Industry experts are keeping an eye on affordable housing, pandemic relief and other hot topics.
President Donald Trump has not conceded the race for the White House, but commercial property experts are looking ahead to 2021 and anticipating a Joe Biden administration and a divided Congress.
The scenario could be positive for commercial real estate, with increased emphasis on fighting the pandemic, boosting affordable housing, tackling infrastructure needs and possibly avoiding tax reform that could hurt investors, such as changes to 1031 exchanges and Opportunity Zones.
“(Next year) looks promising for the real estate industry,” said Ira Weinstein, managing principal & Opportunity Zones practice leader at CohnReznick.
“We can expect a measured level of stimulus that will focus on healthy buildings and short-term economic support that will buy some time among residential and commercial tenancy. Housing—and particularly affordable—has been a mainstay of the campaign platform and will be front-and-center domestic policy and that will support a major asset class with ripple effect. Wall Street seems supportive and that will mean short-term capital flow, while the focus on sustainability will bode well for the long term.”
THE PANDEMIC IMPERATIVE
Biden has shown that his priority is to get the spread of COVID-19 under control, said Laura Jackson, senior managing director in the tax advisory group of the Real Estate Solutions practice at FTI Consulting.
Laura Jackson, Senior Managing Director, FTI Consulting
“I think there’s an assumption that he’s going to take it more seriously by insisting everyone wear a mask and follow the science,” Jackson said. “The more we can create a safe environment for people to return to the office or feel comfortable with senior housing and apartment living, the better it will be for real estate. All of those things are very important, so hopefully a Biden presidency would improve the trajectory of the real estate recovery in that regard.”
Economist Hugh Kelly, curriculum chair at the Fordham Real Estate Institute, said dealing with COVID-19 is needed to improve the economy. “Our economic problem was triggered by a public health problem, remains tied to the public health problem and won’t be solved until the public health problem is solved,” Kelly said.
Meanwhile, several commercial real estate and multifamily experts say another federal stimulus bill is desperately needed to help renters and landlords impacted by the pandemic and should be passed either in the lame duck session of Congress or in early 2021.
“We think it’s critical that either unemployment or rental assistance is in the next stimulus package,” said Mike Flood, senior vice president of commercial and multifamily policy at the Mortgage Bankers Association.
“We are looking to make sure there is assistance for renters and landlords alike,” agreed Cindy Chetti, senior vice president of government affairs at the National Multifamily Housing Council, adding that eviction moratoriums are not a long-term solution.
The HEROES Act passed in May by the Democrat-controlled House of Representatives included $100 billion in emergency rental assistance and this time Republicans might approve it, noted Ken Rosen, chairman of Rosen Consulting Group and the Fisher Center for Real Estate and Urban Economics at the Haas School of Business at the University of California, Berkeley.