What Multifamily Can Expect From the Government Before the Midterm Elections

Despite the power they might seem to have, any administration, Congress, or agency has only so much time, resources, and political capital to achieve things. With midterm elections looming, a race is underway to see what can get done.

The National Multifamily Housing Council notes that there are only 15 in-session weeks for Congress to accomplish anything, including things large, small, and what is perceived as critical, which can include actions officials think might move the needle at the polls come Tuesday, Nov. 8.

Cindy Chetti, NMHC senior vice president for government affairs, sees five major areas that could have an impact on the industry.

First is tax changes that “continue to be the subject of significant discussion as the Administration and Democratic lawmakers look to enact major parts of their legislative agenda,” like when Biden’s budget resuscitated its CRE tax deduction kill list. Congress and the administration keep talking about offsets to help cover costs of spending proposals.

That would be tough. Democrats could in theory pass a bill in the Senate under the process called reconciliation with a simple majority, but it isn’t clear that their entire caucus would support it, and even with Kamala Harris voting in her role as Senate president, that is only 51 votes without Republicans joining.

Second, a slimmed down version of the Build Back Better bill. While Congress passed an infrastructure bill last year that Biden signed, social spending, including increased funding to address affordable housing and homelessness, got cut.

“As communities struggle with inadequate transportation, poor drinking water quality, sewage and other public systems, they are increasingly looking for ways to pass these costs to developers by making project approvals contingent on infrastructure investments,” Chetti says. “This translates into higher rents for households and does nothing to address the underlying shortage of affordable housing.”

Third, climate change regulatory actions, which could mean additional requirements that the NMHC sees as a potential source of increased costs. However, these proposals aren’t an easy walk. Even the SEC’s proposal to add climate change disclosures for publicly traded companies is seeing legal debate as to whether the agency has the legal authority for such a requirement.

Relief and prevention spending for Covid, the fourth item, doesn’t have specific effects on the multifamily industry, but as has been seen, if a pandemic kicks up, the potential need for relief to keep multifamily properties in business can be significant.

Finally, the US Innovation and Competition Act awaits a final conference committee to iron out differences between the House and Senate versions of the bill. “Importantly, passage of this legislation would provide funding to increase the production of semiconductors,” Chetti notes. “Given the global shortage of semiconductor chips and our industry’s reliance on chips for smart home and security tech within apartment communities, this legislation is critical.”