As Donald Trump begins his second term as President in 2025, one of the most anticipated shifts in U.S. policy is the renewed push for deregulation—especially in industries that have long faced red tape, such as housing and construction. Trump’s first term was marked by sweeping efforts to roll back government oversight in multiple sectors, and early signs in 2025 suggest that real estate development is once again a top target for reform.
For homebuilders, investors, and developers across the country, the big question is: Could deregulation under Trump 2.0 spark a boom in new construction? If so, what might that look like—and how can stakeholders prepare to capitalize on it?
Let’s take a closer look at how deregulation could reshape the construction landscape, from zoning laws and permits to federal land use and environmental compliance.
1. Zoning Reform: A Local Problem with Federal Leverage
Zoning laws—which determine what can be built and where—are traditionally set by local governments. However, in his second term, Trump has expressed interest in using federal influence to incentivize zoning reform, particularly in high-demand housing markets where affordability and supply are critical issues.
During his 2020 campaign, Trump resisted calls for federal mandates on local zoning, but by 2025, his administration appears more open to encouraging municipalities to loosen regulations through grants, funding bonuses, or housing tax incentives.
Pro-growth groups are lobbying for federal pressure to:
- Allow higher-density residential zoning near urban centers and transit hubs
- Reduce minimum lot sizes and setback requirements
- Permit more mixed-use developments
- Remove or cap costly design and aesthetic mandates
If successful, this would represent a major shift in how the federal government shapes housing supply, even without directly controlling local land-use policies.
Bottom line:
Federal incentives tied to zoning reform could unlock new construction opportunities in cities where regulatory restrictions have long suppressed housing growth.
2. Streamlining Building Permits and Approvals
One of the most consistent complaints among developers is the time and cost associated with building permits and environmental reviews. These processes can take years and add hundreds of thousands of dollars to a single project.
In his first term, Trump introduced the “One Federal Decision” rule, which aimed to consolidate the environmental review process across federal agencies and reduce approval timelines. Early in 2025, the Trump administration signaled it would revive and expand that initiative—this time with a focus on housing and commercial development, not just infrastructure.
Under proposed rules:
- Federal agencies would have tighter deadlines to review and approve projects
- Builders could submit unified applications instead of dealing with multiple agencies
- Local governments could get access to new technology to digitize and accelerate permitting processes
What it means:
If these policies gain traction, developers could see faster timelines, lower holding costs, and reduced legal uncertainty. In turn, this could lead to more speculative building and faster turnaround on major housing projects.
3. Environmental Regulations: Balancing Speed and Sustainability
Trump has never hidden his skepticism of environmental regulations that he believes “strangle business.” In his second term, he is expected to roll back additional aspects of the National Environmental Policy Act (NEPA) and potentially weaken enforcement under the Clean Water Act—both of which play a key role in real estate development.
Critics argue that these rollbacks could jeopardize environmental protections. Supporters say they’re necessary to avoid “death by a thousand cuts” when it comes to permitting and compliance. Either way, the practical effect for developers is clear: easier access to land and fewer regulatory delays.
For example, if wetlands regulations are loosened, formerly restricted land could suddenly become developable. Similarly, if environmental impact assessments are simplified or shortened, more shovel-ready projects could get off the ground quickly.
Potential risk:
While deregulation could accelerate development, it could also spark legal battles from environmental groups and local governments, potentially complicating projects or delaying construction.
4. Labor and Building Codes: The Trade-Off Between Speed and Quality
Another area where deregulation could impact new construction is through federal influence on labor rules and building codes.
In 2025, the Trump administration has floated the idea of:
- Easing Davis-Bacon Act requirements on federally funded housing projects, which mandate prevailing wages for construction workers
- Encouraging states to adopt more flexible building codes to reduce costs for builders
- Supporting more aggressive use of modular and prefabricated housing through less restrictive compliance standards
While these efforts could make construction more affordable and scalable, critics worry that relaxing codes or undercutting labor protections could lead to lower-quality builds or labor disputes.
Developers should consider:
There’s likely to be tension between affordability and quality, and real estate professionals should prepare for a market where value engineering becomes even more central to success.
5. Public Land and Federal Housing Initiatives
Trump’s administration is also expected to push for expanded use of public land for residential development, especially in high-growth areas with limited space.
Policies under review include:
- Leasing or selling federally owned land near cities for affordable housing development
- Accelerating approvals for federal land transfers to municipalities
- Supporting public-private partnerships for master-planned communities on underutilized land
This could be a game-changer for builders facing land shortages and rising acquisition costs.
Additionally, while Trump is not known for favoring large federal housing programs, he may support private-sector driven solutions that align with his deregulatory philosophy—especially if they can stimulate job creation and economic growth in construction.
What Real Estate Professionals Should Do Now
With deregulation on the horizon, real estate developers, investors, and construction firms should start preparing now to capitalize on potential changes. Here’s how:
🔹 1. Stay Informed on Local Zoning Changes
Federal pressure may lead to local reforms. Keep a close eye on city councils and planning boards in your target markets.
🔹 2. Reevaluate Development Pipelines
Projects that were once too costly or complex may now become viable under streamlined regulations.
🔹 3. Invest in Permit and Compliance Strategy
Time is money. Developers who can navigate the permitting process quickly—especially as it changes—will have a clear advantage.
🔹 4. Build Relationships with Pro-Growth Officials
Local and federal leaders who support deregulation may also support your projects. Leverage these relationships to stay ahead.
🔹 5. Prepare for Pushback
While deregulation can create opportunities, it may also spark legal challenges or community opposition. Be proactive about risk management and community engagement.
A Construction Boom on the Horizon?
Deregulation under Trump 2.0 could dramatically reshape the U.S. construction landscape. By cutting permitting delays, loosening zoning restrictions, and easing environmental compliance, the administration is setting the stage for a potential surge in new construction activity.
However, with opportunity comes complexity. Developers must balance speed with sustainability, cost with quality, and growth with responsibility. The most successful players in 2025 and beyond will be those who not only understand the new rules—but use them strategically to build smarter, faster, and better.
If Trump’s deregulatory agenda unfolds as planned, the next few years could mark a golden era for builders—one where the phrase “breaking ground” becomes a regular part of the national vocabulary again.
