With Donald Trump’s recent election victory, real estate professionals find themselves speculating on how his administration will impact the property market. Given his background in real estate and past policies, this administration could see changes benefiting developers, property investors, and homeowners. However, Trump’s vision will require congressional support, particularly for measures such as tax cuts and deregulation, which have been key parts of his agenda.

Tax Policy: 1031 Exchanges and SALT Deductions

Trump’s tax reform in 2017 included several benefits for real estate, like the preservation of the 1031 exchange, a tool that allows investors to defer capital gains taxes when they reinvest in similar properties. Many industry players anticipate that Trump will protect this provision, especially as the Biden administration previously suggested restrictions. As Jared Epstein, President of Aurora Capital Associates, noted, “In an era when so many industries face mounting regulations, President Trump will provide a rare breath of relief for real estate developers.” Epstein believes a Trump-led deregulation agenda could allow projects to proceed faster and more affordably, a sentiment echoed throughout the industry.

Trump has also shown a willingness to reconsider aspects of his past tax policies. This summer, he promised on Truth Social to reverse the $10,000 cap on state and local tax (SALT) deductions, a provision that disproportionately impacted high-tax states like New York and California. Jeff Gural, Chair of GFP Real Estate, expressed hope that Trump will follow through on his promise to lift the SALT cap, which would ease the tax burden on property owners in these areas. The repeal would likely boost home values, making high-tax states more attractive to buyers.

Deregulation: Speeding Up Development

Throughout his campaign, Trump emphasized his intention to reduce regulatory barriers, particularly in sectors bogged down by federal oversight, such as real estate. In a recent statement, Trump suggested that he would prioritize building on underutilized federal land and ease regulations that have historically hindered housing development. Carl Harris from the National Association of Home Builders said, “Now is the time to take action to address the nation’s housing shortage and let builders build.” With Trump’s potential support, developers could see fewer delays in obtaining permits and approvals, helping them meet market demands faster.

Industry veterans, including Epstein, see this as a potential game-changer. Developers could move projects forward with fewer federal requirements, reducing costs and timelines, which could lead to an increase in housing supply.

Cabinet Influence and Business-Friendly Leadership

Real estate insiders like Gural hope that Trump’s cabinet will be filled with individuals who understand the industry. Howard Lutnick, Chair of Newmark, is already heading Trump’s transition team, signaling a strong real estate presence in the administration. This familiarity with the industry could lead to policies that align with the needs of real estate developers and investors. “Donald is a business person,” Gural commented, emphasizing that industry players expect Trump to bring in leaders who prioritize business-friendly policies.

Potential Obstacles and Unions’ Concerns

Despite industry optimism, Trump may face opposition from construction unions and pro-housing groups. Vice President Kamala Harris, supported by unions like the Brotherhood of Carpenters and Joiners of America, advocated for project labor agreements on federally funded projects, a stance that protects workers’ interests. These groups worry that Trump’s administration may reverse Biden’s executive order favoring unionized labor on large-scale projects, potentially affecting labor stability.

Furthermore, while Trump has voiced support for reducing housing shortages by cutting red tape, he has yet to outline a detailed plan for affordable housing or large-scale construction. Pro-housing advocates may look elsewhere for policies that explicitly address low-cost housing initiatives and incentivize localities to reduce bureaucratic barriers for builders.

Conclusion: A Boost for Real Estate?

While Trump’s victory brings a sense of optimism among real estate professionals, the impact of his administration remains uncertain. A Trump presidency could see beneficial tax reform, fewer regulations, and policies favoring developers. However, much will depend on Congress’s willingness to back Trump’s agenda, especially regarding tax cuts and regulatory changes.

In the coming months, real estate professionals will closely monitor developments and adapt strategies based on the administration’s actions. Trump’s business background and connections with industry leaders like Lutnick suggest a likely alignment with real estate interests, but as noted by The Real Deal, “having one of real estate’s own in the White House does not mean an unchecked path forward for the industry.”