The Stealth Regulatory Crunch Is Coming

You may worry that your business and the entire economic recovery will be harmed by the fiasco they call Obamacare. Maybe you think the series of apparent lies told by Obama about Obamacare not affecting your coverage, it will not cost you more, or this will reduce costs to the economy will somehow impact economic growth and the ability of Republicans and Obama to reach even a minimal agreement on fiscal matters. Or maybe you think all of what has been going in Washington is bad for the economy and so your investments in deals will be negatively impacted. If you do think these things you are right, but that is not the real issue for real estate. Friday night, when nobody was paying attention, Obama signed an executive order creating a new commission made up of Democrats to decide on what you as a real estate developer and investor will have to do now to comply with new regulations this group will devise to deal with what they perceive to be climate change caused disasters and other related issues.

However they want to sugar coat it, this is a massive new effort to develop federal regulations which will apply at every local level regarding water, construction codes, where and how you develop, retrofits they decide you need to make, and how you build or renovate to meet some new standard they will claim is needed due to their perception of climate change disasters about to befall all of us. It is so broad and so able to encompass everything in real estate that, over time, you will be impacted with higher costs. They might be in how you heat or air condition your building, how much power you are allowed to consume, what materials or reinforcing you need to use in construction, or all of the things you now deal with locally. It will now be mandated nationally with little or no regard to local needs or conditions. You will not have the ability you now have to meet with the ultimate regulatory authors because they will be this group of governors from a variety of Democratic states, who know nothing at all about real estate and could care less about what these things may cost you. Just imagine trying to appeal one of these regulations. Good luck even knowing where to file an appeal.