6 ways elections can impact real estate
“You may not care about politics, but politics cares about you,” goes an old saying. Even if the two candidates running for president aren’t talking about real estate, you can bet that actions they take when they get the job will affect the industry you work in. Real estate is such an important part of the American economy that it is nearly impossible for politicians to ignore it.
It was a real estate crisis, after all, that provoked the Great Recession eight years ago. Different politicians have very different interpretations of what mistakes led to the subprime mortgage meltdown. Whoever is in power in Washington D.C. could hold huge sway over what types of regulations will be put in place to try to prevent another mortgage crisis and it will likely affect your business, for better or worse.
Building homes is always going to be an environmentally-sensitive subject. Of course, leaders in Washington D.C. have different opinions about where to draw the line on what can and can’t be built in certain areas. Some in real estate are frustrated by regulations that make building harder, while others see laws that protect the natural environment in their area as a major selling point for potential homebuyers who want to be close to pristine nature.
President Dwight Eisenhower transformed our transportation system with the interstate highway system in the 1950’s. Since then, every president has had the responsibility of keeping America moving by making sure we are making the investments necessary to maintain the massive infrastructure system that residential communities depend on. Increasingly, the federal government has been trying to encourage cities to invest in public transportation. The more cities invest in public transit, the more likely that residential development in major metro areas will become denser and more concentrated in the urban core.
We can’t talk about government without mentioning taxes. Historically, the tax issues that are most relevant in real estate are local property taxes and the various state and federal policies that allow homeowners to deduct a variety of home-related costs from their tax bill, such as interest on their mortgage. And of course, taxes that don’t relate specifically to real estate, such as the income tax, still greatly affect real estate! It might mean less money in customers’ pockets or it might help fund some critical services that improve the local economy or real estate industry.
The federal government runs a number of programs to provide housing to low-income people. The most notable program is Section 8 housing vouchers, in which the federal government pays for a portion of a person’s rent. Such programs not only help low-income tenants but are also a crucial revenue stream for many property owners who rent apartments to Section 8 tenants. There are of course different opinions about how much the federal government should be spending on such programs and who should qualify for assistance.
The arrival or departure of a major government employer can have a major impact on a local economy and the local real estate market. The closure of a military base, for instance, can be devastating for local business. In addition, some private companies are heavily dependent on federal contracts. The next president could very well determine whether the company in your area gets more or less money than in past years.