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Multifamily and the 2020 Candidates: An Election Guide – Part II
As primary season goes on, the Democratic field continues to shrink. Poor performance in South Carolina by Pete Buttigieg and Amy Klobuchar have led to them suspending their campaigns and endorsing Joe Biden. However, both have transcended their constituencies to enter the national consciousness as political players. The Former Mayor of South Bend, Pete Buttigieg, and current Senator from Minnesota, Amy Klobuchar, both might vie to fill the Vice Presidential slot, or could aim for a different cabinet-level position. As it’s unclear what the two former candidates have planned, we’ve included their housing policies alongside that of billionaire Michael Bloomberg, who dropped out after performing worse than he anticipated on Super Tuesday.
Michael Bloomberg, former Mayor of New York City, has a housing-related track record (and legacy) unlike the candidates he competed against. Bloomberg steered the nation’s largest city for three terms after 9/11. He has received credit for rehabilitating the city, but also for making development difficult in some areas, increasing gentrification, and a decrease in the quality of the city’s public housing stock.
Given his track record, what sort of housing policy could the country have expected from a Bloomberg presidency? His campaign site focused on a few policies: increasing federal spending to reduce homelessness, financial assistance for low-income renters, and the creation of new affordable housing. Unlike other candidates, Bloomberg generally eschewed attaching specific expenditure numbers to his plans. This lack of detail made it difficult to discern exactly what impact, for instance, his affordable housing plan might have had on private multifamily companies. That said, the former mayor’s moderate to right-leaning political views meant he almost certainly would not have spend on the scale of a Warren or Sanders presidency. Beyond spending, Bloomberg had no sweeping, national policies like rent control other than incentives for municipalities to reform their zoning policies.
Bloomberg’s tenure would have preserved the status quo for multifamily professionals, while possibly granting unforeseen tax breaks and other boons in the shape of reworked urban zoning plans.
Senator Klobuchar had modest housing policy plans for housing in the country. Her policies did not include specifications about increased spending affordable housing, implementing rent control, or efforts to regulate interstate acquisitions.
Breaking from Buttigieg and other moderates, she did plan to create a federal program which would have provided legal aid to those undergoing evictions. The creation of such a program would complicate the eviction process for all multifamily owners if she were able to pass it as a cabinet member. Beyond providing legal aid, Klobuchar plans included to urban zoning changes, like the Minneapolis 2040 plan. The 2040 plan aims to overhaul life in Minneapolis, expanding public transportation and affordable housing while providing incentives to small businesses. If Klobuchar receives a cabinet position overseeing housing policy, prepare for a potential increase in legal fees, but few other changes.
The former Mayor of South Bend had plans with few implications for the real estate industry. His plans called for spending some $150 billion to produce or restore some two-million units of housing, compared to billions and trillions, respectively, that Warren and Sanders plan to spend.
For multifamily operators, the more relevant portions of his plans included commitments to regulating interstate landlords. Media coverage of this proposed regulation was next to nonexistent, and the former official page for Pete’s housing policy mentions it but once, referencing it as part of a “National Housing Act for the 21st Century”. Pete’s middle of the road ideological position in the field of candidates suggests that as Vice President or in a cabinet position, any effort to regulate acquisitions, dispositions, or rent increases by large multifamily owners would not resemble, for instance, Sanders’ stringent plans for national rent control. Acquisitions teams that acquire across state lines should nevertheless remain wary, as the introduction of even minor changes by a HUD led by Buttigieg could have serious implications for particularly active companies.
This is the second in our series examining the housing plans of all the major presidential candidates and their impact on the multifamily industry. If you would like to receive these insights straight to your inbox, sign up to your left. In the meantime, stay tuned for our final piece!