As A Government Shutdown Looms, Here's How CRE Could Be Impacted
With the federal government heading toward a possible shutdown ahead of the holidays, it could spell trouble for travel and a range of federal services that impact the economy and the real estate industry.
The situation has become dire late this week as the House of Representatives needs to pass its stopgap spending bill by midnight on Friday. House leaders were close to passing a bill on Wednesday before President-elect Donald Trump and influential billionaire Elon Musk publicly opposed the bill, leading many Republicans to follow suit.
The House rejected a new Republican proposal Thursday, with nearly all of the Democrats and 38 Republicans turning it down, The New York Times reported. Some of the biggest issues are the debt ceiling and various funding priorities tacked onto the bill as a last-ditch effort before the New Year.
One of the most immediate impacts of a government shutdown would be on the Transportation Security Administration, which employs 62,000 employees — 59,000 of them are considered essential and would work without pay if a shutdown were to occur, the TSA says.
Heading into a busy holiday season, this could impact travel with TSA Administrator David Pskoske warning "Please be aware that an extended shutdown could mean longer wait times at airports," Yahoo Finance reported.
If the shutdown were to continue through next week and into January, it would have wide-ranging impacts on the 2 million employees who work for the federal government and on the work they do that affects the economy and real estate industry.
Potential closures during the shutdown would include national parks ranging from scenic parks across the country to the Lincoln Memorial and National Zoo in Washington, D.C.
A government shutdown can impact the flow of funding from the Department of Transportation and other agencies that fuel infrastructure construction, which would lead to project delays.
Regulators that oversee the real estate industry, including the Securities and Exchange Commission, the Commodity Futures Trading Commission and the Federal Trade Commission, would see a majority of their staff furloughed during a shutdown, according to Yahoo Finance. And taxpayer services through the Internal Revenue Service would be suspended.
The processing of loans from the Department of Housing and Urban Development and the Federal Housing Administration would be slowed during a shutdown as well. Business loans from the Small Business Administration would also be slowed, and companies that rely on contracts from the federal government could be hurt.
Other interruptions to services include federal programs that oversee food assistance and healthcare for the poor. Even the transition of power from President Joe Biden to Trump could be impacted by a shutdown.
