We know our member businesses are grappling with an acute shortage of affordable housing for their employees and are concerned about our states’ growing housing crisis. At a recent Housing Policy Conference hosted by the Maine Affordable Housing Coalition, stakeholders from across the state gathered to discuss potential solutions, policy developments, and strategies to address this major issue.
These discussions have important implications for industries like tourism and hospitality, where workforce shortages are directly tied to the lack of available housing. For business owners and managers who have been struggling to secure housing for their staff, understanding the latest trends and initiatives in the housing market is crucial. In this summary, we highlight key insights from the conference that may help guide your business decisions in the coming months and years.
Part I: Federal Housing Policy Outlook
Affordable housing is a critical issue all over the United States, making this a strongly bipartisan issue. However, challenges remain.
Of key importance is the extension of the Trump-era tax cuts, estimated to cost $4.6 trillion over the next 10 years–if legislators choose to fund these tax cuts through spending reductions, this could mean cuts to affordable housing expenditures. Funding for programs like HOME (the largest federal block grant to state and local governments designed exclusively to create affordable housing for low-income households) and rental assistance may be especially at risk. For example, the House is proposing to cut the HOME budget allocation from $1.5 billion to $500 million.
While there is momentum and bipartisan support for housing initiatives, significant fiscal challenges and legislative hurdles remain. The Trump administration's housing plans include several proposed policies, though many lack specific details.
Key areas of focus include:
-
Homeownership Support: Promoting homeownership via tax incentives for first-time buyers and addressing the supply shortage, with potential support for programs like the Neighborhood Homes Investment Act and mortgage revenue bonds.
-
Reducing Regulatory Barriers: Plans to lower regulations, including permitting and environmental rules, though most such barriers are state/local rather than federal. Potential changes could include easing Build America, Buy America (BABA) requirements (which require that all iron, steel, manufactured products, and construction materials used in covered infrastructure projects are produced in the United States) and revising the Davis-Bacon Act (an act which directs the Department of Labor to determine locally prevailing wage rates for contractors and subcontractors working on public buildings or public works).
-
Mortgage Rates and Inflation: General intentions to reduce mortgage rates by addressing inflation, though without clear policies yet.
-
Immigration and Workforce: Proposed deportations could disrupt industries reliant on undocumented workers, including construction and service sectors, potentially straining housing availability.
-
Use of Federal Lands: Proposals to make surplus federal lands available for housing construction, with potential changes to Title V under the McKinney-Vento Act (which enables eligible organizations to use unutilized, underutilized, excess, and surplus Federal properties to assist persons experiencing homelessness).
-
Tariffs: New tariffs on imports may have an impact on the cost of construction materials.
-
Green Energy Provisions: There is ambiguity surrounding the future of Inflation Reduction Act funding. For low-income communities, the IRA included more than $25 billion of direct spending that could be used for affordable housing in the form of several U.S. Department of Housing and Urban Development (HUD), U.S. Environmental Protection Agency (EPA) and U.S. Department of Energy programs (DOE) programs, among other incentives and initiatives.