What Can the Real Estate Market Expect from Another Trump Presidency?

As Donald Trump returns to the White House, the real estate industry is once again pondering what his presidency might mean for the market. Looking back at his first term, Trump’s policies and priorities provide some clues about what could be on the horizon.

A Pro-Business Stance

One of Trump’s hallmark approaches during his first term was reducing regulations across various industries, including real estate. His administration eased zoning restrictions, cut environmental regulations, and sought to streamline permitting processes. If reelected, we could see more efforts to reduce red tape, potentially accelerating commercial and residential developments.

Tax Policies Favoring Investors

The Tax Cuts and Jobs Act of 2017 was a major win for real estate investors, offering provisions like the opportunity to defer capital gains taxes through Qualified Opportunity Zones (QOZs) and maintaining the 1031 exchange rule. A second Trump administration might push to expand these incentives, further benefiting property investors and developers.

Infrastructure Development

Trump has long championed infrastructure as a driver of economic growth, although his initial promises of a sweeping infrastructure plan didn’t fully materialize. A renewed focus on building and improving infrastructure could create opportunities for real estate markets tied to urban development, transportation hubs, and commercial corridors.

Potential Risks

While Trump’s policies generally supported growth in the real estate sector, his approach to tariffs and trade created uncertainty in construction costs, particularly with materials like steel and lumber. Another term might bring similar volatility, which could challenge developers managing tight budgets.

Affordable Housing Challenges

One area that saw limited progress during Trump’s presidency was affordable housing. Critics argue that his policies leaned heavily toward large-scale development and high-end real estate investments. Without a significant shift, affordable housing concerns could persist, particularly in markets already struggling with shortages.

Wrap Up

Trump’s potential return to office could bring a host of benefits for developers, investors, and families looking to buy homes. For developers, reduced regulations and streamlined permitting processes may lead to faster project approvals, cutting costs and encouraging new developments. Investors stand to gain from favorable tax policies, such as continued support for 1031 exchanges and Opportunity Zones, which could open up lucrative opportunities in underserved markets.

Families looking to buy homes might also see advantages, particularly if an increased focus on infrastructure development improves accessibility and livability in suburban and rural areas. Enhanced transportation networks and urban revitalization projects could make more affordable housing options available in emerging neighborhoods. While affordable housing challenges remain a concern, policies promoting economic growth and job creation could improve overall housing affordability through increased supply and stabilized market conditions.

Ultimately, Trump’s pro-business approach may create an environment that encourages growth and opportunity across the real estate sector, making it a potentially promising era for those ready to seize the opportunities.