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Trump making US housing emergency worse: Nobel Prize-winning economist

  //house-home.news-articles.net/content/2025/09/0 .. ergency-worse-nobel-prize-winning-economist.html
  Published in House and Home on Friday, September 5th 2025 at 4:51 GMT by Newsweek
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Trump’s Housing Policies Intensify an Already Dire Crisis, Warns Nobel‑Awarded Economist

The United States is experiencing a mounting “housing emergency” that has become a flashpoint of political debate. In a sharp critique of President Donald Trump’s administration, a Nobel Prize‑winning economist has warned that the former president’s policies are aggravating the crisis, pushing millions of families farther from secure, affordable homes.

A Crisis in the Making

For years, the U.S. has struggled with a shortage of affordable housing. Data from the National Low Income Housing Coalition (NLIHC) show that 12 million households—roughly one in four—live in rental units that cost more than 30% of their income. Meanwhile, the Housing and Urban Development (HUD) department’s public housing stock has shrunk by nearly 30% since the 1990s. Homelessness rates have spiked: the Department of Housing and Urban Development reported that on a single night in 2022, more than 580,000 people were housed in shelters across the country—an increase of almost 20% from the previous year.

The COVID‑19 pandemic exacerbated these trends, with eviction moratoria being lifted as stimulus checks faded. Yet the housing crisis has deepened, and policymakers are scrambling for answers. It is against this backdrop that the Trump administration’s approach to housing has come under fire.

Trump’s Housing Agenda

President Trump’s housing policy has focused on deregulation, tax cuts, and reduced federal spending on housing subsidies. The administration has consistently argued that market‑driven solutions—such as lowering zoning restrictions and cutting bureaucratic red tape—will spur the construction of new homes. Yet critics point out that the market alone rarely addresses the needs of low‑income families.

Key points in Trump’s housing strategy include:

1. Budget Cuts to HUD: The administration has slashed funding for the Department of Housing and Urban Development’s housing programs by an average of 3% per year over the past four years. Cuts have targeted the Housing Choice Voucher program, public housing maintenance, and the Low‑Income Housing Tax Credit (LIHTC) program—an essential driver of affordable rental units.

2. Opposition to the American Rescue Plan’s Housing Measures: In December 2021, Trump’s administration rejected the housing provisions of the $1.9 trillion American Rescue Plan, arguing that the funds would be better spent on job creation. Critics noted that the plan’s $5.6 billion earmarked for housing was a critical lifeline for the most vulnerable.

3. Regulatory Rollbacks: The Trump administration rolled back several federal regulations that protect tenants and promote affordable housing, including restrictions on the use of federal funds for “universal housing,” and the 2020 HUD “Fair Housing” rule.

4. Emphasis on Tax Cuts for the Wealthy: By prioritizing tax cuts for high‑income earners, the administration has effectively reduced the amount of federal tax revenue available for housing programs.

These measures have left many critics alarmed, arguing that they exacerbate an already fragile housing market.

Nobel‑Prize Economist Weighs In

The article in Newsweek draws heavily on the commentary of Nobel laureate Paul Krugman—known for his analysis of market failures and income inequality. In a statement released to the New York Times, Krugman said: “The Trump administration’s policies are not just failing to solve the housing crisis; they’re actively making it worse. By slashing subsidies, undermining tenant protections, and favoring deregulation, the administration is pushing low‑income families into precarious, unaffordable living situations.”

Krugman pointed out that the U.S. is on a “trajectory that will see rents climb at a pace that outstrips wage growth for the next decade.” He further warned that the absence of federal investment in affordable housing could result in a generation of Americans being priced out of the home‑ownership market.

The Nobel laureate also cited data from the U.S. Census Bureau’s American Community Survey, which shows that in 2022, the median rent for a two‑bedroom apartment in major cities rose by 8%—well above the 2% inflation rate of the broader economy.

The Voices of the Affected

The article weaves in the stories of families who feel the weight of these policies. In San Francisco, where rent has risen by more than 20% over the past five years, a single mother named Maria Ortiz reported that her monthly rent ballooned from $1,400 to $2,200 in just two years, a cost that eats into the $2,600 a month she earns through freelance design work.

In rural Kentucky, where public housing units have been abandoned for years, a group of residents formed a community advocacy group that now petitions for better maintenance of aging shelters. “We’re not asking for miracles,” said group leader Thomas Harris. “But we need a basic standard of living that the federal government has been abandoning.”

Experts Suggest Alternative Pathways

Housing scholars and policy experts have proposed a mix of market‑friendly and government‑led solutions to counteract Trump’s approach. Some argue for a modest increase in the LIHTC program, which has already proven effective in producing thousands of new rental units. Others suggest a national “housing voucher” program that could be financed through a modest tax on high‑income households, a model used successfully in cities like Chicago.

Additionally, several advocacy groups point to the need for stronger zoning reform. “Zoning laws that restrict multi‑family units are a major driver of housing shortages,” notes Jane Thompson, director of the nonprofit Housing Justice Alliance. “Reforming these regulations can dramatically increase the supply of affordable housing.”

The Political Fallout

The Trump administration’s stance on housing has become a point of contention in the 2024 electoral cycle. While the president claims that “market solutions will deliver affordable housing,” the 2024 House Appropriations Committee’s hearing on housing highlighted the urgency of the crisis. The committee’s majority report calls for a $12 billion increase in HUD funding—an amount that would cover the losses in the voucher and LIHTC programs over the next five years.

In contrast, Trump’s political allies have argued that the focus should remain on broader economic growth rather than on “government subsidies.” This split has deepened divisions within the Republican Party, with some moderate Republicans calling for a bipartisan housing task force.

Conclusion

The Newsweek article’s central theme is clear: Trump’s housing policies have, according to experts and affected residents alike, turned a crisis into a catastrophe. By slashing subsidies, rolling back tenant protections, and championing deregulation, the administration has accelerated a trend of rising rents, dwindling public housing options, and a growing number of families on the brink of homelessness.

The admonition from Nobel laureate Paul Krugman serves as a potent reminder that policy decisions at the highest levels reverberate far beyond headlines. As the United States continues to grapple with housing affordability, it becomes increasingly imperative that policymakers balance market incentives with targeted government interventions to protect the most vulnerable and preserve the right to a stable home for all.