Redirecting Real Estate Investment

Redirecting Real Estate Investment

How Changes in Immigration, Trade, Tax, and Other Policies Could Affect South Florida’s Real Estate Market

May 18, 2017 – Four Seasons Brickell Hotel

With a new administration in the White House and a change in the balance of power in Congress, impactful changes could be ahead for the country and South Florida’s business and real estate landscape. At CREW-Miami’s May luncheon, we heard from an expert panel of contributors including Mikki Canton, Chief Strategic Adviser to Miami Mayor Tomas Regalado; Peter Quinter, Esq., Chair of Customs and International Trade division at GrayRobinson; Brian Bandell, Senior Reporter at South Florida Business Journal; and Lourdes De Los Santos, CPA and Partner at Cherry Bekaert LLP. The panel was moderated by Tom Hudson, Vice President of News at WLRN Public Radio & Television. The monthly luncheon was sponsored by First American National Commercial Services.

Panelists discussed topics such as immigration reform and the EB-5 visa program, and the opportunities for foreign capital that changing trade policy may create. The panel also discussed potential effects of new tax policies and how the banking industry is likely to be affected by the rollback of the Dodd-Frank Wall Street Reform and Consumer Protection Act and other regulations.

Overall, the group agreed that despite the fraud and other complications that have riddled the EB-5 program in some markets, it has also generated positive economic impacts, said Mikki Canton. The EB-5 program was established by Congress to allow foreign investors to make a sizable investment in exchange for a residential visa. Because of the requirement that every $500,000 investment creates 10 jobs, the program has generated a lot of jobs in the local community, she shared. While there is one congressional push to end the program, there is another looking to reform it. While the panelists agreed that it would not be easy to abolish, they did acknowledge that any change at all could affect developers in our own backyard—Miami Worldcenter, Panorama Tower, and even some charter schools in Miami-Dade are using EB-5 funding.

Trade policy changes would have a major effect on our region as well, given Miami’s position as a major gateway for foreign trade. According to EnterpriseFlorida.com, the value of international trade through Miami’s port has nearly doubled over the last 10 years, which is why we’ve seen increased port activity and new warehouses popping up, resulting in more jobs in the region. If trade decreases as a result of national trade policy changes, that would mean fewer warehouses would be needed and workers to staff them. “We are talking about a trade war,” said Peter Quinter. Higher trade barriers mean higher tariffs, he added, which equates to less trade and that scenario would have a negative impact on the economy.

Ultimately, just as it will take action from Congress to make any substantial changes to the Dodd-Frank act, federal immigration and tax reform will also require congressional approval. Reporter Brian Bandell stressed how population growth at a local level is directly tied to international migration. “More people are leaving Miami for other parts of the US than are coming in,” he noted. Although, he says, that loss is counteracted by the continuous flow of internationals migrating to Miami, which is currently under threat by immigration policy changes the new administration is driving.

Federal policy changes over the coming months could significantly impact South Florida’s business and real estate, but for now the unknowns are many. Panelists were in agreement that monitoring steps taken by the new administration and Congress are the key to staying informed and ready to re-align business strategies as needed over the next six to 12 months and beyond.

For more photos of the May luncheon and panel, please visit CREW-Miami’s online gallery section.