WASHINGTON, DC-It doesn’t matter which administration it is, or what political party is in power: it is a truism that the president’s annual State of the Union speech is high political theater with plenty of red meat served up to the respective bases.
The obvious aside, though, this annual ritual does offer insight not only into the goals of the president but also where particular industries hope to see the economy and legislative calendar go. The commercial real estate industry is no different of course. Some issues the president touched on in his speech–and others he didn’t–of interest to the industry include the budget, the establishment of an infrastructure bank, affordable housing and multifamily finance.
It wasn’t long into his speech that the President made reference to the budget deal that Congress finally passed last year—a deal that undid some of the severe cuts under sequestration. “Nobody got everything they wanted,” the President said, “and we can still do more to invest in this country’s future while bringing down our deficit in a balanced way.”
The budget deal was perhaps the most significant achievement for the CRE industry and it was a welcome addition to the speech for that reason, JLL’s Kevin Wayer tells GlobeSt.com.
“The belief is that now agencies will continue to focus on strategic plans and ultimately move forward to make space decisions,” he said. “That is good for Washington DC and good for the industry in general.” Indeed, in separate news, the Government Services Administration released several prospectuses for leases this week.
The Infrastructure Push
President Obama also revisited his focus on infrastructure although in a more modest fashion than his earlier proposal for an infrastructure bank.
Clearly, though, infrastructure upgrades and investment remain on the Administration’s radar. The President referenced the continued need to streamline the permitting process among other measures.
“We’ll need Congress to protect more than 3 million jobs by finishing transportation and waterways bills this summer,” the President said.
“But — but I’ll act on my own to slash bureaucracy and streamline the permitting process for key projects, so we can get more construction workers on the job as fast as possible.”
Said Wayer: “we see this as an area that will continue to receive increased focus.”
The President went on to discuss a range of issues of interest to the country from minimum wages to the Affordable Care Act to a proposal for a new retirement plan. He didn’t touch on, at least not beyond the most general terms, was multifamily reform and affordable housing. Their omission gave the industry an opening, though, to voice their own opinions.
Housing Finance Reform
Cindy Chetti, the National Multifamily Housing Council’s SVP of Government Affairs, for example said that while the industry appreciated his support of housing in his speech we “would remind him that housing preferences are changing and a growing number of American households are choosing to rent for lifestyle and financial reasons.”
For that reason, Chetti said in a prepared statement, “housing finance reform must avoid a ‘one-size-fits-all’ approach. The multifamily market uses commercial mortgage debt products, and imposing single family reforms would jeopardize our ability to meet the nation’s need for millions of new rental homes over the next decade.”
The President also made numerous references to low income Americans and what measures he would like to introduce to better support them.
National Low Income Housing Coalition CEO Sheila Crowley, for example, applauded President Obama’s call for an increase in the federal minimum wage and an expansion of the Earned Income Tax Credit.
“But much more needs to be done to address the acute shortage of housing that people in the low wage workforce can afford,” she says in her prepared statement.
In no state is even the proposed increased minimum wage of $10.10 an hour sufficient to afford modest housing, she said.