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Greetings, apartment industry advocates!
You ever see those posts on social media where someone calls out a past tweet or post as “not aging well?” I kind of feel that way in that my July letter to you noted how badly the President was doing and how the Democrats were struggling to get agreement around anything. What difference a month can make.
In a reversal of fortune, by the time Congress recessed for the August break, things on the legislative front had improved dramatically for President Biden. He secured passage of bipartisan bills bolstering the U.S. manufacture of semiconductors and expanding health care services for veterans. Then, out of nowhere, the Democrats agreed on a smaller version of the original “Build Back Better Act,” called the Inflation Reduction Act (IRA). This legislation lowers drug pricing for seniors, extends premium subsidies for the Affordable Care Act, reduces the deficit and makes historic investments in fighting climate change. This is a big win for the President’s base that no one saw coming. Not surprising since apparently only two people were writing it – Senate Majority Leader Chuck Schumer (D-NY) and Senator Joe Manchin (D-WV).
The original version of the IRA also had a provision to change the treatment of a “carried interest” in the tax code. While this was intended to help pay for the other elements of the legislation, truthfully, this is part of a 15-year campaign by progressive forces in Congress to put down the “babayaga” that is carried interest. In this version, they would have extended the hold period for a real estate asset to qualify for capital gains treatment to three years. In the end, Senator Kyrsten Sinema (D-AZ) got the proposal stricken from the bill. We greatly appreciate her leadership on this and the work of the Arizona Multifamily Association to alert her about the industry’s concerns.
The passage of the IRA may mark a turning point in the story of the 2022 midterm elections. Whereas just two months ago, everything was stacked against the President and Democrats and seemed to be getting worse, everything has changed. Now, significant doubt is being placed on the so-called “red-wave” of Republican victories that were anticipated in both the House and Senate.
The dramatic drop in gas prices, plus a string of significant legislative victories is certainly changing the dynamic; however, most impactful is the Supreme Court’s Dobbs decision that ended federal protections for abortion. This action by the U.S. Supreme Court created a groundswell of activism amongst pro-—choice voters (and hundreds of thousands of the newly registered). So far, this increased enthusiasm led to the defeat of a statewide ballot initiative in Kansas to tighten abortion restrictions and an upset victory by the Democrat in a special election in New York for the House of Representatives.
Democrats are leaning into the messaging on this, drawing the distinction between them and the near-total ban on abortions being sought by Republicans at the state level and being proposed by GOP members in the House. Meanwhile, Republicans see the risks here and are softening their language on the issue and even removing references to it altogether on campaign websites.
The final factor at play is the return of former President Trump to the center of media coverage. When he is out of the public eye, Republicans can focus on their campaign pitch to the nation without distraction. However, the FBI raid at Mar-a-lago, revelations about the removal of classified documents from the White House and the ensuing legal fight have returned President Trump to top-story status. Now, Republicans are spending much of their time defending him instead of making their case to the voters. Time is getting short as early voting opens in places like Arizona, California, Georgia and Ohio in October.
The midterm elections are going to be pivotal for the future of housing policy, and that is why NAA is introducing the Apartment Party; a new political perspective for the rental housing industry that transcends individual party affiliation. Regardless of your personal political views, as someone who works in the rental housing industry, it is essential that our industry speaks loudly and with a unified voice. You can read more about the Apartment Party here.
As a member of NAA and the Apartment Party, it is important that you are registered to vote. As part of our launch, NAA is pushing the #NAAVotes initiative to ensure that all NAA members are registered to vote in the upcoming November elections. Visit the NAA Votes campaign page to check your registration status and register to vote if you have not yet done so. NAA’s 92,000 members and their hundreds of thousands of employees can create a powerful voting bloc that lawmakers will take seriously.
Thanks for reading. Talk to you next month.
- Greg