Trump policies offer mixed messages on affordable housing

July 31, 2025
By Jennifer Smith

The largest federal program subsidizing affordable housing construction got a major boost in the Trump administration’s new tax bill, a bipartisan win that drew cheers from affordable housing advocates and developers alike. But Massachusetts housing advocates decried what they said is a split-brain approach from the administration, as expansion of the Low-Income Housing Tax Credit came alongside Trump’s proposal to reduce funding for rental assistance programs like Section 8, which help cover housing costs for low-income tenants.  

It’s difficult logic to square, said Matt Noyes, director of state and federal advocacy for the Citizens’ Housing and Planning Association. “The two sides are not rowing in the same direction, to say the least,” Noyes said of the dual policy moves.   

Noyes said affordable housing depends on favorable zoning, “capital dollars to have shovels going in [the ground] and building frames going up, and operating dollars for rental assistance programs.” He said Trump is leaving the last part by the wayside.  

“There is just no way to subsidize housing development processes enough” to be affordable to the lowest income residents, he said, “without affordable rental assistance.” 

The tax incentive gives investors a stream of tax credits in exchange for providing funds for low-income housing projects, which can be for-profit or nonprofit developments. The projects must include a certain proportion of low-income housing units, preserved for at least three decades.  

Signed into law by President Trump on July 4, the federal tax bill provides the largest permanent increase to the 1986 tax program in decades. Beginning in 2026, annual tax credit allocations will increase by 12 percent, and the threshold for using tax-exempt bonds to finance projects has been lowered from 50 percent to 25 percent.

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