What Real Estate Needs To Know Following The U.S. Midterm Elections
Here is what we know so far following Tuesday’s midterm elections:
— While the Republicans are still likely to take control of one or both houses of Congress, the predicted “red wave” never crested throughout the wee hours of election night — and it could take days for election officials to come to any definitive conclusions. Early Wednesday, control of Congress was still too close to call.
— While the narrow Democratic majority in Congress over the last two years cleared the way for significant investment into the country’s infrastructure and manufacturing — and a shift toward renewable energy — it also stymied President Joe Biden’s campaign promise to repeal CRE’s beloved carried interest loophole.
— If Republicans ultimately take control of one or both houses of Congress, it is unlikely they will continue to approve big-ticket legislation pitched by the Biden administration. A federal government divided along party lines could also be less responsive to a recession.
— Florida Gov. Ron DeSantis and Texas Gov. Greg Abbott decisively earned additional terms from voters — DeSantis’ second and Abbott’s third. During their re-election campaigns, both Republican governors made headlines within real estate circles for their staunch anti-ESG rhetoric.
— In Georgia, Republican Gov. Brian Kemp won a second term after once again holding off Democratic challenger Stacey Abrams. Kemp raked in donations from real estate players near and far.
— Maryland elected its first Black governor, Democrat Wes Moore. Despite being a political novice who has never held public office before, Moore drew significant real estate campaign donations.
— Maura Healey, in a change of power at the statehouse, won the Massachusetts governorship and became the first openly lesbian woman to hold the seat. Healey, a Democrat, was the preferred candidate of the real estate industry, which praised her housing policy.
— Pennsylvania voters chose Democrat Josh Shapiro as their next governor. The choice may determine whether abortion remains legal in the state, which could have an impact on economic development. For instance, Duolingo, an education technology company, had said pre-election it would relocate its headquarters out of Pennsylvania if the state outlawed abortion. But ahead of Election Day, Shapiro said that he would veto any state legislation that restricted access.
— Elsewhere in Pennsylvania, Democrat John Fetterman won the state's pivotal race for U.S. Senate, defeating TV personality Dr. Mehmet Oz. As of Wednesday morning, control of Pennsylvania’s state House remained up in the air, a relative surprise after over a decade of Republicans holding a vise grip on both houses. Combined with Shapiro’s win, a Democratic-majority House could result in more momentum for the legalization of recreational cannabis, which has now been passed in nearly every state that shares a border with Pennsylvania.
— Illinois Gov. J.B. Pritzker, a billionaire Democrat, also won a second term. Pritzker was lauded for his handling of rental assistance disbursement and the state’s eviction moratorium in the heyday of the pandemic.
— New York Gov. Kathy Hochul, a Democrat, defeated the real estate-backed Republican Lee Zeldin. Hochul’s $46M in campaign donations dwarfed her Republican challenger, but big-name CRE backers tried to close the gap amid accusations she was soft on crime.
— California handed Gov. Gavin Newsom, a Democrat, a second term. During his re-election campaign, Newsom opposed the Proposition 30 ballot measure, which would have levied a new tax to help fund the infrastructure that will support the state’s switch to electric vehicles. On Tuesday, voters also rejected the tax. The measure was seen by many as a corporate handout because Lyft put big dollars behind the proposal in a bid to subsidize the conversion of its fleet to electric.
— Democrat Jared Polis, who carried a double-digit lead heading into Election Day, won re-election in the Colorado governor’s race.
— Maryland and Missouri voted to legalize recreational marijuana use. Nineteen states and Washington, D.C., have already approved recreational use in the U.S., and an additional 18 already allow medical use. Legalization has largely been seen as an area of opportunity for the real estate industry, though capitalizing on it hasn’t been easy. North and South Dakota and Arkansas voters rejected legalization.
— Dallas voters approved a tax increase on hotel room rentals to help pay for a new convention center downtown.
— In Philadelphia, the four city council seats that opened up so their former holders could run for mayor all were won by Democrats hand-picked by the city’s party apparatus.
This story was last updated on Nov. 9 at 2:02 p.m. ET.
CORRECTION, NOV. 9, 1:57 P.M. ET: An earlier version of this story incorrectly said Proposition 30 had passed in California. It was rejected by voters.