Nowak Metro Finance Lab

Federal retrenchment is triggering fiscal, economic, and structural shocks nationwide, forcing local and state leaders to navigate cascading impacts and lead regional responses as federal support pulls back.

The United States is undergoing a rapid, uncoordinated defederalization, where responsibilities traditionally held by the federal government are being shifted to states, localities, and other sectors without a clear plan or adequate support.

As federal funding shifts from investment to cuts, local governments must act now. Conducting “stress tests” will help assess risks, engage stakeholders, and develop response plans. Proactive planning ensures communities can adapt and protect essential services amid fiscal uncertainty.

The National Housing Crisis Task Force has released tools to help communities tackle the housing crisis. The State and Local Housing Action Plan highlights innovative strategies in land use, capital, construction, regulation, and governance. With reduced federal support, state and local leaders can use these tools to boost housing production and affordability. Initial tools focus on zoning reforms, tax incentives, and modular construction.