Be it a blue wave, a red wave, or a contested election that results from Election Day on Tuesday, Washington, D.C., is on track for a political jolt.
Boston’s real estate market? Maybe not.
The stock market is temperamental — going boom or bust around the coronavirus pandemic, policy negotiations on Capitol Hill, or a presidential tweet. But the rigid fundamentals around Boston’s hot housing market and its limited supply are likely to reduce the impact of whatever the outcome is from Election Day (or week … or month), real estate experts predict.
“There’s extreme demand that’s been exacerbated by COVID. As people are pushing toward the suburbs and pushing to buy, I don’t think the election will fundamentally change that,” said Michael Procopio, vice president of development at Procopio Cos., a real estate development firm. “I don’t think the election will change monetary policy in a big way.”
Neither President Donald Trump nor former Vice President Joe Biden are expected to drastically alter the current low interest rate environment given the ongoing economic certainty surrounding the pandemic. But that economic uncertainty hasn’t slowed down Boston’s ballooning housing problem.
A combination of restrictive zoning in the suburbs, as well as historically less density in even Boston’s urban core, have played a role in the region’s limited housing supply. The supply crunch caused housing prices to soar 53 percent between 2009 and the beginning of 2020, according to an October report by the Brookings Institution.
No matter who the ultimate winner of the presidential race is, it is highly unlikely the hundreds of thousands of new units of housing needed to address Boston’s shortage will materialize from the Election Day victor. Even if there is a near-term impact from the election, it would probably play out in the stock market rather than the housing one, which is traditionally slower in the winter months anyway, experts say.
“Do I think uncertainty during arguably the three or four quietest months of real estate are going to actually make a dent in real estate? No. Could it in perception? Yes,” said Procopio, whose firm specializes in residential developments across Greater Boston. “Nobody is going to sit down and think it’s a good time to sell their house with the Dow Jones seesawing up and down several points each day. I would tell agents to calm people down. By the time they’re ready to put their house on the market in the spring, this would be behind us.”
But there could be longer-term impacts based on who wins.
While Trump issued an executive order in September allowing many renters during the pandemic to avoid eviction through the end of the year, Biden is largely expected to continue or even strengthen that measure — a boon to renters but a potential boondoggle to Boston’s apartment landlords.
The Trump administration suspended the Affirmatively Furthering Fair Housing Act — a measure aimed at correcting racial segregation sparked by housing practices — and implemented a new rule, Preserving Community and Neighborhood Choice. This move has been a central point in Trump’s appeal to protect “once thriving Suburban areas,” as Trump tweeted in June. A Biden administration is expected to reinstate the act and even call for more housing density as part of his greater climate change push.
Biden contends that his administration would raise taxes on individuals earning more than $400,000, but Democrats want to restore the full federal deduction on state and local taxes (known as SALT) that was capped at $10,000 under the 2017 Trump tax reform initiative. Biden has also proposed a $15,000 first-time home buyer tax credit.
“The thing at the end of the day: You still have to pass all of this,” said Joseph Biasi, a consultant at real estate data firm CoStar Group. “It’s not going to be hugely different for either one unless Biden gets the House and Senate or Trump gets the House and Senate. Under a split government, how much can they really get done?”
The real change factor to Boston’s real estate market may have less to do with what happens next week and more with what has occurred in the past seven months.
“The more secular or structural things happening on the economy — like the shift to e-commerce and work-from-home — those are far more important for multifamily, office, industrial, and retail than some tax policies that aren’t directly going toward commercial real estate anyway,” Biasi said.