New affordable housing construction projects may see a decrease nationally depending upon the fate of a budget cut being proposed by the Trump administration.
Several weeks ago the White House announced that it wanted to see a $27 billion reduction in programs designed to provide aid in the form of rental support to low-income tenants.
Reducing such programs could have the effect of dampening the rental market, which in turn may cause developers and builders to be less interested in lower income apartment complex construction, notes the Wall Street Journal.
The paper reports that as of now what would be a 43% cut in the rental assistance programs is “creating enough uncertainty that some lenders are already pulling back, stalling new affordable housing projects.”
In a statement, the Urban Institute has said that the reduction in federal support for the program would “severely decrease housing stability.”
“Amid a nationwide affordable housing crisis, the proposal runs directly counter to the needs of many Americans,” the statement continued.
But the Department of Housing and Urban Development, under Trump’s directive, has said its only goal is to reduce excessive spending in the program. “We want to be lean and mean, not bloated and bureaucratic,” Scott Turner, HUD director, remarked in Senate hearings last month.
According to HUD, the number of rental units that are currently subject to rental assistance varies widely state by state, with the number reaching more than 431,600 units in California and around 218,500 units in Texas.
Total units in Arizona, Colorado, and New Mexico are near the 100,000 mark each. Altogether, around 5 million people in the U.S. receive federal assistance to help pay for their rent.
Concerns that the budget reduction will impact new housing construction have reached the House Appropriations Committee, which has moved to decrease the Trump cuts.
The Senate Appropriations Committee is scheduled to take up the question this week.
July 24, 2025
By Garry Boulard
Photo courtesy of Unsplash
