WASHINGTON, DC–It was a long night but the results of themidterm elections are clear: the Democrats have retaken the Houseof Representatives while the Republicans have expanded their holdon the Senate. We have, in short, a divided government inWashington, DC, with all its benefits and drawbacks.

The bottom line: a Democratic House and a Republican Senateprobably means little major legislation will occur.

A Good Run So Far

It should be noted that real estate has had a successful run inCongress, especially in the last couple of years. The Tax Cuts andJobs Act of 2017 is a case in point: among other things, itpreserved the deduction for business interest, like kind exchangesand low income housing tax credits. It also established the newpass thru tax regime as well as the new Opportunity Zoneprogram.

Deregulation Will Slow

That said, there was more the industry was hoping would beaccomplished on the Hill that will likely not happen now, namelycontinued deregulation. Further loosening of Dodd Frank,environmental laws and tax cleanup issues had all been on the tablebefore the election.

Testing Lab For Next Campaign

The House will probably become the center of anti-Trumpactivity–a sort of testing lab for the next campaign–which willmean major legislation is likely to be proposed that has littlechance of going anywhere. One possibility: an attempt at GSE reformin the House Financial Services Committee. However the groundworkfor action on this issue has not yet been done.

TRIA Needs to be Extended

There is one piece of must-pass legislation for the CRE industrythat will require bipartisan support, though–the Terrorism RiskInsurance Act, which is set to expire at the end of 2020. This lawimpacts most business properties and is a key to transactions andrefinancing. Without a doubt it has to be extended.