Here are eight key areas where policy shifts might be felt:

1. Opportunity Zones Revival

The Opportunity Zone (OZ) program, which has driven over $75 billion in investments since its inception in 2017, could see renewed attention. Trump has proposed extending the program beyond its 2026 expiration and potentially expanding its scope. Investors are already gearing up to take advantage of tax deferrals and benefits in economically distressed areas.

2. Federal Return-to-Office Mandate

Trump has ordered federal employees to return to full-time office work, impacting nearly two million workers. This could increase demand for government leases, especially in Washington, D.C. However, labor unions are gearing up to challenge the mandate. Complicating the picture, a new initiative under Elon Musk’s Department of Government Efficiency aims to reduce federal office space, which could temper CRE growth in the capital.

3. Cuts to DEI Policies

Trump has eliminated diversity, equity, and inclusion (DEI) policies across federal agencies, signaling a shift in government hiring practices. While this could affect federal contracts, most CRE firms are likely to maintain their DEI commitments to meet public expectations and workforce demands.

4. Housing Affordability Initiatives

Scott Turner, Trump’s pick for HUD Secretary, is focusing on reducing regulatory hurdles rather than increasing budgets for affordable housing. Recent HUD changes, like raising loan-to-value limits to 90% for affordable housing projects, aim to provide developers with more financial flexibility. Local governments will retain control over zoning decisions, avoiding federal intervention.

5. Tariffs and Construction Costs

Trump plans to impose steep tariffs—25% on goods from Mexico and Canada and 60% on Chinese imports. While these policies might bolster U.S. manufacturing and industrial real estate, they could also lead to higher construction costs, particularly for steel and lumber. Developers relying on imported materials may face increased project budgets and extended timelines.

6. Privatization of GSEs

Trump has proposed privatizing Fannie Mae and Freddie Mac, which currently back about 50% of all U.S. mortgages. While this move could reduce government involvement, federal guarantees may still be necessary to stabilize the secondary mortgage market, especially for multifamily projects.

7. Climate Policy Rollbacks

Trump has once again withdrawn the U.S. from the Paris Agreement and rolled back federal climate regulations, arguing they increase business costs. These changes may reduce compliance burdens for developers, but state and local sustainability mandates in markets like California and New York will continue driving demand for green retrofits and net-zero developments.

8. Streamlined Development Approvals

An executive order promises to expedite approvals for large-scale developments exceeding $1 billion, potentially shaving years off project timelines. While this could benefit major CRE developers, questions remain about the impact on environmental reviews and potential legal challenges under the National Environmental Policy Act (NEPA).

➥ Key Takeaway

Trump’s potential second term could inject momentum into certain CRE sectors, including Opportunity Zones, industrial spaces, and housing development. However, challenges such as rising construction costs, labor shortages, and global economic uncertainty could offset some of these benefits.