Will Trump presidency impact SLO County affordable housing? ‘Production could halt altogether’
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How will a second Trump term impact SLO County?
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Editor’s note: This is the second in a series of stories in the lead-up to President Donald Trump’s inauguration aimed at exploring how a second Trump administration could impact SLO County, with coverage spanning key policy areas such as immigration, tariffs, education and more.
In Cambria, housing grows about as quickly as the area’s signature pines.
In a town known for little-to-no growth over the past two decades due to a 2001 building moratorium, one project has had the OK to build for the past four years: People’s Self-Help Housing’s second affordable housing project on Schoolhouse Lane.
However, after gaining all of the necessary approvals in 2020, the project has seen no development since due to a lack of funding — and as the project heads into 2025, there’s a good chance it won’t get much help from the incoming Trump administration.
People’s Self-Help Housing president Ken Triguiero said the continued push to develop the Schoolhouse Lane property — originally acquired in 2005 — is one of the longest-running in the organization’s history.
Sitting across the street from Santa Lucia Middle School, the project is directly adjacent to the most recent People’s Self-Help Housing project in Cambria, a 24-unit multifamily complex that opened in 1997.
The incentive to build affordable housing in Cambria has never been higher, with more than 100 households currently on the waiting list for the existing Schoolhouse Lane apartments and another 187 households waiting for the yet-to-be-constructed complex, according to data provided by People’s Self-Help Housing.
But despite Cambria’s reputation as a no-growth town, it’s not the water meter restrictions or extensive approval process through the California Coastal Commission that have bogged down the project the past five years — it’s funding, Triguiero said.
“The most recent misfortune, if you will, to hit this project is the new administration coming in at the federal level,” Triguiero said.
And the project is not alone.
What has Trump said about federal housing funds?
Though the state of California spends more on housing subsidies than any other, it is still ultimately reliant on the federal government for a significant portion of its own funding.
Federal dollars make up roughly a third of the state’s 2024-25 budget, with $297.8 billion from the state and $153 billion from the federal government, according to the approved budget.
Of that $153 billion, around $115.7 billion supports health and human services such as Medi-Cal and the Department of Social Services.
Meanwhile, the 2024-25 state budget cut a total of over $1 billion from housing programs.
In California, state general fund dollars made up less than 20% of funding that supported affordable housing and homeownership attainment between 2019 and 2023, according to the California Budget and Policy Center, a nonprofit that performs government financial analysis.
That means of the $9 billion the state spent on affordable housing in the 2023-24 financial year, the state spent around $1.8 billion on affordable housing funding, while federal and private funds made up $7.1 billion.
In the 2024 campaign, former President Donald Trump himself said relatively little on the subject of California’s affordable housing expenses specifically, but has cut funding to the streams that feed into the state’s coffers before.
During his first term, the Trump administration sought to cut funding to the federal Department of Housing and Urban Development on multiple occasions, including cuts in 2017, 2018 and 2019 that reduced the HUD budget from around $60.7 billion in 2017 to $40.25 billion by 2019.
While Trump also signed bills into law during the COVID-19 pandemic that still provide some housing support — such as $25 billion for emergency rental assistance and an eviction ban — those policies have not received additional contributions since then and are likely to be one-time only.
This time through, much of Trump’s rhetoric on housing was focused on opening more federal land for housing construction, mass deportation of immigrants — whom he alleges are taking homes that American citizens should inhabit — and pressuring the independent Federal Reserve to lower interest rates.
Trump has also said he intends to raise import tariffs to offset planned corporate tax breaks, which Triguiero said may push the cost of building higher than it already is.
“Talking about tariffs, that’s just going in the wrong direction — that’s raising costs rather than reducing costs,” Triguiero said. “It really means a slowdown, probably. This is all coupled with the problem so to speak, of interest rates — we were projecting they might be going down, but now, it looks like they are not going to go down anytime soon, and so that has meant our borrowing costs are higher.”
How do federal funding cuts trickle down to the local level?
Many affordable housing projects such as the Schoolhouse Lane project rely on low-income housing tax credits, which the state housing finance authority awards to developers in rounds of applications each year.
Developers then sell those tax credits to investors to gain immediate funding for their projects, while the investors can use the credits to reduce their federal tax liability.
Triguiero said looking back at the first Trump administration may be a good way to approach the value of these tax credits going forward.
In 2017, when Trump cut corporate income taxes, the value of low income housing tax credits dropped by around 10% across the board “overnight” because the corporations that would typically have received tax breaks form buying credits no longer had the need, Trigueiro said.
That same financial trade-off is already happening in advance of the incoming administration, Triguiero said.
“As soon as the election happened, we experienced the tax credit investors really overnight anticipating that there’s probably another court corporate tax cut coming in their favor,” Triguiero said. “The value has gone down for those, so that’s going to bring in less probably than we had hoped for and expected, so I think we’re going to need to get yet another gap source of funding to complete that whole stack of capital that we need.”
While the first Trump administration made few changes to funding levels for the Community Development Block Grant and HOME Investment Partnerships Programs — the two primary HUD programs that disburse funds to local jurisdictions for the construction of affordable housing — because the administration held funding levels for these programs at the same level, those dollars have been outpaced by inflation and don’t go as far, Trigueiro said.
There’s a good chance that stagnancy in housing funding may be the status quo with the second Trump administration, which has heavily emphasized making cuts to the federal government at all levels, Triguiero said.
Jeff Eckles, CEO of the San Luis Obispo County Housing Trust Fund, said because his organization deals primarily with state funding, he’s less concerned about the incoming administration’s impact on the streams he relies on.
Funding for community development funding institutions such as the Housing Trust Fund runs through the U.S. Treasury and are most likely to be affected by the Department of Government Efficiency, a new government body proposed by and presumably to be led by Trump backers Elon Musk and Vivek Ramaswamy.
Though CDFI funding was mostly untouched in the previous Trump administration, Eckles said the proposed efficiency department is the body he’s most concerned with this time through, as it may lead to that funding becoming a privatized funding stream.
Eckles agreed with Triguiero’s assessment that low income housing tax credits’ value could decline under the next administration, but is confident that the Housing Trust Fund will be able to continue in its mission regardless of the changes.
“I’m not overly concerned about it — I think everyone is aware that housing is a critical need, so I don’t expect draconian cuts to funding for affordable housing,” Eckles said. “At the local level, we’re adaptable and nimble and resilient, and we’ll adapt to whatever changes come down, roll up our sleeves and get to work.”
Housing nonprofits expect significant funding cuts
In the Cambria project’s case, the incoming funding decisions will likely become evident over the coming years due to the town’s status as an unincorporated area.
Trigueiro said even under the best of circumstances in which the project receives all the funding it needs, it’s unlikely to start any construction until 2026 at the earliest, likely wrapping up in 2028.
Other People’s Self-Help Housing projects may see their construction timelines extend, and the nonprofit may not be able to replace the federal funding streams in some cases, limiting what new projects it can take on, he said.
Housing Authority of San Luis Obispo interim executive director Michelle Pedigo said HASLO relies heavily on federal funding, most prominently through the Housing Choice Voucher program, also known as Section 8, which is solely funded by the federal government.
“We have heard that there may be cuts to this funding under the new administration, which would significantly impact our ability to issue new vouchers in the community,” Pedigo said in an email to The Tribune. “This program is a crucial resource that helps individuals and families access standard market-rate housing with subsidized rent.”
Pedigo shared Triguiero’s concerns on the devaluation of tax credits, and said other funds that have buoyed housing nonprofits such as the pandemic-era CARES Act and Emergency Housing Vouchers have run out, meaning federal funds will be even more limited in their overall impact.
“In the best-case scenario, changes to federal funding would slow down our ability to produce affordable housing, but we would still be able to move forward,” Pedigo said in an email. “However, if federal cuts, tariffs and reductions in tax credits all occur together, there is a real possibility that production could halt altogether.”
This story was originally published January 9, 2025 at 5:00 AM.
