Under Tax Reform CRE Thrives, Residential Takes a Hit

Fordham Real Estate Institute and RESA panel on tax reform.

NEW YORK CITY—Brad Klatt, a partner at the real estate development firm, Canoe Brook, acknowledges with the tax reform, Americans are still only three feet from the gate. However, he corrected the NY Post headline which read renters were winners under the tax reform. “I don’t think that’s true. I think the answer is rental owners are the winners in this new tax code,” said Klatt.

For filing federal tax returns, by increasing the standard deductions, capping the combined state, local and property tax deductions to $10,000, and limiting mortgage interest deductions to mortgages up to $750,000, the law reduces incentives for home ownership.

Klatt reviewed underwriting scenarios showing post-tax reform left people with less after-tax cashflow. With reduced buying power, their aspirations for home ownership were also diminished.

Klatt, along with Richard Shapiro, director of EisnerAmper; Mike Slattery, SVP research, Real Estate Board of New York; Jimmy Hinton, managing director of research, HFF; Jonathan Miller, CEO, Miller Samuel Inc.; and Steve DeNardo, CEO RiverOak Investment Corp., participated in a panel moderated by James Nelson, Vice Chairman at Cushman Wakefield.