President Trump dropped his proposed budget for 2021. The key word here is proposed. The budget must pass congress before anything is put into motion but if this budget were to begin as is, the Department of Housing and Urban Development, colloquially known as HUD, would see a drastic cut to it’s funding to the tune of 15.2% or $8.6 billion.
This is a bit worrisome since housing in urban centers has become increasingly unaffordable for the lowest income families. But it is consistent with Trump’s beliefs that real estate is best left to the private sector and that people should not depend on government assistance for long-term living situations. Dr. Ben Carson, who runs HUD, echoed this sentiment in a statement saying, “We must remember, compassion is not always how many people we can get on a government program, but rather how many people we can help graduate out of a program and into financial independence. The road to self-sufficiency is one that is sure to improve the lives of all Americans.”
In other words: We want to wean people off this program anyway and if fewer people can get in, that also accomplishes that goal.
Well…..we could let economists fight this out to the death and we could wax political about it too but we refrain. Instead we point out the obvious: the private sector will be increasingly rewarded for investing in housing for all demographics, rich and poor. This government dose not want to pervert market forces by lifting up the lowest socioeconomic classes. It will be up to us investors to take it into our own hands. Let’s please agree to do so responsibly.