This article is an excerpt from a legislative update which will publish in the November/December issue of JPM.
The 2020 election was a campaign Americans have never experienced before, as many candidates could not run a typical campaign due to COVID and social distancing protocols. As you may recall, seats contested in the 2020 election included all 435 seats in the United States House of Representatives, 35 of the 100 seats in the United States Senate, and the Presidency of the United States.
While each state establishes a deadline for election results to be certified, former Vice President Joe Biden is the presumptive winner of the 2020 election. In the U.S. House, Democrats will remain in control but will have the smallest majority in two decades. Over in the Senate, Republicans currently hold 50 seats, compared with 48 in Democratic hands. However, control of the Senate will be decided on January 5 in two runoff races in Georgia. If the Democrats win both Senate seats, they will have control of the upper chamber with Vice President-Elect Harris being the tiebreaking vote.
We don’t know what his top political priorities are, but during the campaign presumptive President-Elect Biden released several policy positions addressing the real estate industry. Regarding taxes, Biden stated he would reinstate the 39.6% tax rate from the current 37% rate; raise the corporate tax rate from 21% to 28%; and impose a 12.4% Social Security payroll tax on earned income above $400,000. Biden recently suggested eliminating 1031 exchanges for real estate investors with annual incomes of more than $400,000 in order to help pay for a ten-year $775 billion plan that would create universal preschool, eliminate home care waiting lists for those on Medicaid, and create tax credits for low-income and middle-class families to help pay for childcare, among other initiatives.
Biden’s infrastructure proposal includes investing $2.4 trillion in modernizing highways, roads and bridges built for climate resilience, electric vehicles, mass transit and high-speed rail energy. The plan would also include making the energy industry carbon neutral by 2035; investment in zero-emissions public transportation; a plan to upgrade and weatherize 4 million buildings and 2 million homes; construction of 1.5 million new homes, and other elements.
On the affordable housing front, the presumptive President-Elect plans on expanding the Section 8 housing choice voucher program, the largest federal housing program for low-income renters. Biden would make Section 8 an entitlement, thus ensuring vouchers to all eligible people.
More specifically, Biden would require states receiving government funds through Community Development Block Grants or Transportation Block Grants to incorporate inclusionary zoning into their planning. Inclusionary zoning requires that a portion of new construction be set aside for affordable housing. Biden also would allocate $65 billion for state housing authorities and the Indian Housing Block Grant program to build and restore housing in low-income areas.
However, as stated earlier, his political priorities may change over the next several weeks. We must also keep in mind that the final make up of Congress, dependent on run-offs in Georgia, may impact the policies Biden can implement. Further clarity on top priorities will come into focus as we approach Inauguration Day, January 20, 2021.
*Please note this blog was updated on November 19, 2020 to recognize the certification process for 2020 election results.