Concerns about tariffs, immigration crackdown roil sector

Nov 25, 2024, 11:35 AM

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• Staff

Developers and landlords were jubilant when Donald Trump won his return to the White House. But property stocks didn’t react the same way.

Stocks in the sector fell 2.6 percent the day after the election, Bloomberg reported. Property stocks were the worst performing sector in the S&P 500 that day. Notable falls included a 3.8 percent drop for D.R. Horton shares and a 4 percent decline for CBRE Group.

Even though the stock market as a whole initially surged after Trump’s victory, the malaise in real estate stocks has lingered, as an index of homebuilders’ shares remains down 3 percent since Election Day. The S&P 500 index tracking real estate stocks closed above the Election Day price on Friday for only the second time since November 5.

Real estate investors are concerned about the potential effects of Trump’s promised tariffs on home sales and the office market, and about a crackdown on illegal immigration impacting the construction industry’s already-struggling workforce.

“If he manages to get through the policies that he’s proposing, that will be really bad news,” American Enterprise Institute economist Desmond Lachman said.

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But the industry itself doesn’t necessarily feel the same level of concern as its investors. Homebuilder sentiment is on the rise as the sales outlook soars along with hopes of deregulation.

Developers are also hoping the Trump administration will institute tax cuts that will benefit the industry.

Even though Trump is two months from taking office, his election is already putting pressure on real estate’s most critical financial metrics. Economists, for instance, are raising near-term forecasts on mortgage rates as Trump’s tariff proposals may increase inflation as costs are passed on to consumers.

Proposed tax cuts could also lower fiscal revenue and raise the national debt, according to economists, which would lead to higher long-term interest rates.

—Holden Walter-Warner

First move will be passing rental-broker bill Nov. 13

Nov 8, 2024, 7:00 AM

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• Kathryn Brenzel

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Eight years ago, Donald Trump’s election enraged and energized New York’s progressives, who took control of the state Senate and slashed rent growth in rent-stabilized housing.

Now, history could repeat itself, in a slightly different form.

A week after Trump’s election to a second term, the City Council is expected to vote on a bill that aims to save tenants thousands of dollars on broker fees when they lease apartments.

Shortly before Election Day, Council members were given copies of the measure to review, indicating approval is imminent. The bill was likely to be approved next week regardless of who won the White House, but progressives can point to its passage as proof to their constituents that they are responding to Trump’s victory.

“The FARE Act is a powerful example of how Progressives are taking on the real economic struggles everyday people face, like being price gouged on rent and broker fees,” Council member Sandy Nurse, co-chair of the Council’s Progressive Caucus, said in a statement.

“While moderate and right-wing politicians play their game of divide and distract, blaming immigrants, trans people, and progressives for the struggles of the working class, this bill does the real work.”

“It’s time the moderate wing of the Democratic Party stop playing it safe and lean into populist platforms like the FARE Act that brings people together by meeting their real, urgent needs,” she continued.

In New York City, Trump lost to Vice President Kamala Harris by 37 percentage points, according to unofficial election results. He had lost to Biden by 54 points four years ago and by 63 points to Hillary Clinton in 2016. Trump gained ground in Chinese and Orthodox Jewish communities in Brooklyn, Hispanic communities in the Bronx and Queens, and Chinese and South Asian neighborhoods in Queens, the New York Times reported.

“He didn’t do that badly in New York,” said political consultant George Artz. “The margins were not great.”

Democrats saw their edge slip, albeit slightly, in other races too. The party kept its majorities in the state legislature, but lost its supermajority — a veto-proof majority — in the Senate, according to City & State.

Democratic incumbents largely held onto seats in competitive races, and Democrats flipped three House seats, but in Brooklyn, Republican Steven Chan defeated Democratic state Sen. Iwen Chu.

Having the potential in both the Senate and Assembly to override a governor’s veto gave Democrats more leverage to push progressive policies, even without ever overriding a veto by Gov. Kathy Hochul.

The 2019 rent reform, which restricted the ways that landlords can increase rents on stabilized apartments, was progressives’ most significant real estate victory in ages. After years of trying to pass good cause eviction, they succeeded this year, but changes to the legislation prompted the city chapter of the Democratic Socialists of America to say the industry “effectively defeated it by watering it down.”