A ‘For Sale’ sign is seen on March 19 in Austin, Texas. Policymakers are watching for indications of what President-elect Donald Trump plans to do to ease housing costs next year after an election where voters were laser-focused on the economy.

Americans hand over a huge chunk of their paycheck for a roof over their heads. Policymakers are looking out for indications of what President-elect Donald Trump plans to do to ease housing costs next year after an election where voters were laser-focused on the economy.

Housing accounted for 32.9% of consumers’ spending in 2023, making it the largest share of consumer expenditures, according to the most recently available data Bureau of Labor Statistics. And that was an increase of 5.7% from 2022.

This year, many Americans still struggle to find affordable housing, whether they choose to rent or buy a home.

There’s a lot economists and housing advocates still don’t know about what to expect from a second Trump term. It’s unclear which campaign promises will find their way into administrative rules or  legislation, even with a Republican trifecta – the GOP will control the White House and both chambers of Congress.

But policy experts, researchers and economic analysts are looking at Trump’s record, his recent remarks on housing, and  Project 2025 – the conservative Heritage Foundation’s 900-page plan to overhaul the executive branch – for a glimpse of what may lie ahead.

Tariffs and the cost of building homes

Trump has spoken frequently of his proposed 60% tariff on goods from China, which he has said would create more manufacturing jobs in the U.S. Tariffs could be as high as 20% on goods from other countries.

But housing economists and other experts say that could be bad news for building more affordable housing.

Selma Hepp, chief economist for CoreLogic, a financial services company, said tariffs are one of her main concerns about the effects of a second Trump term.

“One of the biggest concerns is not just lumber [costs], but the overall cost of materials, which have been going up,” said Selma Hepp, chief economist for CoreLogic, a financial services company.

Construction material prices have risen 38.8% since February 2020, according to an Associated Builders and Contractors’ analysis of October Producer Price Index data.

Kurt Paulsen, professor of urban planning in the department of planning and landscape architecture at the University of Wisconsin at Madison, said building costs are already high from tariffs on Canadian lumber that Trump first imposed and that the Biden administration kept and increased.

“It used to be in construction that you would get a bid from a contractor or a subcontractor or supplier and it would be good for 60 days. Now, the bids are good for like five days because you don’t know where prices are going to be,” he said.

Immigration policy and its effect on construction labor

Trump tweeted on Nov. 18 that he is planning to use the declaration of a national emergency as part of his mass  deportation plan.

Besides disrupting lives, Trump’s plan  could have effects on what it costs to build housing, Hepp said.

“There is the cost of labor as well, if we do indeed have all these deportations. That’s a big, big concern,” she said. “A large share of labor in the construction industry obviously comes from immigrants. That is a huge issue for new construction and particularly new construction as it relates to affordable housing.”

Foreign-born construction workers made up 3 million of the 11.9 million people who work in the construction industry in 2023, according to the latest American Community Survey data.

Trump’s ‘not in my backyard’  rhetoric

The former president hasn’t always been clear on where he stands with zoning regulations and making way for more affordable housing in a wide variety of neighborhoods.

In a July Bloomberg interview, Trump spoke critically of zoning regulations and said that they drive up housing costs. But Trump also has a record of tending toward a “not in my backyard,” or NIMBY, approach to housing that maintained some of these zoning regulations. The Trump administration moved to roll back an Obama-era regulation that tied HUD funding to assessing and reducing housing discrimination in neighborhoods.

“He’ll talk about reducing regulations on developers, but he’ll also use this NIMBYism talking about protecting suburbs from low-income housing and you really can’t have it both ways,” said Sarah Saadian, senior vice president of public policy and field organizing at the National Low Income Housing Coalition.

Paulsen said Project 2025 embraces a pushback against anti-NIMBY approaches to expand multi-family housing.

“What I read in the Project 2025 documents is a clear statement that says every local community and neighborhood should be able to choose the housing it wants to accept or not. The challenge of that is that if every community in every neighborhood can veto housing, then we just don’t get enough housing and prices go up and prices and rents go up,” he said.

A more punitive approach to homelessness 

Last year, homelessness rose to its highest level recorded since the U.S. Department of Housing and Urban Development began collecting this information in 2007. The ending of pandemic safety nets that gave some households better financial stability and a lack of affordable housing supply contributed to the number of unhoused people, the report explained.

Trump has been outspoken on his view that homeless people should be “off our streets.” The president-elect has also proposed putting unhoused people with mental health issues into “mental institutions.”

“There’s a movement that I think is largely reflected in Project 2025 that says, actually, cities need more coercive policy tools to enforce public order and to require that someone who’s camping take a shelter placement even if they don’t want it,” Paulsen said.

Saadian said that given the U.S. Supreme Court ruling in Grants Pass v. Johnson, which makes it easier to criminalize unhoused populations for sleeping outside, she’s worried about a changing political environment where policies that prioritize stable housing over policing fall out of favor.

“I think all of that just shows a culture shift in the political dynamic here that we’re definitely worried about,” she said.

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Tesla owner Elon Musk, right, was hardly alone in the tech sector in supporting the reelection efforts by Donald Trump, left. Many Silicon Valley investors and innovators were hoping for a lighter regulatory hand than they have seen under President Joe Biden. (Photo by Brandon Bell/Getty Images)

Some venture capital investors, who have funded the tech boom in Silicon Valley and beyond, say they are excited by the prospect of a lighter regulatory environment under a new Trump Administration than they saw under President Joe Biden.

But they warn that Trump policies that will benefit many technology companies may come at a cost to other pro-Trump voters.

The Bay Area bubble of Silicon Valley, which is home to institutional tech giants like Apple, Google, Intel and Adobe, had been previously seen as a left-leaning region, like many other California communities. But the 2024 election was a unique one, venture capitalists and founders say.

“There’s been a significant shift in the valley rightward since the last election,” said Joe Endoso, a Silicon Valley investor.  “And you’ve seen that in the financial flows — in the level of dollars — that were directed towards supporting President Trump’s campaign from the technology sector.”

Endoso, president of financial tech platform Linqto, said some tech industry people who previously voted for progressive issues and candidates this time cast their ballot for Trump. He said he’s heard more concern about potential regulations in the tech industry and negative economic effects under continued Democratic leadership.

This turn toward Trump wasn’t universal in the Valley. The majority of donations from employees at companies like Google, Amazon and Microsoft went toward Democratic candidate Kamala Harris, Reuters reported in September. But tech billionaires like Elon Musk and venture capital investors, like Andreessen Horowitz co-founders Marc Andreessen and Ben Horowitz, poured millions into his campaign.

While Trump didn’t receive unanimous support from the tech sector, many American tech giants and investors are excited about the light-handed approach to tech regulation that’s likely to come in the next four years. Congress has struggled to pass any federal laws around emerging technology like AI, though states have done so on their own on issues like data privacy, transparency, discrimination, and on how AI-generated images can be used.

The Biden administration, however, on its own issued a number of “best practice” guides for emerging technologies and aggressively pursued antitrust cases against some tech giants, including an ongoing case against Google that could force the company to spin off its popular Chrome web browser.

It appears unlikely that Trump will continue the Biden era regulatory and enforcement drives.

Those working in emerging technologies like AI are making advancements so quickly that regulators are unlikely to be able to keep up anyway, Endoso said. The tech industry mindset — move fast and break things, first coined by Facebook founder Mark Zuckerberg — will likely continue under Trump’s administration.

“You’re running through walls and hoping that when the regulations come about, they’re not going to be so, you know, restrictive,” Endoso said. “But you’re not going to sit and wait for the regulators. You can’t afford to.”

Why care about the VC market?

Venture capitalists pour money into many promising startups in Silicon Valley and elsewhere, looking for the ones that will create lucrative new technologies or “disrupt” existing ones. Silicon Valley successes include Uber, which received its first round of venture capital investment for just about $1.3 million in 2010, and Airbnb, which started with just a $20,000 investment in 2008. Today, the companies are worth $146 billion and $84 billion, respectively.

Many more, however, fail. High-visibility startups that folded after raising very large sums include streaming platform Quibi, which raised $1.75 billion and ChaCha, the SMS text-based search platform that had raised $108 million.

The high-risk, high-reward nature of the industry makes for a rarified business, and there’s a high barrier to entry. To become an accredited venture capital investor, one must have an income of at least $200,000 a year, or be worth $1 million. The handful of firms pouring the most money into the United States technology market are usually worth billions.

Yet, the technology being developed and funded by wealthy investors today will shape the next decade of everyone’s lives. Some of the most influential technology in the global economy has been released under President Joe Biden’s administration in the last three and a half years.

Advancements in generative AI and machine learning technology, rapid development of augmented and virtual reality, further adoption of cloud computing and Internet of Things (IoT) technologies, such as internet connected appliances and home devices, along with automation of many industries have already shifted much of American life. ChatGPT, one of the most recognizable examples of generative AI that the public can use, was only released two years ago, but the sector of generative AI is already threatening many American jobs.

Those with writing-focused careers like copywriters and social media marketers, are already feeling the disruption, and experts believe STEM professionals, educators and workforce trainers and others in creative and arts fields are going to see much of their job responsibilities automated by AI by 2030. 

The venture capital market has been a volatile one over the last four years. Though many of Trump’s attacks on Democrats during his campaign cycle centered on the healthy economy under his first term, the COVID-19 pandemic was the single-biggest economic factor to disrupt the venture capital market and others.

The U.S. saw its biggest year for venture capital investments in 2021, but supply-chain issues and the continuing reliance on remote work changed the trajectory of many companies’ plans to go public on the stock market. High inflation and interest rates have kept many investors from deploying capital and many companies from completing mergers and acquisitions since then, although the second half of 2024 is looking up.

The economy quickly became the number one issue for Americans in the presidential election cycle. And though thriving venture capital markets usually benefit those that are already wealthy enough to invest, we’ll likely see a positive correlation in the general markets too, said Scott Nissenbaum, president and CEO of Ben Franklin Technology Partners, an innovation-centered fund in Pennsylvania.

“A thriving, efficient market is good for venture capital. And the flip side is also true,” he said. “We feed into and create the innovations and the efficiencies and the next generation … that create the robust and the boom.”

How investors and founders are preparing for Trump 

Nissenbaum predicts that Trump may remove regulations for technology used by U.S. transportation and military systems, allowing for more tech integration than previously permitted without human safeguards in place. That might look like more flight optimization technology, or more drone usage by military branches. Nissenbaum also thinks Trump will attempt to open up space travel, especially with big backing by Musk, who runs SpaceX.

Health care also has been implementing technology rapidly, and Nissenbaum believes could see some major changes under Trump.

That is of note for healthtech founder Sipra Laddha, an Atlanta-based psychiatrist and cofounder of LunaJoy, which provides in-person and virtual wellness visits for women. The three-year-old company raised venture capital in 2022 and 2023, despite a more challenging fundraising market. Women’s health care companies saw a surge of VC investment in the wake of the overturning of Roe v. Wade in June 2022, an exception to the generally slower investment market at the time.

But she is uncertain about how Trump’s potential cabinet appointees, like Robert F. Kennedy Jr., who was appointed to head the Department of Health and Human Services, will affect LunaJoy’s operation. Kennedy has made health a key issue in his public advocacy and political activity, but he has also espoused eccentric and even false views on issues such as vaccines and pharmaceuticals.

“When women don’t have choices, mental health is significantly worse, and that’s something that goes on, often, for the entire time of that family’s trajectory,”  Laddha said. “So I’m not quite sure what’s going to happen, but you know, those are certainly things that, as a women’s mental health company, we are looking at and watching closely to see what sort of legislation, rules and laws come out.”

When it comes to fundraising early next year, Laddha is optimistic. She’s focused on how fragmented the healthcare industry is right now, and plans to showcase how companies like hers will aim to integrate with larger health systems.

“Our role is to be really as disruptive as possible, and to bring to the forefront the most innovative solutions that we can do while still working within the current framework of healthcare that exists today,” she said.

Some sectors worry about Trump economic policy

While software and cloud-based technologists seem excited by the effects of deregulation, startup founders that make physical products, especially using microchip technology, are wary of Trump’s plan to impose tariffs on imported goods.

Samyr Laine, a managing partner at Los Angeles-based Freedom Trail Capital, specializes in consumer tech and consumer packaged goods. Laine said he feels a sense of relief in ending the “uncertainty” around who will take the presidency the next four years, but he predicts many founders will feel the costly effects of Trump’s planned tariffs, and pass those additional costs to consumers.

Though the existing companies in his portfolio won’t be hit too hard, it’s a factor they’ll be forced to review when considering investments in companies in the future. Those that will incur the additional costs of imported goods will have to adjust their profit margins and might not be as attractive to investors.

“As a consumer and someone who isn’t in the space, not to be like a fear monger, but expect that some of the things you typically pay for, the price will go up,” Laine said.

The effect on work

Although Trump was successful in picking up a significant amount of tech industry elite support this election season, much of his voter base is working class people who will not feel the positive effects of tech industry deregulation.

Endoso, the Silicon Valley investor and founder, says the Trump coalition of tech entrepreneurs and working-class voters represents “a division between the haves and the have-nots.” The usual basis on which people pick their electoral preferences, like race, geography, income and proximity to city life, were “shattered” this time around.

“It was a revolt of the working class, at least in my view,” he said.

The advancements of AI and machine learning, which will enrich the investor class, will have large implications on employment for those working class voters. The vast majority of Americans who are not college educated, and work physical jobs, might struggle to thrive, he said. We’ll likely see overhauls of industries as robots replace and automate a majority of physical labor in warehouses, and self-driving vehicles take over jobs like long-haul trucking and ride services such as Uber and Lyft.

“I think those are important questions to be asking from a policy standpoint, and I think that the intelligent answers shouldn’t be ‘let’s shut the innovation down.’” Endoso said. “That didn’t work in 19th century England. It won’t work here today, right? But it does require our rethinking the definition of work, and the definition of how you … organize a society along lines where you don’t need to have the same level of maybe direct labor input as we had in the past.”

Nissenbaum agreed, saying that AI has already begun to leak into every field and industry, and will only continue to disrupt how we work. As revolutionary as the internet and internet companies were in the late 1990s, the web has become the infrastructure for artificial intelligence to become more efficient and effective at everything it does.

With lighter regulation under a new Trump administration, we’re likely to see AI develop at unpredictable rates, he said. And laborers will definitely be feeling the effects over the next four years.

“You’re not going to lose your job to AI,” Nissenbaum said. “You’re going to lose your job to someone who understands how to do your job with AI.”

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The Republican presidential nominee, former U.S. President Donald Trump, on Tuesday, Oct. 15, spoke to the Economic Club of Chicago. In this photo, he speaks to attendees during a campaign rally at the Mosack Group warehouse on Sept. 25 in Mint Hill, North Carolina. (Photo by Brandon Bell/Getty Images)

Republican presidential nominee Donald Trump defended his plans for steep tariffs on Tuesday, arguing economists who say that those higher costs would get passed onto consumers are incorrect and that his proposals would benefit American manufacturing.

During an argumentative hour-long interview with Bloomberg Editor-in-Chief John Micklethwait hosted by the Economic Club of Chicago, Trump vehemently denied tariffs on certain imported goods would lead to further spikes in inflation and sour America’s relationship with allies, including those in Europe.

“The higher the tariff, the more likely it is that the company will come into the United States, and build a factory in the United States so it doesn’t have to pay the tariff,” Trump said.

Micklethwait questioned Trump about what would happen to consumer prices during the months or even years it would take companies to build factories in the United States and hire workers.

Trump responded that he could make tariffs “so high, so horrible, so obnoxious that they’ll come right away.” Earlier during the interview, Trump mentioned placing tariffs on foreign-made products as high as 100% or 200%.

Harris-Walz 2024 spokesperson Joseph Costello wrote in a statement released following the interview that “Trump showed exactly why Americans can’t afford a second Trump presidency.”

“An angry, rambling Donald Trump couldn’t focus, had to be repeatedly reminded of the topic at hand, and whenever he did stake out a position, it was so extreme that no Americans would want it,” Costello wrote. “This was yet another reminder that a second Trump term is a risk Americans simply cannot take.”

Smoot-Hawley memories

Micklethwait noted during the interview that 40 million jobs and 27% of gross domestic product within the United States rely on trade, questioning how tariffs on those products would help the economy.

He also asked Trump if his plans for tariffs could lead the country down a similar path to the one that followed the Smoot-Hawley tariff law becoming law in June 1930. Signed by President Herbert Hoover, some historians and economists have linked the law to the beginning of the Great Depression.

Trump disagreed with Micklethwait, though he didn’t detail why his proposals to increase tariffs on goods from adversarial nations as well as U.S. allies wouldn’t begin a trade war.

The U.S. Senate’s official explainer on the Smoot-Hawley tariffs describes the law as being “among the most catastrophic acts in congressional history.” And the Congressional Research Services notes in a report on U.S. tariff policy that it was the last time lawmakers set tariff rates.

Desmond Lachman, senior fellow at the American Enterprise Institute, a conservative-leaning think tank, wrote last month that Trump’s proposal to implement tariffs of at least 60% on goods imported from China as well as 10 to 20% on all other imports could have severe economic consequences.

“It is difficult to see how such a unilateral trade policy in flagrant violation of World Trade Organization rules would not lead to retaliation by our trade partners with import tariff increases of their own,” Lachman wrote. “As in the 1930s, that could lead us down the destructive path of beggar-my-neighbor trade policies that could cause major disruption to the international trade system. Such an occurrence would be particularly harmful to our export industries and would heighten the chances of both a US and worldwide economic recession.”

CRS notes in its reports that while the Constitution grants Congress the authority to establish tariffs, lawmakers have given the president some authority over it as well.

The United States’ membership in the World Trade Organization and various other trade agreements also have “tariff-related commitments,” according to CRS.

“For more than 80 years, Congress has delegated extensive tariff-setting authority to the President,” the CRS report states. “This delegation insulated Congress from domestic pressures and led to an overall decline in global tariff rates. However, it has meant that the U.S. pursuit of a low-tariff, rules-based global trading system has been the product of executive discretion. While Congress has set negotiating goals, it has relied on Presidential leadership to achieve those goals.”

The presidency and the Fed

Trump said during the interview that he believes the president should have more input into whether the Federal Reserve raises or lowers interest rates, though he didn’t answer a question about keeping Jerome Powell as the chairman through the end of his term.

“I think I have the right to say I think he should go up or down a little bit,” Trump said. “I don’t think I should be allowed to order it. But I think I have the right to put in comments as to whether or not interest rates should go up or down.”

Trump declined to answer a question about whether he’s spoken with Russian leader Vladimir Putin since leaving office.

“I don’t comment on that,” Trump said. “But I will tell you that if I did, it’s a smart thing. If I’m friendly with people, if I have a relationship with people, that’s a good thing, not a bad thing.”

Journalist Bob Woodward wrote in his new book “War” that Trump and Putin have spoken at least seven times and that Trump secretly sent Putin COVID-19 tests during the pandemic, which the Kremlin later confirmed, according to several news reports.

Trump said the presidential race will likely come down to Pennsylvania, Michigan and possibly Arizona.

The Economic Club of Chicago has also invited Democratic presidential nominee Kamala Harris for a sit-down interview.

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