What's At Stake For CRE In Georgia's Senate Runoff Election
One of the most consequential runoff elections in U.S. history takes place Tuesday, and the result will determine the ability of President-elect Joe Biden to pass major economic policy changes that affect commercial real estate.
Georgia voters can vote in-person Tuesday after weeks of early voting in runoff elections for both of the state's Senate seats, and the results will decide the balance of power in Congress. The Democrats need to win both seats to force a 50-50 tie, in which case Vice President-elect Kamala Harris would cast the tie-breaking vote, otherwise Republicans will continue to control the Senate.
Democrats already control the House of Representatives, meaning a pair of wins Tuesday — or whenever the race is called — would make it easier for Biden to pass legislation, though his party would have a narrow majority in both chambers.
The races both appear close. Democrat Jon Ossoff is leading Republican Sen. David Perdue by 1.6 percentage points in the FiveThirtyEight polling average, and Democrat Raphael Warnock is leading Republican Sen. Kelly Loeffler by 2.1 points.
Many industry leaders have said they hope Republicans will retain control of the Senate, because divided government would likely keep the status quo in place for economic policy. Biden has proposed a series of sweeping reforms, many of which would need Senate approval, and it could be difficult to pass major legislation with Republicans in control of the chamber.
The president-elect proposed rolling back many elements of the 2017 Tax Cuts and Jobs Act, such as increasing the corporate tax rate from 21% to 28%. He also called for ending the 1031 exchange program, used by real estate investors to defer taxes on property sales.
Biden's proposed $2 trillion sustainable infrastructure plan could have big real estate implications, including a national set of building standards that could require 4 million buildings across the country to be retrofitted.
The Senate runoff races could also determine the amount of stimulus money the Biden administration is able to pass through Congress. President Donald Trump signed the $900B coronavirus relief package on Dec. 28, but many Democrats have called for more spending.
The $900B package included a host of items that impact real estate, such as $25B for rental assistance, nearly $300B for Paycheck Protection Program loans and $15B in relief to music venues and movie theaters. Real estate leaders have called for more support for apartment landlords and the restaurant industry, two areas that could be funded under another bill this year.
Biden's Cabinet nominations and other economic leadership appointments will also need Senate approval, and a Republican Senate could block some of his more controversial picks. Biden's nominations included former Federal Reserve Chairman Janet Yellen for Treasury Secretary, Rep. Marcia Fudge for Secretary of Housing and Urban Development and Neera Tanden to lead the Office of Management and Budget.
