Shutdown Squeezes Key Housing Programs as Affordability Dominates Recent Elections

What Happened: It's typical in US elections for voter perceptions of the economy to shape outcomes, but Americans' views of the economy have experienced a sustained negative shift since the pandemic.

According to Pew Research polling, less than one-third of Americans have viewed economic conditions favorably since 2021. Economic pessimism dominated voter behavior in both the 2024 and 2025 elections.

In surveys conducted before elections in both years, negative economic sentiment was driven by anxieties over the cost of goods and housing affordability, outpacing concerns about energy prices and even job availability.

Why It Matters: This year's election additionally took place on the backdrop of a US government shutdown that has now extended into a second month.

While the fate of SNAP and ACA funding has dominated recent discussions around the shutdown, housing affordability and the cost of living have emerged as the most politically salient economic pain points for many Americans. 

Housing policy observers largely view President Trump's One Big Beautiful Bill Act (OBBBA), signed into law in July, as a step in the right direction on tackling the affordability crisis. However, the ongoing budget impasse has left the fate of key federal housing programs and other legislative initiatives in limbo, and the impact extends beyond politics.

In recent weeks, the US Department of Housing and Urban Development (HUD) has halted most non-essential operations and ranks among the agencies with the highest shares of furloughed employees, at 71% as of mid-October estimates.

Previously appropriated funds have allowed public housing authorities to draw on pre-shutdown allocations, while existing Housing Choice Voucher payments are being honored for now. HUD has indicated that they can fund Operating Fund payments through December; however, no new housing choice vouchers are being issued, and expiring rental assistance contracts are at risk of not being renewed.

Administrative processing has also been placed on hold, stalling housing development activity nationally. Construction permits are stuck in review limbo while new grants and insurance applications are on hold. Maintenance requests can’t be fulfilled and HUD has let go of its entire staff of building inspectors, leaving a hole in safety oversight for subsidized housing.

Elsewhere, FHA multifamily loan processing has slowed, and no applications are being accepted during the shutdown. The Small Business Administration (SBA) has halted new loan guarantees, while the National Flood Insurance Program is unable to issue new policies.

Meanwhile, low-income households relying on federal rental assistance could see aid run dry within weeks if no agreement is reached, while the USDA’s rural home loan program is also on pause.

Consequences Have Elections

Voters of all political stripes are signaling that affordability is the common thorn scratching at America's side, and the ongoing shutdown increases the risk of a cascading hit to housing security and new development.

Congress should —and will —continue to debate the future of HUD funding and other market-oriented solutions to the affordability crisis. But the prolonged budget fight is beginning to squeeze vulnerable groups and threatens to disrupt housing sector development, which most agree is core to any policy solution on affordability.

Builders have signaled for several months that they are struggling with construction cost constraints that have cut into margins and timelines. Permitting delays due to the shutdown have only added to this with developers absorbing increasing costs.

Despite a largely robust post-pandemic US economy, housing affordability and the rising cost of living continue to stand out and will likely remain top of mind for voters until a clearer policy response takes shape.