Five ways Biden could change the game for real estate

Democratic nominee has proposed changes to key policies

Democratic presidential nominee Joe Biden has laid out changes he would make to programs and policies beloved by the real estate industry. (Photos via Getty Images)
Democratic presidential nominee Joe Biden has laid out changes he would make to programs and policies beloved by the real estate industry. (Photos via Getty Images)

For the last four years, real estate companies have had one of their own in the White House — a fact that has proven lucrative for some of the industry’s biggest players.

Now, Democratic presidential nominee Joe Biden has laid out changes he would make to programs and policies beloved by the industry. In some cases he has been fairly specific and in others vague: During his nomination acceptance speech Thursday night, he took aim at the 2017 federal tax law, calling it a “$1.3 trillion tax giveaway to the wealthiest 1 percent.”

“We don’t need a tax code that rewards wealth more than it rewards work. I’m not looking to punish anyone. Far from it,” he said. “But it’s long past time the wealthiest people and the biggest corporations in this country paid their fair share.”

Here are some of the key issues that real estate is watching closely as November nears and what actions Biden has pledged to take if he defeats President Donald Trump:

Opportunity Zones

Included as part of the Republicans’ federal tax overhaul in December 2017, the Opportunity Zones program offers capital-gains tax breaks to developers who invest in one of more than 8,700 designated areas across the U.S. Trump has lauded the program for pouring investment into previously “neglected neighborhoods,” as the initiative encourages development in distressed “zones.”

But the program has also drawn criticism for benefiting deep-pocketed developers without enriching the targeted communities. A report by the Urban Institute last month concluded as much. In January, the Treasury Department launched an investigation into the program.

Citing similar criticism, Biden has indicated that he would reform the program. The former vice president has proposed requiring recipients of the tax breaks to make public disclosures of their investments and the impact on local residents in terms of housing affordability, poverty and job creation. He has also called on opportunity funds — money raised to take advantage of the tax break — to incentivize partnerships with nonprofits and community groups.

Chinese businesses in the U.S.

After the Trump administration raised the prospect of banning Beijing-based ByteDance, the parent of social media app TikTok, from operating in the U.S., the president inked an executive order that gave the company an ultimatum: Find a buyer for its U.S. operations in 45 days or leave the country. The order prevents “any transaction by any person” in the U.S. with TikTok. A similar order was signed barring transactions with WeChat.

Though Biden has reportedly instructed his own staff to delete the app over security concerns, given his reputation as a moderate, he could offer landlords some hope that their Chinese tenants won’t be banished from the country. That would be welcome news for the Durst Organization, which agreed to lease 232,000 square feet to TikTok at its Times Square office tower, One Five One, and to other landlords needing tenants in an at-risk office market.

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Fair housing

Last month, Trump repealed the Affirmatively Furthering Fair Housing rule, touting that doing so would save suburbs from having to welcome low-income housing. The 2015 rule required local governments receiving federal housing financing to identify discriminatory housing practices in their communities and devise a plan to combat them.

Biden has said he would reinstate the rule. While supported by affordable housing advocates as a step toward adding some lower-cost housing to the suburbs, the rule is one of many efforts that, collectively, have been resisted and evaded by much of suburbia.

1031 exchanges

Just three years ago, it seemed like-kind exchanges would die on the Trump administration’s watch. The 1031 tax code provision, which allows investors to defer taxes by rolling their capital gains on recent property sales into new properties, was on the chopping block as part of the 2017 tax overhaul. Instead, the policy was changed to apply exclusively to real estate, excluding other assets such as artwork.

As part of a broader plan to roll back Trump-era tax cuts, Biden has proposed making 1031 exchanges available only to those making less than $400,000 a year. The change would help raise revenue for Biden’s $775 billion plan to fund child care and care for the elderly over the next decade. While many in the industry are skeptical that Biden would follow through with restricting 1031s, they assert that doing so would hurt an already struggling economy.

“It would just pull the rug out from underneath a very huge part of the economy,” Stuart Saft, head of the real estate department at law firm Holland & Knight, told TRD following news of Biden’s plan. (Saft’s assessment of the impact might be a stretch, but his sentiment reflects how near-and-dear 1031 exchanges are to the industry.)


The Tax Cuts and Jobs Act of 2017 implemented a $10,000 cap on deductions of state and local taxes. That aspect of the law disproportionately hit high-tax states such as New York and New Jersey, where tax bills typically exceed $10,000. Property taxes alone can be several times that amount, as can state and city income taxes, and the change put a chill into the tri-state area’s residential market.

Back in December, House Democrats passed a bill that would have increased the SALT deduction cap to $20,000 in 2019 and then done away with it entirely in 2020 and 2021. The change, however, did not sit well with the Republican-controlled Senate, as the GOP sees SALT deductibility as a subsidy to high-tax blue states. Democrats have since fought to include language in the next Covid-19 relief package that would eliminate that cap.

If Congress were to pass a measure to raise or eliminate the cap, Biden likely would sign it. Trump has promised to veto earlier attempts, although he was initially surprised and pledged to look into the deduction cap when Democratic leaders complained to him directly about it — even though he had signed the bill enacting it.

Write to Kathryn Brenzel at