With a new administration in place and critical funding decisions on the table, property managers must stay ahead of federal policies that directly impact the rental housing industry. Let’s break down what’s happening and what it means for property management teams.
A Review of Federal Housing Policies
HUD Funding & Rental Assistance: What’s at Stake?
The federal government is reevaluating funding for key housing programs, including the Section 8 Housing Choice Voucher (HCV) program. The industry was relieved to see the administration recognize the importance of rental assistance, particularly after an initial funding freeze, but the conversation is far from over.
Why This Matters for Property Managers:
More funding = more residents with stable rental assistance
A well-funded HUD means better support for affordable housing providers
Cuts to HUD could impact payments, administrative processes, and resident retention
The Tax Policy Shakeup: How It Could Impact Property Owners
With the 2017 Tax Cuts and Jobs Act (TCJA) set to expire in 2025, rental property owners and operators could face major tax increases.
Three Key Tax Issues to Watch:
The 20% Qualified Business Income Deduction (Section 199A): If this expires, pass-through entities like LLCs and partnerships will see a tax increase, making it more expensive to operate rental housing.
The Low-Income Housing Tax Credit (LIHTC): This program has built or preserved 4 million affordable units, but advocates are pushing for an expansion to meet demand.
State & Local Tax (SALT) Deductions: If eliminated, property taxes (already making up 40% of operating expenses) will hit property owners.
Rent Costs & Supply Shortages: What’s Next?
After years of rising rents, the market is starting to stabilize, thanks in part to record levels of new apartment construction in 2024. However, 2026 could bring another supply shortage as high interest rates and declining building permits slow down development.
The Big Picture:
According to the National Apartment Association (NAA),
Multifamily building permits fell 23% in October 2024
Housing starts were down 29%
The U.S. needs to build 266,000 apartments per year to meet demand
How This Affects Property Managers:
Short-term: Rent growth may slow in some markets as new supply hits.
Long-term: If construction slows, expect rising demand and rent pressures in 2026.
Rent Control & Zoning Reform: The Policy Battle
States and cities are debating rent control laws and zoning changes that will impact housing supply. While rent control policies can limit property managers’ ability to adjust pricing based on market conditions, zoning reform is a step in the right direction to encourage more housing development.
The Eviction Notice Debate: Federal vs. State Rules
A key issue still being debated is whether a federal 30-day eviction notice requirement—originally a temporary COVID-era policy—should remain in place for properties with federal backing. Property managers should be aware of potential federal eviction policy changes and how they might impact lease enforcement.
Final Thoughts: What Property Managers Should Do Now
Federal policies shape the rental housing market, and 2025 is set to be a pivotal year. Property managers can take action by keeping up with legislative changes and industry advocacy efforts and preparing for potential shifts in rental demand, operating costs, and tax obligations.
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