Trump signed the executive orders on Friday in Washington, as the administration sought to put more policy emphasis on home ownership ahead of the November election for control of the House and Senate.
The Associated Press report said the first order targets federal housing regulatory burdens, including steps aimed at reducing permitting delays and certain regulatory requirements that the White House argues have raised the cost of building new homes. The second order focuses on mortgage-related regulation, with directives intended to make it easier for smaller community banks to provide home loans and, in the administration’s view, to increase competition in mortgage lending.
In the first order, federal agencies would create incentives for state and local governments to speed up permitting, including by curtailing what the report described as “green” building codes, reducing design and building mandates, and making it easier to deploy innovative construction methods. The order also directs the Environmental Protection Agency and the secretary of the Army to review and update stormwater, wetlands and other water-related permitting requirements with the stated goal of reducing costs and improving insurers’ ability to insure homes.
The report said additional federal agencies—including the departments of Commerce, Housing and Urban Development and Transportation, along with the Federal Housing Finance Agency—were instructed to eliminate regulations and update programs the administration says are reducing residential development. It also said the order would seek to eliminate environmental and energy efficiency regulations that could increase costs and restrict home construction, while leaving zoning codes to states and localities.
White House officials told AP they expected those steps to reduce burdens on housing construction, and they cited a specific estimate: they said Biden-era energy efficiency mandates in HUD and Agriculture departments’ guidelines could add up to $9,000 to housing construction costs. The officials requested anonymity to describe details of the orders before signing, according to AP, and they also said other federal regulations would add even more for participants.
The first executive order also calls for the Advisory Council on Historic Preservation to simplify its guidance for historic reviews, and it directs the federal government to seek alignment between the New Markets Tax Credit program and the Opportunity Zone tax breaks created during Trump’s first term. AP reported that the administration’s approach does not seek to change state and local zoning codes, reflecting what it described as a desire to preserve suburban housing rather than increase housing density.
The second order, AP reported, would streamline the mortgage process. It would direct the Consumer Financial Protection Bureau to change mortgage guidelines so smaller banks could engage in more lending, and it would update requirements under the Home Mortgage Disclosure Act in an effort to lessen regulatory burdens related to obtaining a mortgage.
The White House’s theory, AP said, is that reducing mortgage-related regulatory burdens would increase the number of institutions competing to provide home loans, which it argues would reduce the cost of borrowing for buyers while preserving what it characterized as the safety and stability of the mortgage market. The report said the administration expects buyers could see effects from the mortgage-regulation changes in a matter of months.
AP also tied the executive orders to the political context around housing affordability. The report said high home prices have emerged as a key issue for voters under age 40 ahead of the midterms, and it noted that the median price of an existing home sold in February was $398,000, according to the National Association of Realtors. It also said the average 30-year mortgage rate in February was 6.05%, down from 6.84% a year earlier, according to the Realtors’ sales data.
On Thursday, AP reported that the Senate passed a broad bipartisan housing bill that would adjust policies aimed at increasing construction and limiting institutional ownership of home development, while the House’s path for the measure remained uncertain. The White House said in a March 2 statement that it supported passage of the measure.
The report said Trump has primarily pursued home affordability by directing the two government-controlled mortgage companies, Fannie Mae and Freddie Mac, to purchase $200 billion in mortgage bonds. It also said Trump has called for limiting the ability of financial institutions to buy homes and for caps on credit-card interest rates, while previously arguing against dramatically increasing construction on the grounds that it could bring down prices and the net worth of existing owners.
In January, Trump told his Cabinet meeting, “People that own their homes, we’re going to keep them wealthy,” adding, “We’re going to keep those prices up. We’re not going to destroy the value of their homes so that somebody that didn’t work very hard can buy a home.”