A new administration means a new federal policy landscape for the commercial real estate industry to navigate.
President-elect Donald Trump‘s executive orders and legislative agenda will have major implications for real estate on issues from housing policy to tax rates to energy regulations. And industry lobbyists are gearing up to push for their priorities.
Real Estate Roundtable CEO Jeff DeBoer spoke with Bisnow about the top priorities for his organization — which represents the interests of the commercial real estate industry — as the new administration comes into power.
Bisnow/Jon Banister
Real Estate Roundtable CEO Jeff DeBoer at a Georgetown University event in 2020
“Anytime that there’s a turning of the page, there’s an opportunity to emphasize new issues, or to bring priority to older issues that maybe have been pushed out by previous leaders,” DeBoer said.
One new issue the Real Estate Roundtable will be advocating for is the federal government creating an interagency task force to focus on housing supply and affordability.
In addition to housing, the organization’s top areas of priority heading into 2025 include taxation, capital markets and energy, DeBoer said.
Housing
Housing supply and affordability has become a pressing issue for many Americans. A Pew Research survey published in September found that 69% of Americans are “very concerned” about the price of housing, an 8% jump from a year earlier.
Many macroeconomic factors play into the availability and cost of housing, but DeBoer offered several actions that the federal government could use to stimulate the market.
He said a federal incentive to turn office buildings into housing could help make a dent in supply in some areas of the country and could be modeled after the Low Income Housing Tax Credit or federal historic preservation credit.
“Many of these buildings are simply obsolete, and they should be demolished in some cases, or they should be converted to a new use, and not necessarily just housing, but certainly, there’s a lot of buildings that could be converted to housing,” he said. “I’m not naive enough to say that this is the silver bullet for housing, but at the margin, it would be helpful, particularly in urban areas.”
Trump’s tariff proposals — a 10% to 20% tariff on all imports, with higher tariffs for products coming out of China and Mexico — could increase the cost of housing, and DeBoer said the Real Estate Roundtable plans to make that case to the administration.
DeBoer pointed to critical building materials like lumber, steel and concrete traditionally sourced offshore.
“By putting tariffs on housing materials, you will be indirectly increasing the cost of housing and making it more difficult to solve this housing crisis,” he said. “So we intend to provide comments and give voice to that point of view.”
Taxation
Taxes will be one of the first things the Real Estate Roundtable will look to prioritize during Trump’s first 100 days in office.
“The entire tax debate is something that we intend to be extremely active in,” DeBoer said.
He said the existing law that applies to real estate is largely positive, but he wants to continue working on tax law to ensure tax rules are “fair, sensible” and “economically based.”
He also said the organization will focus on ensuring foreign investment isn’t discouraged through tax policies.
“We don’t want to see any restrictions put on foreign capital investment through the tax laws,” he said.
Capital Markets
Capital flows into real estate have been stalled for over a year, with high interest rates and the shifting office market landscape keeping investors on the sidelines.
DeBoer is encouraged by what he views as the capital markets opening up, given that interest rates are falling and the bid-ask spread for commercial real estate deals is narrowing.
The Federal Reserve has cut rates by 75 basis points since October, and DeBoer said the continuation of that trend will help even more.
But there are some things the federal government can do to incentivize money to flow into the market.
One is limiting additional taxes on foreign investment. He also suggested the federal government could incentivize residential construction financing from banks and other domestic sources, which he said have “long been reducing their allocation” to such projects.
Energy
DeBoer said the issue of energy capacity and access will be “very important” to the Real Estate Roundtable’s agenda.
The data center sector has put a strain on the power grid over the last two years as the artificial intelligence boom is dramatically increasing its energy consumption: A report from investment bank TD Cowen in May found that data centers’ share of U.S. energy consumption is on pace to quadruple from 2018 to 2028.
This has created a power shortage that impacts every real estate sector that requires power to function and puts increased pressure on data center developers trying to keep up with demand. Meanwhile, emerging sectors like automated warehouses are requiring more power to function, putting more strain on the system.
The Real Estate Roundtable is advocating for Congress to pass the Energy Permitting Reform Act, which is in part intended to remove barriers for building new data centers.
“Data centers, AI, and electric vehicles are all demanding more power,” the Roundtable said in a blog post last month, noting “current infrastructure is not equipped to handle it.”