US treasury secretary Scott Bessent has indicated that US president Donald Trump’s administration may declare a national housing emergency in the next few weeks. It could give the federal government broad powers to bypass normal state, county and municipal government roles to intervene more directly in the housing market. Trump has previously discussed opening up federal land for residential construction.
The US housing affordability crisis is well established. Harvard University’s Joint Center for Housing Studies (JCHS), recently reported that home prices are up 60% since 2019 and the median existing single-family home price “is a shocking five times the median household income”.
JCHS also found rising household costs partially explained by steep increases in insurance premiums, which jumped 57% from 2019 to 2024, driven by climate risk, a factor we have warned of. Meanwhile, mortgage rates remain stubbornly high, propelled by the sharp rise in 30-year US bond yields.
Potential effects on commercial real estate companies
As fewer households have been able to become homeowners, the renter population has grown, jumping by 848,000 in 2024. This has created a boom in build-to-rent housing – in 2024, multifamily developers completed 608,000 new units, the most in nearly 40years.
Industry bodies and experts have generally welcomed an emergency declaration. Shannon McGahn, executive VP and chief advocacy officer at the National Association of Realtors, said: “The administration’s consideration of a housing emergency underscores the urgency we’ve long raised – supply constraints are the greatest obstacle to affordability, with the nation short 4.7m homes. Bold, coordinated action is needed now.”
But commercial real estate companies could be affected in complex ways. If housing solutions include regulatory or financial incentives to increase supply aggressively, commercial real estate companies could see changes in zoning, land use and redevelopment priorities, such as those proposed by Zohran Mamdani, the favourite to be the next mayor of NYC. But they may also see rent controls, with the kind of unintended consequences seen elsewhere.
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