The future outlook for multifamily depends heavily on the policies the Trump administration adopts and how far-reaching they are, according to a new report on “the elephant in the room” for the year ahead by Yardi Matrix.

The report noted potential positives like the fact that federal rent controls are off the table – though states could implement them. Regulation of multifamily fee management is likely to fall by the wayside and policies “that stymie development” will probably be loosened or not enforced. Funding of affordable housing programs like opportunity zones and the Low-Income Housing Tax credit is likely to remain or be expanded, and some federal land could be opened for housing construction.

On the other hand, the report warned that Trump’s plan to raise tariffs on foreign goods could drive up inflation and increase the cost of building materials – factors it said could hinder development and invite retaliation by the countries targeted. Rising costs could motivate the Fed not to cut interest rates “which are such a key hurdle to CRE transactions.”