Innovate or Legislate: How Evolving Policy is Affecting CRE

02/05/2020 - Blog

Despite the anticipated furor surrounding the 2020 presidential election, there are likely to be a large number of races this year with the potential to significantly impact the commercial real estate industry.

From the White House to Congress to local city councils, policymakers are engaging more and more in policy around how we all use real estate.

There is a potentially existential threat for the corporate real estate industry: innovate, or policymakers will force change. Some states have already begun attempts to address the housing affordability crisis by implementing new rent control measures, and more such measures may be on the way. On another policy front, some property owners and corporations, such as Walmart, now face lawsuits for allegedly failing to provide security to prevent mass shootings, challenging the established understanding that neither retailers nor owners are liable for acts of violence perpetrated on their premises.

While in some major metro areas, rent control is a key issue for candidates, in other areas, policymakers are looking to entice additional investment from the industry in ways that can transform their tax base and economy. Still more policymakers, attorneys, and CRE professionals are evaluating the way CRE intersects with emerging gun control policy. Even the legalization of cannabis impacts leases and investment strategy for many CRE firms. And these policy shifts are not the only major changes.

From increasing urban populations leading to the rise in popularity of multifamily housing to the nascent “co” trend giving rise to co-working and co-living spaces to the need for new types of industrial spaces to address last mile and warehousing concerns for retail, the 2010s have seen fundamental changes in the way we use real estate.

CRE is at a crossroads, and the paths real estate professionals take will determine who will lay the groundwork for the future of real estate, innovative CRE professionals or policymakers. At a recent Bisnow panel discussion, The Donaldson Group CEO Carlton Einsel put it well: “[A]s an industry, we have to do something to help solve [these issues], because if we can’t, it will be solved for us by politicians…” To the credit of industry professionals, many are developing innovative solutions to the complex problems we now face. From pioneering new ways to leverage multifamily living to partnering with local communities and policymakers to better understand their needs, CRE professionals are, now more than ever, working to help create thriving communities.

Over the course of the next few months, EBI Consulting will highlight a few of the ways public attitudes toward traditional real estate-related policy has shifted, and the creative solutions being developed by dedicated CRE firms and professionals. Follow along with us as we look at the ways evolving policy will affect your business in the future.


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