New Administration, New Opportunity
By Thom Amdur
3 min read
“I’ll go anywhere as long as it’s forward.”
– David Livingstone
Despite the extended and rancorous election season we just endured, as I look back over the past 12 months I think our industry had a pretty good year. By and large, owners and developers benefited from historically low interest rates and high tax credit equity pricing. Sellers benefited from low cap-rates, and there continues to be a strong demand for rental properties in most markets.
This year is shaping up a little differently. For better or for worse, the forces of change are exerting themselves on the American people and politics and change breeds uncertainty. On the political front, after eight years of the Obama Administration, come January 20 there will be a new administration with a very different political and governing philosophy. The mere prospect of tax reform (more imminent than any time since 1986) has led to a significant disruption in the tax credit equity marketplace. Furthermore, on December 14, the Federal Reserve Board Open Markets Committee raised benchmark interest rates – onlythe second time it has done so in the past eight years – signaling that the era of near-zero interest rates could be at its end.
While we certainly face some significant real and existential threats in 2017, I believe we are also in a positionto capitalize on new opportunities that this change presents. Market disruption creates opportunities for the prepared and new political perspectives and priorities can also create new opportunities, sources and/or partnerships in our sector. While change is constant, the opportunities arising from it are not a given. We must also be willing to change, to be flexible, and to think in new ways if we are going to endure.
While I continue to be unnerved by aspects of the current zeitgeist, I think much of what we do could resonate with the political priorities of the new Congress and Trump Administration. We simply need to talk about our issues, the constituencies we serve and the key performance indicators that drive economic development a little differently than we have in the past. Despite our polarized politics, we continue to be a bipartisan industry. There is a lot of policy “middle-ground” where we can create some “wins” for our industry and also for the new Congress and administration.
We have a great story to tell: whether it is providing supportive services to disabled veterans, or housing the working poor in rural America and distressed urban communities, our industry serves many key political constituencies that feel left behind in today’s economy. Jobs and infrastructure are an early administration priority and the evaluations of ARRA have shown that when it comes to job creation, the expansion, preservation and rehabilitation of affordable housing, public housing, historic structures and commercial real estate is as good or even better than investments in our bridges and highways. We can remind our policymakers that housing is where jobs go to sleep at night and that businesses require accessible affordable housing across the income spectrum to attract and retain the best talent.
One last parting thought from John F. Kennedy that is guiding my thoughts for the New Year: “Change is the law of life and those who look only to the past or present are certain to miss the future.”
