After the election results last week showed states turning red, with one of real estate’s very own now heading to the White House, the industry hopes to see President-elect Donald Trump make improvements. Will he be able to give it what it wants?
Congress will ultimately need to implement much of Trump’s agenda, which includes cutting corporate tax rates and renewing other aspects of the 2017 tax law that proved popular with the industry.
The wishlist of legislation is likely to be easily approved now with a Republican-controlled Congress, as the U.S. Senate flipped red, but control of the House still remains undecided.
Real Estate Hopes
Shortly after Trump secured the election, some real estate players shared hope that the returning president will be able to clinch his tax proposals, as well as make it more feasible to build by cutting regulation.
“In an era when so many industries face mounting regulations, President Trump will provide a rare breath of relief for real estate developers,” said Jared Epstein, president of the developer Aurora Capital Associates. “His focus on streamlining federal regulations will allow us to bring visions to life faster and more affordably.”
While the Biden administration has pitched restrictions on benefits for investors—which gained little traction—Epstein hopes to see the Trump presidency preserve 1031 exchanges, which allow investors to defer capital gains taxes by buying similar properties to ones they have sold.
Hoping Trump will stick to his pledge on SALT, Jeff Gural, chair of GFP Real Estate, supported President Joe Biden’s aborted campaign, but he shifted his focus to congressional races, believing that a Democrat-controlled Senate—led by Brooklyn’s Chuck Schumer—would have offered the best chance at doing away with the cap.
But Gural still thinks Trump could fill his cabinet with individuals who share industry interests, stating, “Donald is a business person. Hopefully he will surround himself with business people.”
CEO of Brown Harris Stevens, Bess Freedman, voted for Harris, but “forgetting the emotion of this, wearing a business hat,” she said that Trump’s experience in real estate could be a positive, hoping that Trump will also stand by his comments on SALT.
“I have to think something good is going to come of this,” she said.
Trump’s Plans
Trump is not known for releasing detailed plans and has yet to release one on housing or set a target for building; however, he has expressed support for building on underutilized federal land and doing away with regulations that limit construction.
The President-elect argues that the influx of migrants into the country is the reason why housing prices have spiked and has stated his plan for “mass deportations” would ease demand. Yet, economists have said that such a plan would have a limited impact on prices because new migrants often pile into homes already occupied; they do not buy houses, ultimately representing a small portion of the population.
Experts added that “mass deportations” would dry out the construction industry’s heavily Latino labor pool, which would raise costs and curb production rather than help it.
Trump’s plan for a 60 percent tariff on goods imported from China, and 10 percent on all other imports, would increase levies imposed on steel and aluminum, which raised average prices for materials by 2.4 percent and 1.6 percent, according to the U.S. International Trade Commission.
“If Trump goes forth with his economic plan, which heavily relies on tariffs, that’s going to raise the price of consumer goods considerably, and when those prices go up, that goes hand in hand with increased inflation,” said Compass’ Conlon. “And if we’re back to higher inflation, guess what? We’re back to higher mortgage rates.”
Briggs Elwell, CEO of RLTYco, a fintech commission advance startup, said the “surge in market confidence” marks a “fundamental shift in the marketplace.”
“It’s quite clear that you’re seeing all major financial markets see positivity in the election results,” he said. “Again, that doesn’t mean that socially, everything here is great, but in the real estate segment of it, it appears that the market has spoken, that they’re very confident with the decision.”
