Mark Duclos president of SIOR (The Society of Industrial & Office Realtors) and president of US brokerage firm, Sentry Commercial, has provided his take on the Biden v Trump battle in a Q&A.
Connecticut-based Duclos represents more than 3,400 members in 686 cities and 38 countries as the head of “the world’s most powerful commercial real estate network”.
Can you tell us what the mood is like on the ground in the US?
Politics is polarizing in many parts of the world, but in the US it just seems like it is at another level. We have a polarizing incumbent President who creates strong emotions on both sides of the aisle, as well as some very significant social issues. Couple this with strong voices on both the far left and the far right and you have the makings for an emotional population. The reality is that the US is getting a new President in January - what is still unknown is whether he will have the power to implement new policy. We’ll know more once the Georgia Senate run-off election results come in in January. If I had to describe the mood in the US in one word, I would use “Stressful”!
Is this as seismic an event as the media response suggests?
In my opinion, no. The election of our President is only one of the many factors that count. The solidification of a conservative Supreme Court is huge and the balance of power in the House and Senate are big as well. Where it does make a difference is the use of executive powers. And if we have a President who chooses to use executive powers in the absence of the ability to get things done legislatively then that could have an effect on contemporary challenges - like how government handles the pandemic.
What are the most immediate changes that are likely to take effect?
Nothing jumps out at me other than change of Covid policy. President Trump has decided to place responsibility in the state’s hands. President-Elect Biden will very likely put more in Federal Government hands. This could, of course, cause more national lockdowns which, in theory, could have negative effects on the US economy. Of course, as of this writing, the stock market doesn’t appear to be worried about that.
Despite the outcome, there was a huge show of support for Trump. What is his appeal and what can others learn from his ability to connect with huge swathes of the electorate?
My purely personal opinion is that Trump symbolizes change: change from over-reaching government, government bureaucracy, political correctness, federal government regulation etc. He is pro-business and is seen as someone who is willing to take-on unpopular challenges (migration, China, etc.). The problem isn’t the failure of Trumpism (Trumpism actually was a winner in the election), it’s Trump himself. He can’t help himself from self-destructing. It’s a character issue, not policy.
Is it possible to steer away for the divisive culture of politics, or is it here to stay whoever is in power?
The divisive culture of politics has been here for quite some time, so this is nothing new in the US (albeit it might be ramped up). There are a number of reasons why it has ramped up, beyond Mr Trump. Social issues such as approach to Covid, Black Lives Matter, Healthcare, Education etc.) are all top of the list and very emotional subjects. The path to solutions to these challenges are embedded in philosophical approach. And the way you approach these challenges typically will be in line with your political persuasion, thus causing emotion on philosophical sides, which (again) typically align with your political party.
How much was his handling of covid-19 in a factor in Trump’s defeat?
I think it was a major part of it. In the US, the pandemic became as much a political issue as it was a health issue. President Trump’s approach to state control versus federal control drew political lines. The wearing (or not) of a mask became a political statement as much as a way to control the virus. The way states responded to the pandemic to shutdown your state or not, or something in between created inconsistencies and many of the looser-controlled states tended to be red states. To this day I believe if Mr Trump had just said “wear your damn mask” he’d have been re-elected.
How will history judge his economic policy?
Time will tell. Many believe, while successfully today, we will pay for his policies in the years to come. That he mortgaged the future. I am not astute enough to say whether that’s right or wrong.
Was having a real estate developer in the White House good for the industry?
Directly, I don’t believe so. I think having a business-friendly President was good for business, which then of course is good for our industry.
What does a Biden administration mean for the economy?
I think there is a lot of trepidation that Mr Biden’s policies and the cost of the social programs desired, will have a detrimental effect on the economy. That said, I don’t believe President-Elect Biden will be able to implement a number of Democrat-driven policies. The Democrats (and Mr Biden) will clearly need to work with the Republicans to find solutions, which will have limited negative effect on the economy.
Could we see increased scrutiny surrounding “big tech”? If so, does that have implications from a real estate perspective?
Clearly the narrative is that the Democrat party is ready to take on Big-Tech. That said, the reality is that Mr Biden’s transition team includes a number of corporate execs, including big-tech, which would call into question just how hard he will come down on big tech. We will see.
Does the new administration have any particular implications for real estate?
The biggest implication at the moment would be the elimination of the 1031 tax free exchange. Mr Biden let it be known during his campaign that he was targeting the potential elimination of this law in the tax code. The other one to watch would be the possible roll-back of the SALT laws (state and local tax deductions). These were tax laws initiated by the Trump administration that capped tax breaks on state and federal taxes. Some believe Mr Trump targeted voter-unfriendly Blue States, thus the possible elimination of these caps. Lastly, possible restructuring of the Opportunity Zones (OZ’s).
Is there likely to be any immediate impact on real estate brokers and investment managers?
I am not sure about investment managers, but I have heard of no expected adverse impact on real estate brokers.
