By Megan Gorman

About the author: Megan Gorman is the founding partner of Chequers Financial Management and the author of All the Presidents' Money: How the Men Who Governed America Governed Their Money .

For a guy who grew up in a log cabin, Abraham Lincoln was pretty savvy about real estate.

He arrived in Springfield in 1837 with nothing but a simple saddlebag. Yet by 1844 he had accrued enough money to make an offer of $1,500 on a Greek Revival-style home on the corner of Eighth and Jackson -- one of the nicest homes in town. Lincoln had $1,200 in cash plus a lot valued at $300. The deal was made, and the Lincolns settled in quite nicely. It helped that his wife's father paid them a small allowance. By the time Lincoln headed to Washington, D.C., in 1861, he had the house valued for insurance at $3,000 and was able to rent it out for $350 a year.

Lincoln was just one of many presidents who loved real estate. During his lifetime, George Washington was one of the largest landholders in the country with over 70,000 acres. And some presidents are ubiquitous when it comes to their homes. Who would Thomas Jefferson be without Monticello? Or Theodore Roosevelt without Sagamore Hill? Or even JFK with Hyannis Port and LBJ and his ranch? These places take on mythical qualities within each of the presidents' legacies.

That is why it's ironic that real estate magnate President Donald Trump is presiding over an era defined for many by a housing crisis. Now that Trump is back in office, he needs to quickly consider his legacy, and his passion for real estate, considering his aggressive legislative agenda.

Homeownership has long been Americans' path to financial stability. Throughout Jefferson's life, he was a proponent of property ownership with the rationale that it was essential for good citizenship. Lincoln built off Jefferson's ideas in the Homestead Act of 1862 that allowed any adult to claim 160 acres of surveyed government land, provided they lived on and improved it. For Lincoln, it was akin to giving others the chance to reach the American financial dream like he had. Franklin D. Roosevelt took the project of American homeownership further in the GI Bill by giving Americans the ability to buy homes with low interest rates (albeit indirectly discriminating against Black Americans who fought in World War II). Americans took advantage of these plans and built wealth.

But the days of Jefferson, Lincoln, and FDR are now long gone. Homeownership took a dark turn in the early 2000s. Many Americans still feel the aftereffects of the 2008-2009 financial crisis and the recession that ensued. Unlike the dot com bust in the early 2000s that impacted Americans' investment accounts, the 2008 crisis was a double wallop. It decimated the value of both their 401(k)s and their homes.

The 2008 crisis created another chilling effect: Homebuilders stopped building. They didn't want to get overextended like they had been going into the crisis. The result was a decade of being short on average annually of 500,000 homes. By the time Trump left office in 2020, the National Association of Realtors estimated we were 5.5 million housing units short.

Now, with Trump back in office, the nation is still at least 2.5-4 million housing units short. But all isn't lost. If Trump really wants to create a new golden age, as he has often said, shouldn't his legacy be in real estate? This is a man whose extensive real estate portfolio includes golf clubs, skyscrapers, and other properties all around the world. He could add millions of houses for Americans to his real estate reputation.

Debate is just beginning on how to extend the Tax Cuts and Jobs Act of 2017, the tax law passed in Trump's first term. Many of its provisions will expire at the end of the year. He has made it clear that this tax law is a priority, and its renewal gives him an opportunity to think differently about the housing markets. The years since its passage in his first presidency have been meager ones for advancing the American dream. A better version of the tax law could change that.

Recent studies have found that the benefits of the TCJA didn't trickle down to the average American. Rather, the tax law's upsides were skewed in favor of corporations and wealthy individuals in red states. A full extension would cost some $4.5 trillion over 10 years, and congressional Republicans have indicated at least some of that will be added to the deficit.

Trump has been given a gift rarely extended to second-term presidents in the form of majority in both houses of Congress. Instead of borrowing to fund the same tax cuts, he should adopt a realistic plan to help Americans get into homes. The quickest way to help Americans is to work within the tax code.

Trump is famous for his branding, so why not slap his name on a housing policy idea that comes from an unlikely place? He should look to the housing tax credit program as proposed by Vice President Kamala Harris in the 2024 campaign (which was an expansion of an idea from President Joe Biden).

The Harris credit was good in concept. First time home buyers would qualify for a $25,000 credit that could be spread over four years. But in tax, the devil is in the details. Filling the housing gap by putting 2.5 million Americans into new homes would cost at least $62 billion -- not a reasonable proposal given we have over 45 million households who rent in the United States.

But this is where Trump can make his mark by reworking the Harris credit. First, he needs to narrow the group of potential home buyers. As it stands, the Harris plan is too broad, because it relies on the Department of Housing and Urban Development's definition of a first time home-buyer. As unbelievable as this sounds, HUD defines a first-time home buyer as an individual or their spouse who has had no ownership in a principal residence during a three-year period. In other words, "first-time" buyers could have bought and sold multiple times and still be eligible. Clearly, the credit needs tighter parameters to limit those who would qualify.

Changes to the tax plan need be bolstered by real generational wealth building. Financial literacy is the key. Participants in the new homebuying program could be required to take a financial literacy program to work on homeownership skills, from budgeting to insurance to taxes. While this seems basic, keep in mind that a recent Tax Foundation poll found 64% of Americans surveyed didn't know which was more valuable, a tax credit or tax deduction. If we are going to give them a tax credit, they better know how to use it. (The answer: a tax credit is worth more. A $25,000 tax credit would generally reduce your taxes by $25,000, while a $25,000 deduction would save someone in the 22% tax bracket $5,500.)

Trump needs to find a way to pay for it. Fortunately, the House Budget Committee has plenty of suggestions for finding the money with several revenue proposals from endowment tax expansion to eliminating nonprofit status for hospitals that could easily help pay for this.

And for Trump? Well, he could create a housing incentive that changes wealth building in America for generations. Like Lincoln, he may find it was one of the most important accomplishments in helping lift others up to achieve the American dream.

After all, don't we all deserve our own little private Mar-a-Lago?

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March 21, 2025 13:29 ET (17:29 GMT)

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