It’s been called a “$350 billion wrecking ball” to national education and affordability—a “nightmare scenario for clean energy.”
The official FY 2026 discretionary budget proposal was issued on May 2. The House passed the FY 2026 budget on May 22 by a very slim margin: 215-214. Trump’s “Big Beautiful Bill” prioritizes national defense and tax cuts over climate, housing, education, and social programs.
The top 5 percent of tax payers will enjoy $1.5 trillion in tax breaks—working class households will pick up the tab. “Elite universities” with large international student bodies will take a hit.
Now the budget has to be approved in the Senate; the vote will take place in late June. What are the housing, climate, and education implications of Trump’s FY 2026 budget?
Climate
Residual clean energy tax credits from the 2022 Inflation Reduction Act (IRA) will be eliminated, which the Center for American Progress said threatens over $500 billion in clean energy investments. This could result in the loss of 686,000 jobs if the budget gets approved.
Environmental Protection Agency (EPA) director Lee Zeldin said his agency “expects to have employment levels near those seen when President Ronald Reagan occupied the White House.” This means the EPA’s budget would be cut by 65 percent—its 15,130-person workforce would shrink to 5,300 employees.
Zeldin wants to terminate Energy Star, a program passed in 1992 as part of the bipartisan Clean Air Act that’s staved off approximately 4 billion metric tons of climate pollution. He says this will save taxpayers $300 billion. This number pales in comparison to how much Energy Star has cumulatively saved families and businesses: $500 billion in energy costs since 1992.
The EPA’s equity initiatives would be virtually eliminated if the budget gets passed, like campaigns to dismantle freeways that run through Black neighborhoods. Asthma rates would skyrocket, Center for American Progress said.
Climate research grants for the U.S. Department of Agriculture (USDA) and National Oceanic and Atmospheric Administration (NOAA) will be slashed. This will shortchange scientists and academics advancing environmental resiliency efforts, like the transition from animal agriculture and fossil fuels to clean energy.
Housing
Fair Housing Grants could be slashed as part of Executive Order 14151, or “Ending Radical and Wasteful Government DEI Programs and Preferencing.” The White House said Fair Housing Grants are at odds with the Trump administration’s agenda because they “advocate against single family neighborhoods and promote radical equity policies.”
Renters who depend on Section 8 assistance will be directly impacted by this bill. More than $700 million in rent subsidies will be lost. The bill could resuscitate the Opportunity Zone program, first launched in 2017 to help predominantly distressed rural areas, dormant under the Biden administration.
This is all happening while Housing & Urban Development (HUD) secretary Scott Turner tries to sell off his agency’s headquarters, and HUD staffers brace for widespread layoffs.
Antonio Gaines, president of HUD Council 222 of the American Federation of Government Employees, told Bloomberg Law that employees tasked with enforcing civil rights laws, compiling housing market data, affordable housing construction, and post-disaster relief will bear the brunt of the downsizing.
The HOME Investment Partnerships Program would lose 70 percent of its funding, potentially costing the housing market thousands of affordable homes. Homeless shelters would lose support.
As per the budgetary proposal, Pathways to Removing Obstacles (PRO) Housing grants will be cut, as will Community Development Block Grants, Homeless Assistance Program Consolidations, Native American Programs and Native Hawaiian Housing Block Grants, Rental Assistance Grants, and Rural Development Programs.
The plan for downsizing HUD was outlined several months ago in the Heritage Foundation’s Mandate for Leadership: The Conservative Promise, a 922-page document otherwise known as Project 2025. Now it seems Project 2025 is becoming reality.
Education
Universities with large endowments and international student bodies are being targeted in the FY 2026 budget. And if the White House deems certain universities and nonprofits “terrorist supporting organizations,” employees would no longer be eligible for Public Service Loan Forgiveness, among other funding sources.
What constitutes a “terrorist supporting organization” is ill-defined, but this provision will surely impact universities with students and faculty who support Palestine, among other social justice causes like Black Lives Matter.
The Endowment Tax budget proposal would have significant ramifications for nonprofits and universities. The excise tax levied on certain private university endowment profits will rise from 1.4 percent to 21 percent, if the FY 2026 budget is approved. This could impact how many international students get accepted into U.S. universities, among other ancillary outcomes.
International students on temporary student visas would be excluded in the student count for “tier determination,” meaning that universities with more international students will be taxed almost double what they already pay. This will have huge implications for university investment strategies and budgets, Anna Duggan of TIFF Investment Management precluded.
The University of Pennsylvania’s student body, for instance, is 30 percent international. Its tier determination would go from 7 percent to 14 percent. Harvard University’s student body is 25 percent international. Harvard GSD dean Sarah Whiting recently joined Harvard president Alan Garber in condemning the Trump administration’s attacks on international students.
Whiting affirmed on May 23 the “immense value our international students bring to the GSD community.” She said: “The GSD is one of the most international schools at Harvard.”
“Our international makeup goes back to the founding of the GSD,” Whiting said. “It is part of our DNA—our student body, our faculty, our staff, and the discipline and practice of design all thrive on this internationalism. The extraordinary breadth of experience and perspectives that the international members of our community provide is essential to who we are.”
Separate but related, changes to Pell eligibility will make it much harder for students to take out loans, particularly first generation college students, and schools will have much less support for modernizing their facilities.
Nonprofits
AN reported the architecture nonprofits that will lose funding pending the FY 2026 budget’s passage after its issuance on May 2.
The Architectural League of New York, The Cultural Landscape Foundation (TCLF), Center for Architecture, Open House New York, Urban Pedagogy (CUP), Chicago Architecture Center, Open House Chicago, Design Futures Forum, Open Architecture Collaborative, Community Design Collaborative, Institute for Public Architecture (IPA), Tiny WPA, and others will lose support.
The National Endowment for the Humanities (NEH), Corporation for Public Broadcasting, 400 Years of African American History Commission, and other groups were also listed as entities the Trump administration seeks to defund in its 2026 budget proposal.
Mellon Foundation has since released $15 million in emergency funds to the Federation of State Humanities Councils to help entities affected by NEH cuts.
Email [email protected] to tell us how your organization will be impacted.
→ Continue reading at The Architect's Newspaper
