-crash levels after the 2008 global financial crisis, there would be 10 million additional homes constructed today, the report states. Reversing barriers to building, it said, could bolster supply again.

"The Trump Administration has shifted economic policy decisively away from the Biden Administration’s approach of government-driven demand and government-impaired supply to a new posture of private sector-driven demand and healthy supply unleashed by deregulation, pro-growth tax relief, and America First trade," the report states.

It notes that deregulation is a first priority. While the federal government has limited ability to regulate zoning and building regulations, it has turned back some of the environmental regulations put in place by Biden.

The report argues that "increasingly pervasive California-style fees, mandates, regulations, and red tape that add expensive government overhead to the cost of building" are a "the government bureaucrat tax on housing supply."

But the administration also cited its strict immigration policy for deterring "waves of illegal immigrants bidding up rents and house prices."

While population growth has indeed declined under Trump, experts including JPMorgan Chase and others doubt that immigration policies have impacted housing in that way. They also carry negative implications for homebuilding, as immigrants account for a large share of the construction workforce.

Congressional action caught in gridlock

Trump reiterated his push to expand homeownership last month as he signed several executive orders aimed at rules governing both mortgage lenders and home construction.

He blamed both a "thicket of unnecessary rules and restrictions that crippled community banks" and “endless ridiculous construction costs” for driving up costs.

“We want America to be a nation of owners, not renters," Trump said in announcing the two executive orders.

Meanwhile, the House and Senate have each passed a multipart, bipartisan housing bill with many deregulation-related measures. But they must reconcile their two versions before Trump can sign the bill.

Lawmakers say work is needed on several measures, including an outright ban on large institutional investors buying homes.

The White House has pushed several competing priorities since then, including the voting-related SAVE America Act. The legislative path has also been clogged by haggling over a partial government shutdown of the Department of Homeland Security and debate over war powers resolutions related to military action in Iran.

Democrats, meanwhile, have blamed Trump's tariff policies for driving up the cost of construction materials.

They've also pitched several ideas of their own to address the housing crisis, including crackdowns on corporate landlords and expansion of the Low-Income Housing Tax Credit.