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Property Surveillance Aids in Arrest of Car Thieves

T & C Management has learned that a group of car thieves who had been known to spend time at a property we manage were arrested by the Albuquerque Police Department last week. The property is owned by Mr. Chuck Sheldon, CEO of T & C Management, and his video surveillance system was utilized by an APD detective to gather information and proof of the thieves’ activities. After their arrest, it was confirmed that one of the thieves was a resident of the property, so we are doubly glad to know that the other tenants will now be safer. We are very proud of this victory for apartment owners and managers in our fight against crime in the neighborhoods we pour so much time and concern into. T & C Management thanks the APD for their weeks-long investigation into these criminal acts that are a blight on Albuquerque’s great potential.

Image of a surveillance camera silhouetted against a blue sky with a strip of "police line do not cross" tape along the top of the image, and over the sky portion text reads "arrests aided by surveillance".

Video surveillance is increasingly important in the Albuquerque multi-family housing industry

Mr. Sheldon has installed video surveillance at a number of key properties largely in hopes that it would be useful to those policing Albuquerque’s especially difficult neighborhoods, and as a result keep his tenants and employees safer. Regarding this most recent use of footage by the APD, Mr. Sheldon says “This is why it is so important for owners like myself to install video surveillance and work closely with police. If, as a group, owners and managers participated in this manner, we could lift up these neighborhoods and improve quality of life for so many people.”

As a very active participant in the multi-family industry both at home in Albuquerque and on a state- and nation-wide level, Mr. Sheldon has long been committed to improving Albuquerque neighborhoods. He has spent a great deal of time and effort improving buildings and living standards through various building rehabilitation projects. As a developer, Mr. Sheldon has a reputation for making sure his units are aesthetically beautiful and structurally excellent regardless of the neighborhood or surrounding buildings, and as a manager, he is determined to keep property valuable and livable. But with crime an increasing concern, good units aren’t enough to ensure good living standards for Albuquerque’s people and families.

Video surveillance has also proven valuable in protecting property from vandalism, identifying other security holes such as back areas that need to be secured, and helping managers identify trouble-makers on properties. Overall, the systems, which have been active for less than a year, have proven invaluable. Mr. Sheldon added, “I want to encourage other owners in Albuquerque to take a serious look at the benefits of video surveillance. The money and time it takes to set up and maintain… we just got a whole group of car thieves off our property, we’ve protected our managers and tenants, made the detective’s job easier so they can move on to other crimes. To me, that’s worth all the time and hassle and then some.”

How Do I Leave?? Vacate Your Apartment Like A Pro!

You found that perfect apartment!  …But now it’s been awhile and it’s not so perfect anymore. Wrong location, wrong size, or just time for a change. On top of finding a new living space and renting or borrowing a truck, you signed a lease way back at the beginning and you have to figure out how to vacate without getting charged for extra rent or fees.

No need to worry, though, it isn’t too complicated, just time-sensitive. Here’s a guide to how to move out of an apartment managed by T & C Management.

A sample of our “30 Day Notice of Intent to Vacate” form.

Step 1: Send A 30 Day Notice

The first thing you need to do is let T & C Management know you intend to leave the apartment 30 days before you actually move out. We need some basic information:

  • Legal names of all residents on your lease
  • Current address including unit number (i.e. the unit you are moving out of)
  • The reason you are moving out
  • The date you intend to be fully vacated
  • A forwarding address (where we can send your security deposit and/or final statement)

There are two ways to provide this information:

  1. Come to our office and ask for a “30 Day Notice of Intent to Vacate” form (sample pictured). You fill it out, leave it with us, and you’re set!
  2. Write a letter and send it to us in the mail or via email. Address it to T & C Management, state that the letter is your “notice of intent to vacate,” and the information listed above. Make sure it gets to us 30 days before your desired move-out date.

Step 2: Bring Back Your Keys

A sample of our “Returned Keys” form.

You have not “moved out” until we receive your keys back – this is absolutely essential! The date you told us about in your 30 Day Notice is just an intended date. The date we consider you no longer occupying and paying rent is the day we get your keys. If you don’t get your keys to us on the move-out date you informed us of, we will continue charging rent for each day after, since we can’t rent the unit out to anyone else until we know you have actually left.

The process for bringing back keys is as simple as it sounds: come to the office, hand us the keys, fill out a “Returned Keys” form (sample pictured) and you’re done!

Step 3: Final Statement

You will receive a final statement and your security deposit (minus any charges) at the forwarding address you provided. That will be the final communication between us.


While we are always sad to see our tenants go, we wish you all the best as you move forward and into whatever new situations and locations await you!

IREM Priorities Fulfilled in New Tax Bill

Paul Ryan and other GOP Representatives discuss tax plan.

For property managers, many concerns were abated when President Trump hastily signed the highly controversial new tax bill into law on December 22, 2017. As has been noted by others in the industry, the bill was and will continue to be contentious among individuals in both professional and private life. However, there were a few key issues which IREM considered priorities for property management companies, and results on those topics are likely to be applauded across the board.

In a letter sent to IREM members, Director of Government Affairs Ted Thurn confirmed that the new tax bill fulfilled IREM’s biggest policy concerns. He wrote:

“The conference committee bill preserves 1031 like kind exchange for real estate, but eliminates the like kind exchange for personal property. Carried interest has been retained, however a three-year hold period is required to qualify.”

Additionally, the state tax deduction was capped at $10,000 generally, except for state taxes paid on investment property. The corporate tax rate was reduced to 21% from 36%. And notably, the cap on the mortgage interest deduction was reduced 25% from $1,000,000 to $750,000, but this only applies to new loans, so all mortgages already held will remain at the $1,000,000 cap.

While I personally have multiple concerns about this new tax bill for both businesses and individuals, it is important to note that these particular changes and preservations were hard won by organizations such as IREM, and will help the property management and investment property industries in the coming years. Exactly how this new tax structure will affect our overall picture remains to be seen, but myself and IREM will continue watching and doing our best to predict appropriate actions moving forward. In the meantime, we must continue to work for the betterment of the entire economy and all individuals, using the boons this bill has provided to improve the lives of our tenants, employees, and the industry at large.

By Chuck Sheldon, MBA
President, CEO, CCIM, CPM, of T & C Management, LLC
President Pro Tem, AANM
President Elect, IREM

Gross Receipts Tax Reform Not Likely In 2018

Rewriting and simplifying the tax code in New Mexico has been on the agenda of state legislators for years. For businesses in particular, the gross receipts tax laws are onerous and in desperate need of an overhaul. But yet again, we have come through another year without a successful tax bill, and according to an article by Bruce Krasnow recently published in the Santa Fe New Mexican, we should not expect one in 2018 either.

As we enter an election year, Democrat legislators are unlikely to pass any tax bill which Governor Susana Martinez could claim as a victory – which at this point means any tax bill at all. However, neither is Governor Martinez willing to bend on passing tax reforms, since she refuses to do anything to the tax code without an omnibus bill. Bruce Krasnow writes:

“The lack of a comprehensive fix to the state’s jumbled tax policy has put efforts to amend specific measures on hold. Smaller or stand-alone bills to charge the gross receipts tax on out-of-state internet sales, or tax nonprofit hospitals have been vetoed by Martinez. She has said she will not sign stand-alone tax bills into law without comprehensive changes.”

Representative Jason Harper (R – District 57) has a comprehensive tax reform bill which failed to move forward in 2017, but which he wishes he could put forward in the coming session.

Harper said the governor’s support has now become a detriment as she enters her final year in office. “I’m still pursuing reform, but I’m not naive,” Harper said. He said he plans to introduce what he calls “tax-reform junior,” which will focus on a few areas of the tax law. But according to Harper it won’t provide the benefits of lowering the overall gross receipts tax rate, which has been a detriment to business growth and economic development.

Harper is still working with colleagues to identify the key elements of a streamlined bill, but says it has not yet been drafted. A spokesman for the governor said both Wirth and House Speaker Brian Egolf, D-Santa Fe, said they would support a broader tax reform effort during a regular session after completion of the study.”

Impact on New Mexico Businesses

The present gross receipts tax system is a thorn in the side of New Mexico business. While legislators argue about its impact on out-of-state purchases and what to do with the money once it is in the government’s hands, smaller businesses that largely operate within New Mexico are left with accounting and cash-flow troubles. Troubles that are unnecessary and costly, reducing opportunities for growth.

The political maneuvering happening around this issue hurts businesses at a time when we have great opportunity for growth. The recession is over. The economy is picking up speed. Governor Martinez and the legislators on the Revenue Stabilization and Tax Policy Committee need to remember that business does not halt for politics, and small business owners like myself are still losing time and spending power.

By Chuck Sheldon, MBA
President, CEO, CCIM, CPM, of T & C Management, LLC
President Pro Tem, AANM
President Elect, IREM

NMREC Examines Options to Reduce Claims Against Property Managers

The New Mexico Real Estate Commission (NMREC) has determined that Residential Property Managers are the cause of far too many claims and general harm caused to the public. These claims come from unprofessional managers and range from poor service to fraud, theft and other illegal acts. These actions have caused harm to the general public ranging from a few hundred dollars to hundreds of thousands of dollars. As a result they have formed a Property Management Committee to investigate how to reduce claims and increase professionalism in the residential management business. As an experienced and longstanding professional management company in New Mexico, T & C Management has been attending the committee meetings so as to understand and perhaps collaborate on a solution moving forward.

There are several items being considered by the NMREC that would be helpful in limiting the claims and increasing the professionalism of residential property managers;

  1. Create an ombudsman program (e.g. GAAR) for complaints and have this program attempt to resolve complaints before they reach the NMREC. This would resolve many of the lesser complaints such as poor customer service and misunderstandings, etc., allowing the NMREC to have time to address the more serious ones.
  2. Expand the NMREC rules to state what activities unlicensed residential property management assistants are and are not allowed to perform. This would be similar to what already exists in the sales arena. Requirements to enter this business are fairly simple, and we do not believe they need to be onerous. Forms, rules, and contracts are standardized such that an intensive education and license is simply not needed for someone such as a leasing representative or someone who is assisting the responsible person / qualifying broker in residential management.
  3. Add a requirement for property managers to be bonded. This would be done with the intention of covering loss / general harm to the public. Bonds are inexpensive and and would parallel the required E & O Insurance already in place for licensed professionals.  Unfortunately, there is never coverage for fraud, theft or illegal acts by professionals, licensed or not.
  4. Mandate education in the property management field.  We believe that anyone working in this business should, at a minimum, be required to attend classes on the Owner Tenant Relations Act, Fair Housing, and NMREC ethics and rules for property managers. These classes would provide sufficient, overall education on the basic laws governing this business. In addition, brokers / qualifying brokers should be able to get CE credits on credentialing programs and classes which increase the professionalism in this field.
  5. Broker in charge.  The way the NMREC rules are written place an emphasis on the responsible person. This term equates to the licensed professional in charge of that sales or property management activity, i.e. the qualifying broker or associate broker. It would be ideal for Property Management Brokers in the residential area to have specific training and / or credentials in directing and managing such activity.

While this is not an all inclusive list, it’s good to see the NMREC agenda continuing to address the needs of the greater public.

If you are an owner looking for a residential manager, or a member of the public looking for a rental, make sure you chose a manager and/or company that’s professional, trained in residential management, has a longstanding history of success in this business, and the qualifying broker is an active and functioning member of the company.


By Jeff Zank, ARM
NMREC #19521

Statement on Tim Keller’s Election as Mayor of Albuquerque

Dozens of hot air balloons in various stages of rising over a large open area completely filled with thousands of people under a blue sky.

Hot air balloons rise above Albuquerque’s famed Balloon Fiesta

Released November 16, 2017

By Chuck Sheldon, MBA
President, CEO, CCIM, CPM, of T & C Management, LLC
President Pro Tem, AANM
President Elect, IREM

Winning any election is a long and difficult process, so congratulations and regards are due to Tim Keller for his successful campaign. I wish him the best people, ideas, and information as he moves into this new role on December 1st.

Albuquerque is my home because I love it, so I work hard for it. One of my main goals in my business dealings is to improve the lives of the people who live here. Working in tandem and partnership with the Albuquerque city government continues to be a big part of reaching that goal for me. I believe the same is true for the goals of the city. Partnership between public and private enterprise – the joining of our funds and infrastructure – needs to be the primary pathway to an ever-improving Albuquerque.

Many things need updated and brought under new scrutiny in Albuquerque, and Mr. Keller will have his hands full. I encourage him to remember the resources available to him in the private business sector as he deals with the many changing facets of Albuquerque. I look forward to interacting with Mr. Keller and his administration over the coming years. I believe great things are ahead for our city. Let’s keep working together.

Rent With Ease – Call a Property Manager!

By Jordan M.

I work here at T & C Management, and I loved interacting with property management companies long before I started here. But I’m a 20-something, not exactly the prime target for a company who manages other people’s residential investment properties, right? Turns out, that’s a limited view of the value of property managers! There are many advantages for the investor / landlord, certainly, but for those of us actually looking to rent, a place like T & C can be a lifesaver. Here’s how I found that out.

Just after graduating college, I went slogging through the internet searching for my first apartment. It was very frustrating. I’d lived on campus all through college, and had left all my peers – who might have been able to help with my lack of rental knowledge – back where I went to school. So I had no idea what I was doing, but I was determined to handle it. I spent a couple evenings sorting through at least three major apartment listing sites. I mostly found large complexes and sublets – and almost nothing in my price range. Every time I went out to see various complexes that seemed to fit my needs, I would go through a huge process just to get someone to show me around, and leave an hour or two later no further ahead, and with no time to go on to the others on my list. Sound familiar?

Finally, I just started calling numbers on signs I passed. One turned out to be a property management company, and it changed my whole experience.

I have to admit my ignorance here: I’d never heard of property management before this. I had no idea how it worked. But I was about to get a great education.

The leasing agent who answered the phone asked what I was looking for and if there were any other properties I might want to see, in addition to the one I called about. I was honest: I didn’t understand how she could show me multiple apartments at different properties? She explained that they handled the day-to-day business of a lot of different rentals throughout the city, so she could show me any of the properties listed on their website.

I jumped at the opportunity to work with just one company and still see multiple types of units.

We decided on a couple apartments that suited my price range (as low as you have, please) and location, and set up a time to go see them. At each, she told me various helpful points about the unit: a little history on the building, details about recent maintenance and renovations – which she knew because her company handled all that – and an idea of the feel of the community or neighborhood.

It was the only easy experience I had, and it ended in me finally getting the no-frills, simple apartment I needed. I loved the unit I chose, how easy it was to access 24-hour emergency maintenance, that I could pay my rent online, and more. The conveniences that came with a management company would never have been available had I rented directly from the landlord of a small property. It was so great that for my next apartment I convinced my roommate to trust me and go through one again. We had another great experience, and I’ll never go apartment hunting another way!

So if you’re in the market, give property managers a shot – T & C management can do the same for you that I experienced and loved.

Why 1031 Deferments Are Essential to the Real Estate Market

By Chuck Sheldon, MBA
President, CEO, CCIM, CPM,
T & C Management

Congress is in the midst of debating tax reform, and of course changes to investing, capital gains, and real estate tax law is of great interest to us and the investors whose property we manage. On October 26, the NAA published comments on research being conducted about the value of like-kind exchanges, i.e. 1031s. For years there have been discussions about how 1031s should be handled – especially whether 1031 deferments should continue being allowed. This round of tax reform debate needs to be influenced by research recently released which confirms the validity of what the real estate world has continued to fight for.

Here is an excerpt of NAA’s comments:

As Congress continues to debate tax reform, NAA/NMHC have strongly argued for lawmakers to retain Like-Kind Exchanges in their current form as they incentivize investment and improve market values.

Reinforcing that message, a new study has found that the value of a like-kind exchange, as a percentage of the price of the replacement property, can be up to nearly 8 percent of property value. […] The research, conducted by Professors David Barker, David Ling and Milena Petrova demonstrates the key role that like-kind exchanges play in preserving property values.

Many proponents of repealing like-kind exchanges believe the Treasury would gain substantial revenue that could be used to pay for lower statutory tax rates in a tax reform package. The authors find, however, that “repeal (of like-kind exchanges) appears likely to generate less than $500 million per year to the Treasury.”

The math in favor of 1031 exchange deferment is simple and essential for lawmakers to understand.

If, for instance, you want to trade up your property and have $100,000, without 1031 deferments you have to anticipate paying approximately 30% in capital gains taxes on that $100,000. As such, you are forced to trade for a lower-value property in order to cover the taxes, slowing your growth and contributing to the stagnation of the real estate market. But if you have the opportunity to use a 1031 deferment, you will be able to invest the full $100,000 for trading up into a more valuable property, and wait on paying the capital gains tax. This allows your personal money to grow faster, the real estate market to gain momentum, and governments to have larger, higher-valued properties to tax.

Removing the 1031 deferment would not ultimately produce greater revenue for the Treasury, but merely a reduction in ease of growth for property investors and the real estate market at large. It appears that the new tax plan as presented by Republicans will be retaining 1031 deferments, which is a step in the right direction. Without them, the real estate market is likely to see a reduced speed of growth. It is important that we keep on top of this issue to ensure that 1031s remain fully intact for the good of the wider market and individual investors.

A Real Chance Looms for Tax Reform This Year

Apartment Industry Advocates,

Tax reform is front and center on the congressional agenda, and there is a real chance it will become law this year. The last comprehensive tax reform legislation was the Tax Reform Act of 1986 (TRA 1986) signed into law 30 years ago by President Ronald Reagan. We all remember how that bill devastated the industry for years, so it is imperative that we engage with policymakers to ensure a more positive outcome.

In the years since TRA 1986, legislation has changed the tax code — mainly at the margins — focusing on rate changes and other targeted provisions while comprehensive reform has eluded policymakers. The election of Donald Trump and continued Republican control of the Congress has changed the outlook for tax reform. One-party rule where reform is a priority for all of the key players has increased the odds that broad-based legislation can become law.

At this stage of the process, House Republicans are taking the lead on reform. While President Trump made a number of proposals during the 2016 campaign, it is House Republicans who have put forward the most detailed plan. Entitled “A Better Way Forward for Tax Reform,” the House GOP released a “blueprint” for reform last summer, which is the starting point for their internal discussions. The blueprint would:

  • Reduce the top tax rate on LLCs, partnerships, S Corporations and other pass-thru entities to 25 percent from 39.6 percent;
  • Tax capital gains, dividends, and interest at a maximum rate of 16.5 percent;
  • Replace depreciation with immediate expensing of all investment except for land;
  • Eliminate the deduction for business interest;
  • Eliminate like-kind exchanges;
  • Eliminate the Low-Income Housing Tax Credit; and
  • Repeal the estate tax while retaining stepped-up basis for inherited assets.

It is important to note that while the blueprint appears to eliminate the LIHTC, there are good indications it may be put back into the House GOP proposal.

As the most developed tax reform product in circulation at the moment, the Blueprint is the centerpiece of conversation around tax reform. However, it is not yet legislation, and there could be significant changes made before an actual bill is introduced. Moreover, the White House and Senate still need to flesh out their own proposals. There is much time to go before a reform agreement is reached, if at all, and we can expect the details of any agreement to change several times along the way.

For our part, the apartment housing industry’s primary objective in reform is to support legislation that promotes economic growth and investment in rental housing without unfairly burdening apartment owners and renters relative to other asset classes. To this end, we are pushing lawmakers to ensure the following priorities are reflected in any bill that moves forward.

Tax reform must protect “flow-through entities” (e.g., LLCs, partnerships, S Corporations, etc.), which are the dominant business structure in our industry. Under this model, a firm’s earnings are passed through to the partners who pay taxes on their individual tax returns. Accordingly, Congress must not reduce corporate tax rates financed by forcing flow-through entities to pay higher taxes by subjecting them to a corporate-level tax or by denying credits and deductions.

It is also a priority for the apartment housing industry to maintain “like-kind exchanges” where property owners can defer tax on the gain on sale of an asset if, instead of selling their property, they exchange it for another comparable property. These rules encourage property owners to remain invested in the real estate market. Such an important tool for investment must be maintained in a reformed tax code. Notably, with the exception of land, the expensing proposal in the House Republican Blueprint provides for de facto like-kind exchanges.

Tax reform should also take care to preserve investment incentives. Borrowing is a central part of how apartment housing is financed (a typical development project could be financed with 1/3 capital and 2/3 debt and the tax code has long provided a full deduction for interest. Indeed,) without business interest deductibility, the cost of debt financing would increase and shift many real estate business models. This would inhibit development activity at a time when we face significant affordability challenges.

Policymakers should also take care when making changes to cost recovery rules like depreciation so they do not harm real estate investment. Apartment buildings are current depreciated on a 27.5-year schedule. While House Republicans are proposing to allow buildings to be immediately expensed, others have suggested extending the current-law depreciation period. This would surely lead to reduced development and investment and ultimately undermine real estate values and stifle job creation.

Finally, protecting the Low-Income Housing Tax Credit (LIHTC) is a priority for the apartment housing industry. The LIHTC is the central vehicle producing housing for moderate- and low-income families. We are in a period of crisis in housing affordability and need stronger incentives like the LIHTC to effectively respond. This program must remain a vital part of the strategy to address our nation’s housing needs.

You will notice some overlap between what is being proposed, at least in the House GOP Blueprint, and the apartment housing industry’s priorities. It is important to remember that policymakers are truly looking to reshape how taxes are levied in this country and that perhaps what they propose could effectively replace what is in the tax code now and keep the apartment housing industry whole. We remain open minded on this point as we continue to press for our top priorities and evaluate in detail what tax reform proposals mean for our business.

Every member of the apartment housing industry must be engaged in the advocacy campaign on tax reform. That means contacting your members of Congress and communicating our message. Changes to the tax code will impact all of us, and it is our responsibility to ensure whatever reform is passed does not harm our ability to provide housing to one-third of the nation. To learn more about how you can get involved in shaping the debate, contact Peter Fromknecht at and take our Advocacy Interview at to see who you might know on Capitol Hill! Your relationships with lawmakers and your willingness to act on those relationships will make the difference between success and failure on tax reform.

Thanks for reading.

For this and many other articles visit Apartment Association New Mexico

Unpacking the Meaning of a Trump Administration for the Apartment Industry

Uncertainty dominated the commentary written by key real estate analysts trying to forecast how the apartment industry and economy overall will be affected by the election of Donald Trump as the next U.S. President.

Most industry groups, admittedly, said they were caught off guard by the result, and they, no doubt, will continue to analyze the situation between now and January’s Inauguration Day.

The fact that Trump has never held a public office and that many say he manages impulsively, among other things, has caused most to suggest there is an even greater factor of unpredictability going forward.

Writes columnist Michael Gerson in The Washington Post, “Hillary Clinton proved incapable of defeating a reality-television host whom more than 60 percent of Americans viewed as unfit to be president.”

The election’s result has created a rare one-party, four-way control of the federal government (House, Senate, Executive and Supreme Court) and the continuation of the GOP’s domination of state governments and governor houses. (See “By the Numbers.”)

Adds columnist Eugene Robinson, writing in The Washington Post, “Some of the nation’s most diverse and populous states, including Texas and Florida, are living under one-party Republican rule.”

New York Post columnist Kyle Smith points out, “What kind of president will Trump be? It’s a tad too early to say, isn’t it? The media are supposed to tell us what happened, not speculate on the future.”

While it certainly is too soon to speculate what impacts the Trump Administration could have on the industry and the broader economy, following is a summary of thoughts and projections expressed during the 12 days following the Nov. 8 election.

Apartment Market/CRE Fundamentals

KC Sanjay, Senior Real Estate Economist, Axiometrics, believes the apartment market will perform well during Trump’s first term with average occupancy rates close to 95 percent and rent growth exceeding 3 percent from 2017-2020.

“New supply is expected to average about 330,000 units per year during the same time period,” Sanjay says. “But higher GDP and job growth, as Trump predicts will happen, could mean rent growth and occupancy increase by an extra 50-100 basis points.”

“It’s important to remember that many economists have a mild recession built into their models within the next 18 to 24 months, regardless of who is at the helm,” Paula Munger, NAA Director Industry Research and Analysis, says. “That’s obviously a downside risk to the apartment industry, but the demographic fundamentals are still pretty solid.”

“The economic cycle kicks in no matter who is president,” Sanjay writes. “The current economic expansion has lasted more than seven years, and the longest expansion period on record was 10 years. That means the business cycle is pointing toward a downturn in the not-too-distant future.

“Also, a recession has always occurred within 12 to 36 months (an average of 24 months) after the unemployment rate falls below the natural rate of 5 percent-it was 4.9 percent in October. So, it is likely a recession-albeit mild-will occur by the end of 2018.”

Concisely, Sanjay adds, “We expect the apartment market-and the economy-to be generally positive during the next four years, even though unexpected outside shocks could muddle things up.”

The Real Estate Roundtable, one of the CRE industry’s most active lobbying groups, said in a statement that the major planks of tax and financial regulatory reform, infrastructure investment, immigration issues, energy policy and physical and cybersecurity will all present opportunities to advance the economy and the stability of U.S. real estate markets.

According to Roundtable CEO and President Jeffrey D. DeBoer, “Real estate public policies are non-partisan. They should be based on objective economic principles, responsive to changing economic cycles and sensitive to societal demands.”

John Kevill, Avison Young Principal and Managing Director for U.S. Capital Markets, says, “Despite all the noise, Trump in my mind won on a promise of growth. His proposed infrastructure spending, plans for lower taxes, moving jobs back and a target of 4 percent growth all speak to that.

“If it appears that things are starting to happen in that regard, expect CRE investment to follow as yield will look to be relatively attractive. For now, investors will be hanging on his every word and every appointment until late January and not making too many major bets.”

Determined Advocacy Goes Forward

One sure bet is that NAA will work with the new administration.

Gregory S. Brown, NAA Senior Vice President of Government Affairs, says, “The outcome of the 2016 elections has dramatically changed the political landscape in Washington and the outlook for policy priorities of the apartment industry. We have one-party rule for the first time since 2010. That could mean accelerated consideration of numerous high priority Republican policy priorities, some of which impact the apartment housing industry. NAA looks forward to working with the new Administration, newly-elected members of Congress and returning incumbents of both political parties on critical housing concerns like flood insurance, tax policy and regulatory reform.”

Immigration and Apartments

Sanjay adds that stricter immigration laws are imminent. In the short-run, displacement of population could reduce the national consumption side of the GDP equation. For the apartment market, more immigrant renters may double up, reducing occupancy.

“Over the past 10 years, approximately two-thirds of new renter households were foreign-born and minorities,” Munger says. “Stricter immigration policy would absolutely impede that growth moving forward, but we just don’t know how much yet.”

Tax Policy: Individuals, Business

Randyl Drummer, CoStar, Senior News Editor, Los Angeles, writes, “Most of president-elect Trump’s proposed policies on corporate, individual and foreign taxes have been widely embraced by the real estate and financial industries, with the exception of Trump’s vow during the campaign to scrap the deduction for carried interest income.”

Drummer adds that previous guidance provided by the Trump campaign reported that Trump’s tax reform plan would reduce marginal tax rates on individuals (top rate of 25 percent) and businesses (top rate of 15 percent), increase the standard deduction to nearly four times current levels, and put a cap on existing tax breaks other than mortgage interest and charitable giving.

“Regarding real estate ownership and investment, Trump said he would tax long-term capital gains at a maximum rate of 20 percent, impose a ‘reasonable cap’ on the deductibility of business interest expense, and tax carried interest as ordinary income,” Drummer writes.

Economic Impact for Consumers

Economists considered that potential Trump policies could put additional dollars in consumers’ pockets and therefore increase consumption to help boost GDP, and perhaps job growth. This would occur, for example, through potentially less cost for health care (for citizens and employers), child-care tax credits and higher wages for low-skilled workers.

Randyl Drummer, CoStar, Senior News Editor, Los Angeles, suggests that these job sectors should improve during the Trump presidency.

“With plans to increase active duty military personnel and scale back international alliances, increased spending is likely to provide a boost to defense and aerospace industries,” Drummer writes.

Again, based on Trump’s campaigning, rust-belt industrial areas and auto manufacturing areas such as the Southeast (because of the potential for higher tariffs on auto imports) could get a boost, many say. Apartment investors and developers should take note.

Carried Interest Concerns

“Most of President-Elect Trump’s proposed policies on corporate, individual and foreign taxes have been widely embraced by the real estate and financial industries, with the exception of Trump’s vow during the campaign to scrap the deduction for carried interest income,” Drummer writes.

Drummer adds that previous guidance provided by the Trump campaign reported that Trump’s tax reform plan would reduce marginal tax rates on individuals (top rate of 25 percent) and businesses (top rate of 15 percent), increase the standard deduction to nearly four times current levels and put a cap on existing tax breaks other than mortgage interest and charitable giving.

“His tax plan would repeal both the alternative minimum tax and the estate tax,” Drummer writes. “Regarding real estate ownership and investment, Trump said he would tax long-term capital gains at a maximum rate of 20 percent, impose a ‘reasonable cap’ on the deductibility of business interest expense, and tax carried interest as ordinary income.”

According to a widely cited report by the Tax Policy Center (TPC) of candidate Trump’s tax proposal, it would “… reduce federal revenue by $9.5 trillion over its first decade and an additional $15 trillion over the subsequent 10 years, before accounting for added interest costs or considering macroeconomic feedback effects,” Drummer writes.

“Supporters of this tax reform contend that the cuts will stimulate economic activity that will offset the projected revenue losses,” Drummer adds.

What About GSEs?

The issue that might have the most direct impact on multifamily is the fate of the government-sponsored enterprises (GSEs) Fannie Mae and Freddie Mac. The GSEs guarantee covers almost all of the residential mortgages and nearly half of the multifamily mortgages originated.

Paul Fiorilla, Associate Director of Research, Yardi Matrix, in an article that appeared in Multi-Housing News, writes, “Trump did not talk about housing finance leading up to the election. Republicans in general are less inclined to see the need for the GSEs to backstop the housing finance industry, but Republicans are not in agreement on a solution. In recent years, Sen. Mike Crapo (R-Idaho) introduced a bill with Democrat Tim Johnson (former senator for South Dakota) that would involve a gradual wind-down of government involvement, while Rep. Jeb Hensarling (R-TX-5) has proposed legislation that would eliminate the GSE guarantee except as it relates to affordable housing. How easy it will be to eliminate the GSEs and what system will replace it is a big question, since virtually all home mortgages and a significant portion of multifamily mortgages originated today are backed by the GSEs.”

Cindy Chetti, Senior Vice President of Government Affairs at NMHC, says in the Multi-Housing News article, the shape of GSE reform could depend on the identity of the new Treasury secretary. “We want to make sure that no matter how they go forward here, that they look at multifamily and understand its unique characteristics” relative to the single-family market, according to Chetti.

Hensarling met with Trump in the week after the election. Some speculate that the U.S. Treasury Department was a topic of conversation.

This article and more can be found at National Apartment Association

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