Council of Economic Advisors Releases Annual Economic Report to the President, Including Recommendations for Increasing Housing Supply

By Libby O’Neill, NLIHC Senior Policy Analyst 

The Council of Economic Advisors (CEA) released its annual Economic Report to the President on April 13. The CEA must send this report to Congress within ten days of the administration submitting its new fiscal year budget; President Trump released a fiscal year (FY) 27 budget request on April 3 (see Memo, 4/6). The report includes 14 chapters covering topics of importance to the economy and the administration’s agenda. This memo focuses on Chapter 6 of the report, “Protecting and Rebuilding the American Dream of Homeownership,” which describes the housing affordability crisis mostly in terms of homeownership becoming increasingly out of reach for most Americans—with renter and multifamily housing included to a lesser extent—and the main cause of the housing affordability crisis as excessive regulation.  

The CEA is an agency within the Executive Office of the president, tasked with giving the president advice on domestic and international economic policy. The agency has a chair nominated by the president and confirmed by the Senate, one additional member economist appointed by the president, and a staff of economists.  

The housing chapter of the report highlights two “culprits” behind increasingly unattainable homeownership: two “adverse sources” of competition for buying a home, institutional investors and immigration; and a “government bureaucrat tax,” which the CEA defines as the cumulative impact of regulations, fees, mandates, and bureaucracy on the cost of construction and renovation.  

The Trump administration has repeatedly used immigrants as a scapegoat for the affordable housing crisis. High housing costs are due to a myriad of systemic drivers, including the severe shortage of affordable, accessible, and available homes for people with low incomes, and the growing gap between income and the cost of housing, particularly for those with the lowest incomes. NLIHC and the Protecting Immigrant Families Coalition (PIF) released a fact sheet explaining why immigration is not the cause of the affordable housing crisis.  

The impact of institutional single-family rental investors on the housing market has shifted since they entered the market in a meaningful way following the Great Recession. While these investors helped reduce the number of foreclosed and abandoned homes after the housing crash, this is no longer their primary function. These investors purchase homes within neighborhoods and rent them out, often outbidding other homebuyers who would live in the home. Institutional investor activity in this space is relatively low nationwide but is concentrated in certain metropolitan areas where they have an outsized impact. The administration and Congress have proposed ideas to address this issue in the housing market, but lawmakers have not yet come to an agreement on a final approach.  

A significant portion of the housing chapter of the report focuses on the impact of primarily state and local regulations, mandates, and fees on the cost of construction, framing these collectively as a “bureaucrat tax” that leads to higher housing prices. The report also calls out federal energy efficiency policies of the Biden administration, calling them “coercive” and calling on States and localities to implement best practices that would lower construction costs and lead to increased supply. It is important to note that while the policies cited in the report may add costs (upfront and/or ongoing) to housing, many achieve an important public purpose and provide long-term benefits (and sometimes even cost savings, as with energy efficiency improvements). 

Policy changes by state and local governments can both lower costs and encourage more production of new housing. Certain local zoning and land use regulations, like those encouraging more low-density, single-family housing and discouraging multifamily housing, or setting minimum lot sizes, set-back, or parking requirements, constrain housing supply and increase the cost of housing development. These policies limit housing opportunities, in particular for households with low incomes, by prohibiting or limiting the types of housing that are more likely to be affordable, including large and small multifamily housing developments. In addition to zoning and land use reforms, local governments can evaluate where processes can be streamlined to reduce delays and fees. NLIHC has endorsed legislation that encourages local governments to adopt policies that increase supply, such as the “Housing Supply Frameworks Act” (S.1299/H.R.2840; see Memo, 4/14/25). 

While zoning and land use reforms are necessary, they are insufficient to solve the affordable housing crisis. According to NLIHC’s research, there is a national shortage of over 7 million rental homes affordable and available to families with the lowest incomes. This shortage has been decades in the making, as rents continued rising faster than wages and Congress failed to invest in the programs that help communities afford the cost of building, operating, and maintaining deeply affordable homes, like public housing, project-based rental assistance, and the national Housing Trust Fund. NLIHC supports needed reforms to alleviate zoning barriers and streamline development processes, which can help bring down the cost of construction and ensure the private market can continue to serve middle-income households, but only sustained federal investments in the construction and preservation of deeply affordable housing will meet the housing needs of people with the lowest incomes.   

Read the full CEA annual report to the president here.