Developer’s Council News
Make Development Great Again?
Will the new Administration and Congress help developers? One would expect a real estate developer to institute policies and revise regulations in a development-friendly manner; but, if we learned one thing from this election, it is the predictions are flawed. Below, take a brief look at couple of President Trump’s statements to make my best guess.
At the top of President Trump’s policies is infrastructure. For Northeast Ohio real estate developers, that means access to water and sewer, transportation (and job centers), and even strong schools. Many of Trump’s statements focus on “deficit-neutral plans”, “private infrastructure investments”, and “infrastructure tax credits”. These statements imply costs will ultimately be paid by the developer, even if initially financed by the government. If government does not cover these costs, they will be passed to homebuyers, reduce land values, or absorbed by developers – likely all three.
Policies that may increase demand for homes include the proposed reduction in taxes for “working and middle-income Americans who will receive a massive tax reduction”. Demand for new housing may increase if Americans suddenly are able to afford a home, or a bigger home, and they buy into the renewed message that home ownership is the key to the American Dream.
Likewise, President Trump (and Ohio’s Republican-controlled General Assembly) are advocates of school choice. Suggested policies encourage Federal grants for states that favor private school choice, magnet schools, and charter schools. This is further emphasized for children living in poverty. School choice policies open housing stock to private school parents who are unconcerned with the public schools, subject to limitation on transportation.
Finally, Trump made clear that he is taking aim at unnecessary regulations. Specifically targeted by President Trump are the “most intrusive regulations, like the Waters of the U.S. Rule”. Developers are familiar with the Federal regulation of non-isolated wetlands. In recent years, the Army Corps of Engineers has aggressively asserted jurisdiction over wetlands, even those that arguably are under state jurisdiction, by claiming them to be waters of the U.S. Trump’s statements indicated the return to state regulation of these wetlands.
**Reprint from the HBA of Greater Cleveland Newsletter.