By DANIELLE FINLEY

Associate Director of Political Engagement

As the United States anticipates changes in national and local governance following the presidential election, the real estate industry is paying close attention to policy shifts that could shape its future. While campaign promises often capture headlines, the actual impact on real estate comes through legislative actions that follow. Here, we explore several key areas poised for potential change: the Tax Cut and Jobs Act (TCJA), State and Local Tax (SALT) deductions, association healthcare, and housing priorities at the local level, particularly in Northern Virginia’s Alexandria and Arlington areas.

Revisiting the Tax Cut and Jobs Act (TCJA)

The TCJA, signed into law in 2017, significantly altered the tax landscape and included provisions with major implications for real estate. The Act introduced a higher standard deduction and a cap on mortgage interest deductions, changes that influenced buyer affordability and home ownership incentives. Should lawmakers revisit the TCJA, potential adjustments could either alleviate or intensify the impacts of these provisions on the real estate market.

A re-evaluation of mortgage interest deductions or an increase in the standard deduction would impact purchasing power and home affordability, particularly in high-cost regions. Buyers and sellers alike would need to keep an eye on any proposed changes, as they could directly affect tax liability, and the appeal of homeownership compared to renting. For real estate professionals, understanding the implications of potential modifications to the TCJA is crucial in advising clients effectively.

State and Local Tax (SALT) Deductions

The SALT deduction cap, introduced as part of the TCJA, limits the amount taxpayers can deduct for state and local taxes to $10,000. This cap has been particularly challenging for homeowners in high-tax areas, such as Northern Virginia, who may face higher overall tax burdens without a larger deduction.

Many in the real estate industry, especially in areas like Alexandria, Arlington, and Fairfax County, have advocated for the cap’s repeal or increase, arguing that it could make homeownership more affordable and attractive in areas with high property and income taxes. While the current Congress has debated potential adjustments to the SALT cap, a shift in administration or a different balance of power in Congress could determine whether these adjustments move forward. Homebuyers and property owners in these areas should stay informed on legislative developments, as changes to SALT deductions could levy or reduce their tax burden and influence upward housing demand.

Association Healthcare in a Republican-Controlled House

The real estate sector often comprises small businesses, self-employed individuals, and independent contractors, many of whom lack access to employer-sponsored health insurance. Association healthcare plans, which could allow associations to offer health insurance to their members, remains a pressing issue for the industry.

While recent years have seen ping-pong policy discussions between two administrations around expanding and rescinding access to association healthcare (amending the Employee Retirement Income Security Act [ERISA] definition of qualifying employers) at the Department of Labor (DOL), changes have been limited. However, with a Republican-controlled House, the industry could see a renewed push for legislation supporting association health plans. Such changes could give Realtors® and other real estate professionals access to more affordable and expanded healthcare options, enhancing financial security, and perhaps reduce high-cost barriers to entry into the industry beyond just security, but includes greater access for those who have a lifelong or impacting health issue within the family that working in the real estate industry could provide the necessary flexibility for.

Any Congressional or Federal administrative action on the Affordable Care Act and association health plans could resurrect the program here in Virginia which was passed and signed into law by the Governor after many years of successful advocacy. For current and prospective agents, this potential change could lead to more stable and accessible healthcare options, positively impacting the workforce and encouraging more individuals to consider careers in real estate.

Local Housing Priorities in Alexandria and Arlington, Virginia

On a more local level, Alexandria and Arlington have placed housing issues at the center of the recent election, with elected officials prioritizing finding solutions to the region's pressing affordability challenges. Alexandria has seen significant discussion around affordable housing initiatives aimed at providing a range of housing options for all income levels, while Arlington continues its debate on the "expanded housing options" issue, which focuses on increasing housing density to create more affordable options.

Elected officials in Alexandria are likely to focus on policies that encourage diverse affordable housing developments and preserve existing affordable units found in the city’s 2040 Housing Master Plan. This includes zoning regulations, incentives for developers, and public-private partnerships designed to address the city’s growing housing demand. For Arlington, the expanded housing options policy — aimed at creating more duplexes, townhomes, and smaller multifamily units — could be revisited following legal action rolling back the program, given recent public interest and debate. Such policies would likely impact housing availability and accessibility, with implications for pricing, community development, and demographic diversity. For real estate professionals, staying engaged with local government actions in Alexandria and Arlington will be crucial. Local policy changes in zoning, density, and affordability initiatives can shift market dynamics and affect property values, housing availability, and investment opportunities.

NVAR is Looking Out for You

As the political landscape evolves post-election, the real estate industry faces a consort of potential policy shifts and continued legislative debates that could reshape its future. From national issues like the TCJA and SALT deduction caps to local priorities around affordable housing and the “missing middle,” NVAR will keep you informed on these policies that will shape housing affordability, accessibility, and industry stability.

Whether through national legislation or local policy adjustments, these developments are likely to impact housing demand, property values, and access to vital resources for real estate professionals. The outcome of these legislative actions could ultimately define a path forward for the industry, making informed advocacy and proactive engagement with policymakers essential for those navigating the future of real estate. NVAR continues to be your voice in advocacy.