Presidential candidates are making their views known before the debates, which is prime time to figure out how these views could affect the real estate and property management market. While it could take time for major shake-ups in laws and regulations to really impact your bottom line, knowing about the political views of candidates gives you time to prepare.
The Republican candidate Donald Trump comes from a background with extensive real estate experience. His father, Fred Trump, handled real estate development in New York City as the firm Elizabeth Trump and Son. Donald Trump joined the company in 1968, eventually renaming it The Trump Organization in 1971. Donald Trump has many significant real estate holdings, from the Trump Tower to the Trump Hotel Las Vegas. Other candidates don't approach his real estate knowledge, but that might not necessarily be a good thing for smaller scale landlords and property managers in some cases.
Focused on Massive Properties
One of the biggest concerns when it comes to this experienced real estate mogul's policies and political views is whether he'll focus on benefiting the real estate industry as a whole or just the top end of the market. Donald Trump's real estate portfolio consists of multimillion-dollar properties, with a large focus on multi-tenant apartment buildings and commercial business property. It's possible that his views on real estate will exclude small business property owners.
Supports Changes to Rent Control
Donald Trump is known for desiring changes to rent control laws. He told Vanity Fair that "rent control is a disaster for all but the privileged minority who are protected by it ... In effect, the city created an inalienable right for five million New Yorkers—namely, low-priced housing. It sounded wonderful. The only problem was that the city had no intention of underwriting it. Instead, it forced landlords to subsidize tenants."
Due to his frustrating experiences with rent controlled buildings in New York, Donald Trump frowns upon these laws in regions such as New York City. He doesn't want to completely eliminate rent control. Instead, he feels means tests are necessary for rent-controlled apartments. Low-income renters who can't afford other apartments in the area could stay in these apartments, while those with the means to rent elsewhere should either pay market rent or move elsewhere. Changes to rent control would increase the amount of rental inventory reaching market rent rates, allowing landlords to reinvest in their business instead of losing money on maintaining buildings.
Donald Trump has billed himself with a major focus on job creation. One way that this could benefit property owners and property managers is through the tax breaks that Trump proposes. His 1-5-10-15 tax rate aims to make the tax code simpler to understand across the board, and splits the taxable income into new brackets. Those earning $30,000 or less would pay 1 percent tax; those earning between $30,000 and $100,000 would pay 5 percent; and those earning between $100,000 and $1 million would pay 10 percent. People with higher incomes would pay 15 percent.
These tax breaks could make it easier for landlords to invest in their properties income that currently goes to taxes. In addition, the proposed tax breaks would also make accounting and tax filing easier for property management companies.
There's a long time to go before the presidential race starts in earnest, but it will be interesting to keep an eye on what Donald Trump has in mind for the real estate market. It's an integral part of his business and his life, but whether he supports policies that help all real estate companies or just the ones at the top remains to be seen.
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