President Donald Trump signed a barrage of executive orders on his first day in office Monday, including many that will have a direct impact on the real estate industry.
The president said he planned to sign off on nearly 100 executive actions aimed at rolling out his second-term agenda and peeling back actions taken during the Biden administration.
Returning to the Oval Office to sign his orders, Trump reflected on what he had learned during his first term.
“People used to say, ‘Who’s worse, a politician or a vicious real estate developer?’ And I’d always say the real estate developer’s far worse,” he explained. After about three months, Trump said, he came to the conclusion that real estate people are, comparatively, “quite nice.”
And if you’re among those people in real estate, here are four policies you should be aware of.
1) Trump signed a slew of orders related to the federal workforce that could impact the government’s office footprint. They include officially establishing the Department of Government Efficiency, which is spearheaded by Elon Musk and seeks to cut government waste.
Trump also called federal workers back into the office, put freezes on hiring and new regulations and ordered an overhaul to the government’s hiring process that aims to weed out candidates based on identity politics.
All told, Trump’s focus on the government workforce and efficiency could result in less demand for office space.
2) Trump signed an order targeting housing costs by cutting regulations and expanding supply.
“Many Americans are unable to purchase homes due to historically high prices, in part due to regulatory requirements that alone account for 25 percent of the cost of constructing a new home according to recent analysis,” the order read.
It goes on to state that Biden-era regulations are estimated to have imposed “almost $50,000 in costs on the average American household, whereas my first-term agenda reduced regulatory costs by almost $11,000 per household. It is critical to restore purchasing power to the American family and improve our quality of life.”
Trump’s figures appear to come from a report by the Committee to Unleash Prosperity, a think tank that advocates for trickle-down economics policies.
3) The president also declared a national energy emergency, pledging to tap into natural resources to expand the energy supply, particularly in the Northeast and on the West Coast.
While the scope is not clear, the declaration could have an impact on the data center business, which requires enormous amounts of power.
Investors like Blackstone that have gone heavy into the data center business have repeatedly cited energy constraints as a natural limiting factor for the development of new centers.
Karthik Subramanian, energy industry analyst at Lux Research, told Data Center Dynamics that natural gas should play a big role in the future of the nation’s energy grid.
“With the Trump administration coming in, I am expecting a lot of natural gas-based incentives and a focus on gas power generation,” Subramanian said. “We have seen companies like Exxon Mobil and Chevron publicly state their interest in supplying power, rather than just supplying oil for data centers, which is quite a big jump.”
4) Another order appointed his nominee Jay Clayton as the U.S. attorney for the Southern District of New York.
Clayton was formerly the chair of the Securities and Exchange Commission, where he was seen as having a “generally pro-business approach, though his office brought some of the first enforcement actions involving crypto assets,” according to the New York Times.
During an interview with CNBC in February, Clayton did share some thoughts on commercial real estate, saying the trouble was in smaller banks in the $1 billion to $10 billion-range that have outsized exposure to CRE.
“We are going to have problems — if rates continue to stay where they are and office occupancies stay where they are — at a number of small banks,” he said.
Clayton will take the job as Trump has called for the prosecution of people like New York Attorney General Leticia James and state judge Arthur Engoron, who oversaw Trump’s real estate fraud case and handles many other New York real estate cases.
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