Experts see opportunity in a national emergency declaration, but aren't convinced it would make much difference.
Treasury Secretary Scott Bessent hinted at the housing emergency declaration during a Labor Day interview with the Washington Examiner.
While Bessent hasn’t offered specifics, he told the Examiner that standardizing local building and zoning codes and decreasing closing costs are some options. The Treasury Department did not respond to requests for an interview for this story.
“We’re trying to figure out what we can do, and we don’t want to step into the business of states, counties and municipal governments,” Bessent told the Examiner. “I think everything is on the table.”
A crisis years in the making
The housing affordability crisis has been simmering since the pandemic, causing a freeze in home sales so far in 2025. By early 2025, U.S. home prices had soared 60% since 2019 and are still climbing at a rate of 3.9% year over year, according to research from the Joint Center for Housing Studies at Harvard University. The median existing single-family home price reached $412,500 in 2024, or five times the median household income.
“The price of housing has increased much faster than the overall standard of living cost increases that we’ve seen,” said Jonathan Ernest, assistant professor of economics at Case Western Reserve University.
But will declaring a national housing emergency tangibly bring these costs down for most Americans? Or is it merely political theater?
Many housing experts don’t think an emergency declaration is enough to move the needle on its own. However, if the Trump administration puts some muscle behind the effort — namely, investing money in affordable housing research to modernize homes and incentivizing local and state governments to cut red tape on zoning and permitting laws — it could get the ball rolling, they say.
“Housing affordability is not a Republican or Democrat or Independent or libertarian or Green Party issue; it affects everyone,” said Nicholas Irwin, associate professor of economics at the University of Nevada Las Vegas. “There’s no magic bullet. It's just a series of little things, and given enough time, those little things will make a big difference.”
He adds that “political timelines don't line up with market timelines” in driving affordability changes.
How Declaring a Housing Emergency Might Help
A national emergency declaration gives the president power to act without approval from Congress, with access to certain emergency powers outlined by federal law.
There are some avenues the Trump administration could take to help lower housing costs. Some of these actions are remarkably similar to some policies championed by President Harry Truman in 1946 after World War II — the last time a national housing emergency was declared to provide affordable housing for soldiers returning back from the war. However, that was done through an act of Congress and not an executive order.
Here are some steps the government could explore through a national housing emergency declaration:
Federal Lands Release
Making federal land available for housing development is one idea the Trump administration has mentioned a few times. However, most of the federal lands available are in remote locations in the West, where large swaths of federal lands are prone to wildfires and drought conditions.
While it might help in some limited cases, it’s not a salve for the wider affordability and inventory issues plaguing the housing market, Irwin said. Why? Federal lands are usually in remote areas far from job centers — a barrier to new development with more companies requiring on-site work.
“You could build 100,000 houses there, but then how do you provide all the other amenities,” Irwin said, referring to a proposed development 45 minutes outside of Las Vegas on the Nevada-California border.
Streamlining Local Regulations
Administration officials are reportedly looking at ways to standardize local building and zoning codes, potentially paving the way for more development in areas where there’s currently a lot of red tape to build new homes.
Russell McIntyre, principal policy analyst with Cotality, explained that zoning and permitting reform happens at the local/state level, but the federal government could offer tax incentives to encourage those local entities to take a more friendly approach to zoning and permitting rules.
U.S. Rep. Mike Flood, R-Neb., noted that the federal government can do more to help address burdensome local regulations that make it more difficult and costly to build new homes.
“In this area, Mr. Trump has a huge opportunity to cut red tape,” Flood said in a news release after Bessent’s comments about a potential housing emergency declaration.
He explained there are four major regulatory issues contributing to higher building costs. These include “environmental reviews that delay projects, Davis-Bacon requirements that drive up labor costs, Section 3 requirements that make it harder to hire contractors to build homes, and ‘Build America, Buy America’ requirements that drive up material costs,” Flood said.
Tariff Exemptions for Construction Materials
The Trump administration has levied steep tariffs on dozens of countries and materials that directly impact the price of building homes. But he could make exemptions for some key items, such as lumber and steel, in an effort to bring down the cost of new homes.
“I think it would be a positive thing, but I'm not sure how much it would move the needle, given that much of the lumber we're already using in housing is coming from the U.S.,” McIntyre said.
For instance, Canadian lumber tariffs jumped to 35% up from 14.5% earlier in the year, according to the National Association of Home Builders (NAHB). And in June, President Trump hiked tariffs on steel and aluminum imports from 25% to 50% under Section 232 of the Trade Expansion Act.
The impact on new construction is being felt, with U.S. housing starts down 8.5% in August to a seasonally adjusted annual rate of 1.31 million units, according to a report from the U.S. Department of Housing and Urban Development and the U.S. Census Bureau.
Tax credits for homebuyers
The administration might explore reducing closing costs through a tax credit. A similar credit of up to $8,000 was last offered from 2008 to 2010 during the Great Recession.
But McIntyre said it’ll help a smaller number of people at the margins where closing costs would be a deal breaker. In addition to properties generally being less affordable with less inventory to go around, borrowers are being squeezed by higher inflation, mortgage rates, property taxes and an “insane rise in insurance” in recent years, McIntyre noted.
Another unintended consequence of offering buyer tax credits is inflating buyer demand. Buyers might flock to purchase a home to take advantage of a tax credit, further driving up home prices in areas where inventory is already scarce, Ernest said.
“You need to address the supply issue rather than the demand issue, in that sense,” Ernest said “Then it's a question of can you provide sort of targeted assistance to certain groups that you want to help try to afford that housing without really tipping those scales and doesn’t push up the price too much for certain housing.”
The Bottom Line
Until inventory-side issues are addressed in a meaningful, long-term way, other measures to address affordability will be a temporary Band-Aid, experts say.
With housing replacement costs soaring, too, more focus needs to be on building resilient housing that withstands more extreme weather conditions.
“We need to be investing a lot of money into research to find out how to make those materials cheaper, how to make them more resilient, how to bring the price down and incorporate those into our actual housing production,” McIntyre said. “But that’s going to take a lot of effort, a lot of money, — probably hundreds of billions of dollars — to really tackle the whole country. If you compare that to the cost of post-disaster recovery efforts, it's not that much.”
Irwin echoes this sentiment, noting that with construction labor and cost constraints squeezing more builders, the government must ensure housing quality isn’t sacrificed in the name of expediency.
“We want to make sure that whatever policies are implemented as part of this emergency don't create the incentive to create a bunch of very low quality, flimsy housing in a place that won’t last more than a few years,” Irwin said.
