The Trump Administration's Fake Housing Emergency
The results of America's overly burdensome housing regulations aren't great. But they're not an "emergency."
Happy Tuesday, and welcome to another edition of Rent Free. As I mentioned last week, I'm on vacation and out of the country. So this newsletter, like the last, will be a bit shorter and a little less pegged to the news.
Rather, I wanted to write about the housing "emergency" that the Trump administration is mulling and what it could possibly do, given all the ways the administration is currently working to make housing more expensive.
And return next week for more regular programming.
Trump's Housing Nonemergency
On Monday, the Washington Examiner published an interview with U.S. Treasury Secretary Scott Bessent, who said that the administration was considering declaring a housing emergency later this fall.
Bessent declined to describe any specific policies that might be included in the housing emergency, saying only that the administration was studying how to "standardize" local building and zoning codes while respecting local autonomy.
"We're trying to figure out what we can do, and we don't want to step into the business of states, counties, and municipal governments," said Bessent.
Rent Free Newsletter by Christian Britschgi. Get more of Christian's urban regulation, development, and zoning coverage.
The secretary's comments all suggest this housing emergency declaration is very much a work in progress, if it is declared at all.
Indeed, the fact that the administration is studying potential actions it might take within a few months doesn't quite sound like it considers the state of housing in the country to be a proper dictionary-definition emergency requiring immediate action to prevent the loss of life, limb, and property.
Rather, it would appear this would be another "emergency" that the president will declare to force through policy changes that in nonemergency times would require going through the federal rule-making process or even, gasp, Congress.
Even assuming that's the case, it's not clear what federal actions or directives might be included in a declared "housing emergency" from this White House.
If the administration wanted to "standardize" zoning codes, the president could pull a YIMBY DOGE move and freeze grants going to localities with high housing costs, low housing production, and excessive land use regulations. The first Trump administration did in fact consider a similar policy as part of its rewrite of federal fair housing regulations.
But this seems exceedingly unlikely in a second Trump administration.
The new fair housing rules issued by the administration make it abundantly clear that the White House does not want to use federal funds to influence local land use policies.
In the latest presidential budget request, the White House called for defunding the small Pathways to Removing Obstacles (PRO) Housing grant program, which was intended to incentivize localities to liberalize their zoning codes.
The White House claimed the program had been hijacked for woke purposes and instead proposed "allowing States and local governments to address affordable housing and development challenges within their communities."
A housing emergency that did try to tie federal dollars to local land use liberalization in some fashion would therefore be a major course change. That seems exceedingly unlikely.
The same thing can mostly be said for any effort the Trump administration might make to "standardize" building codes. Building codes for residential development are written by nonprofit code councils and then adopted by states and localities.
Other than the influence they can get from attaching strings to federal funding, the administration has no direct power over building codes.
The one exception is the building code for the manufactured housing, which is set at the federal level by the U.S. Department of Housing and Urban Development (HUD). A housing emergency could direct the department to find ways of streamlining the manufactured housing code.
The last administration did this via the normal regulatory process. There's no reason, and no seeming political downside, to stopping the Trump administration from looking for more options for liberalizing the HUD code.
But the white whale of chassis reform (removing the requirement that manufactured housing sit on a permanent steel chassis) would require congressional action.
One thing the administration could do that would be squarely in the federal wheelhouse, and wouldn't involve trying to influence local land use policy, would be lifting tariffs on imported building materials and appliances.
That steel chassis would be cheaper if imported steel didn't have to pay high tariffs. Likewise, homebuilders would celebrate the lifting of tariffs on imported lumber and gypsum.
The trouble here is that Trump is ideologically committed to raising tariffs on imports and has singled out building materials for increased tariffs.
Last month, the administration doubled duties on imported lumber from Canada. The administration has also recently applied its 50 percent steel and aluminum tariffs to home appliances and furniture.
In court, the administration is also fighting tooth and nail to preserve its emergency powers to levy tariffs. So, builders and homebuyers can expect no relief from tariffs in any eventual Trump administration housing emergency.
Another possible action that could do that and would be more ideologically aligned with the Trump administration would be some sort of emergency transfer of federal lands to states and localities to use for housing.
The administration already has an initiative to identify and dispose of federal lands that can be used for housing. The Bureau of Land Management also does have the authority to sell off surplus lands, although the process for doing so is long and legally intensive.
It's possible that a housing emergency declaration could suspend some of the process involved in selling off federal lands. As far as policy goes, that would be a fine initiative.
But any attempt to suspend procedural steps in federal land sales would undoubtedly attract lawsuits from environmental groups who are dead opposed to privatizing federal land for additional development. Practically, that seems like a dead end.
Something similar could be said for other marginal actions the federal government could take in a declared "housing emergency," like streamlining or waiving requirements around federal clean water permits or energy efficiency rules. While it might be a good idea on policy grounds, any effort to route around the law and bureaucratic process via the invocation of emergency powers is undoubtedly going to be challenged in court.
In general, emergency rules that might be stopped by the courts and that could be withdrawn by the administration at the drop of a hat are not the ideal regulatory regime for something like housing, which requires substantial investment of time, land, and capital to build.
American land use is too regulated, and housing costs too much as a result. The fruits of this overregulation—higher home costs, few housing options, more homelessness—are dire. But they're not a proper emergency.
Fixing this state of affairs is going to require more permanent legislative action, ideally at the state and local level.
Presidents do have an outsized role in the discourse and can use that role to help drive policy. A toothless "housing emergency" could help spur productive legislative change, if that's what Trump wants to use his bully pulpit for.
Unfortunately, Trump generally uses his bully pulpit to complain that America allows too much housing, not too little. Even rhetorically, his housing emergency is likely to disappoint.
