What Trump's Flurry Of Climate Actions Could Mean For Commercial Real Estate
During his first two weeks in office, President Donald Trump made good on promises to roll back his predecessor’s climate policy initiatives via a series of executive orders.
Some in the relentlessly optimistic commercial real estate sector don't expect these rollbacks to make more than a minimal difference to their day-to-day. Others said the executive orders threaten the industry’s long-term future. But all agree the final outcome of the actions is far from certain.
“I think we're going to see litigation on many aspects of climate requirements, climate law,” said Sairah Burki, managing director of the CRE Finance Council and head of the trade association’s regulatory affairs and sustainability group. “I think the courts will be very, very busy.”

At the end of his first week back in the White House, Trump signed multiple executive orders targeting climate initiatives championed by former President Joe Biden. Among them were measures to undo the federal pause on oil and natural gas leasing on public lands, suspend the distribution of billions of dollars worth of government funding for electric vehicle charging stations, and withdraw the U.S. from the Paris Agreement for a second time.
While none of the flurry of orders directly targeted the commercial real estate industry, plenty of these orders will impact its work. They range from pulling back from commitments to wind energy, which companies including Time Equities have invested in developing, to leaving $9B in rebates and grants for residential buildings to achieve energy efficiency in the lurch.
Many in the industry feel that the breakneck pace of executive orders, legislative announcements and lawsuits is too chaotic an environment to make decisions in.
“Things are happening so fast in the Trump administration right now that I think many are in a ‘wait-and-see’ approach and not making any decisions to kill projects yet,” said YuhTyng Patka, a partner at law firm Adler & Stachenfeld and chair of the firm’s NYC Climate Mobilization Act Task Force.
Laurie Schoeman served under Biden until last month as senior adviser on climate risk, resilience, housing and urban policy. The former Enterprise Community Partners executive said an order that could cause significant harm is Trump’s revocation of Executive Order 14030, doing away with the Federal Flood Risk Management Standard.
The FFRMS stipulated that if the federal government is funding any construction on a flood plain, whether the risk comes from an ocean, a river, or any other body of water, those projects have to meet a standard that means they can withstand likely flooding.
“It’s a commonsense policy. It means don't build in areas that are prone to flooding, and use federal money, without taking stock of its ability to withstand that risk,” Schoeman said.
Both the Department of Housing and Urban Development and the Federal Emergency Management Agency established rules for adopting FFRMS last year, meaning that without legislative action, rebuilding efforts after extreme weather events should still follow the FFRMS’ standards, according to climate advocacy group the Natural Resource Defense Council.
But that isn't true for most of the other federal agencies tasked with carrying out construction efforts as part of the Inflation Reduction Act of 2022. The Trump administration’s revocation of FFRMS means taxpayer dollars could be funneled to projects that are at heightened risk of flood damage, Schoeman said.
Additionally, the executive orders are taking place against a backdrop of existing litigation against sustainability-focused regulation. The court system will likely also play a role in what climate legislation sticks.
Burki, who said she sees emails about Republican attorneys general suing over environmental issues in her inbox “almost every day,” believes that some fundamental climate legislation and policy measures will be killed in court.
And while environmental laws are being tested in courts across the country, Burki has her eye on one in particular: the rule that the Securities and Exchange Commission approved last March requiring some public companies to report their climate risk and greenhouse gas emissions. The SEC voluntarily paused the rule after 10 Republican-led states sued to stop it from taking effect.
“It’s now held up in court,” Burki said. “It's probably in one way, shape or form effectively dead.”
The uncertainty doesn’t necessarily mean paralysis for the CRE industry, because a critical piece of the industry has increasing power to dictate what gets built and where.
“I think what's going to keep us moving is insurance risk,” Schoeman said.
Insurance is already hard to come by for U.S. homeowners in areas prone to extreme weather events, which have been exacerbated by climate change. For some developers, the cost of insurance in the past few years has forced them to reconsider and even pull back from certain regions.
Commercial owners’ inability to get good deals on insurance has been killing deals in Florida for years, leaving some property owners facing insurance costs 400% higher than they were a decade ago.

In California, another market eschewed by insurers due to climate risk, the lack of competition among insurance companies means high premiums could delay rebuilding after this month’s record wildfires.
“We've been avoiding coastal areas, not just [for] development but also as far as new acquisitions,” said Elena Lebensbaum, director of sustainability at Time Equities. “It's driven by insurance costs in the flood zone, and I don't think they're going to be decreased.”
But waterfront developments continue to appeal to buyers, with everything from estates to apartment towers and development sites with waterfront access routinely breaking record sales prices all over the U.S.
In those cases, developers will have to invest more of their own money into resiliency on a building-by-building basis rather than relying on federal subsidies, grants or tax credits to get them there, CREFC’s Burki said.
“From the resilience side, if developers, owners are interested in continuing to build in certain areas, they will have to adapt their properties so that they're able to get insurance,” she said. “I think that's not a political issue. I think, more on the building electrification, energy-efficiency side of things — I see that as being more vulnerable to changes in regulation and incentives.”
Developers and building sustainability consultants told Bisnow that building owners are often motivated to embark on energy-efficiency projects by their own bottom lines, mostly doing so on a building-by-building basis.
“Generally speaking, sustainability is not political,” Lebensbaum said. “You're making sure you save money for the building, and by doing this, you also make it good for the environment by reducing greenhouse gas emissions.”
Building-level retrofits are often also subsidized by either state or utility incentive programs, which are unlikely to change in response to federal legislation, she added.
Under the first Trump administration, in the absence of federal support for climate goals, local and state governments introduced landmark climate regulations, like New York’s 2019 Climate Mobilization Act. In 2018, legislatures in seven states, including New York, also kicked off initiatives to introduce carbon pricing, a mechanism that puts a price tag on emissions and asks the companies responsible for them to pay.
There are signs that history may repeat itself. In Oregon, legislative battles to introduce carbon pricing that kicked off during the first Trump administration and were eventually shot down by courts were revived just weeks after November’s presidential election.
But some places are already looking at cutting back in response to federal shifts. In Maryland, Gov. Wes Moore said in early January that the state’s environmental programs that had been counting on federal cash may be part of a $2B budget cut.
“We’re not going to balance our budget on the environment,” he told The Washington Post.
Christopher Cayten, a principal at CodeGreen, said that while Democrat-led states largely introduced climate measures during the first Trump administration, sustainability may remain a focus for developers in Republican-led states this time around because of the role that international investors have in U.S. commercial real estate.

“That overseas money is still just as focused on energy efficiency, reducing carbon footprints, even kind of climate resilience planning — all of these things that, say, the IRA did fund,” he said. “If any of that gets pulled back, the real estate developers and owners that have made commitments to those overseas investors, they've got to stick to them.”
Climate scientists say that reducing carbon emissions to meet a target of net-zero emissions by 2050 — the aim of the Paris Agreement — will help the world avoid widespread displacement as extreme droughts, heat waves and flooding change where humans can survive.
But the commercial real estate industry is unlikely to commit to broader sustainability goals unless forced: A 2023 Bisnow investigation found the sector’s biggest companies by and large only set targets to reduce emissions in response to regulation.
The current regulatory direction indicates that important legislation for reducing carbon emissions beyond the Inflation Reduction Act is at risk. The Infrastructure Investment and Jobs Act of 2021, which funds programs aimed at adaptation and resilience for infrastructure and housing, is up for renewal and expires in 2026.
Although aimed at creating jobs by upgrading infrastructure for transportation, clean water and energy, and broadband access, the IIJA also created opportunities for owners and developers across asset classes — including multifamily, where owners could leverage federal dollars to build housing close to transit. But Elizabeth Velez, president of second-generation New York-based construction firm the Velez Organization, isn’t hopeful for the program’s future.
“We probably know where that is going to go with the Trump administration's current focus on stripping away all of these amazing, critical programs,” she said.