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Trump's 2026 Housing Plan: Deregulation and Developer Incentives

  //house-home.news-articles.net/content/2026/01/0 .. -plan-deregulation-and-developer-incentives.html
  Published in House and Home on Wednesday, January 7th 2026 at 14:35 GMT by CNBC

Trump’s Housing Plan: A Return to Deregulation and Developer Incentives Aimed at Boosting Supply – But Will it Work?

A recent CNBC article (“Trump’s Housing Plan: A Return to Deregulation and Developer Incentives,” January 7, 2026) details Donald Trump's evolving approach to tackling the persistent housing affordability crisis in the United States. While specifics are still being fleshed out as he gears up for a potential second term, the core of his strategy revolves around reducing regulations, incentivizing developers, and potentially reintroducing some of the policies that characterized his first presidency. The plan is presented as a direct response to skyrocketing home prices and dwindling inventory, problems exacerbated by years of underbuilding and shifting economic conditions.

The article highlights that Trump’s 2026 proposal significantly departs from the Biden administration's focus on demand-side subsidies, like down payment assistance and tax credits for first-time homebuyers. Instead, Trump argues the primary issue isn’t who can afford a home, but how many homes are available. He believes loosening regulations, particularly zoning laws, will unlock a surge in housing construction, ultimately lowering prices through increased supply.

This echoes rhetoric from his first term, where he advocated for eliminating “unnecessary” regulations hindering development. The CNBC piece points to a memo circulated by his campaign team outlining plans to encourage states and local governments to adopt policies that promote denser housing, such as allowing for more multi-family units and reducing minimum lot sizes. The incentive? Potential federal funding tied to housing production goals, a strategy that effectively leverages financial pressure to push for local zoning reform.

However, the article isn't shy about pointing out the potential pitfalls of this approach. Critics, including housing economists interviewed by CNBC, argue that simply reducing regulations doesn't guarantee affordability. While increased supply is crucial, it doesn't automatically translate to homes that are accessible to low and middle-income families. The piece details concerns that developers, freed from zoning restrictions, may focus on building luxury homes that command higher prices, neglecting the need for affordable options.

This concern is backed up by data cited in a linked report from the National Low Income Housing Coalition (NLIHC), which demonstrates a consistent and growing gap between housing wages – the hourly wage needed to afford a modest rental unit – and actual wages earned by many workers. The NLIHC report specifically states that even with increased construction, the focus needs to be on deeply affordable units, not just market-rate housing, to meaningfully address the crisis.

Trump’s plan also includes a renewed emphasis on streamlining the Federal Housing Administration (FHA) loan process. He aims to reduce bureaucratic hurdles for developers seeking FHA financing, believing this will encourage more construction, especially for first-time homebuyers. This harkens back to his first term where he pushed for deregulation within the FHA, arguing it was stifling lending. However, concerns about loan quality and potential risks to the FHA insurance fund, as noted in a 2024 Government Accountability Office (GAO) report linked within the CNBC article, remain. The GAO report cautioned that loosening lending standards without adequate safeguards could lead to increased defaults and financial strain on the agency.

Beyond deregulation and FHA reforms, the CNBC article also touches upon Trump's interest in incentivizing the use of modular and prefabricated housing. He sees these innovative construction methods as a way to lower building costs and speed up the construction process. This aligns with a broader trend in the industry, where prefabricated construction is gaining traction as a potentially scalable solution to the housing shortage. However, the article acknowledges that widespread adoption of modular construction requires addressing challenges related to building codes, transportation, and workforce training.

Finally, the article notes a potential conflict with the Biden administration's efforts to promote “fair housing” and address historical discriminatory practices. Trump’s focus on deregulation is seen by some as potentially undermining these efforts, as it could lead to a resurgence of exclusionary zoning practices that historically limited housing opportunities for marginalized communities.

In conclusion, Trump’s 2026 housing plan represents a significant shift in approach. While the promise of increased supply through deregulation and developer incentives is appealing, the CNBC article, bolstered by linked reports, paints a nuanced picture. The plan’s success hinges on whether it can effectively address the affordability gap for low and middle-income families, avoid exacerbating existing inequalities, and mitigate the potential risks associated with deregulation. The debate over whether supply-side solutions alone are enough to solve the housing crisis is likely to intensify as the election season progresses.