For the real estate industry, beset with tax law changes,
uncertainties of interest rates and high vacancy rates - problems
which have only been compounded in the oil depressed regions of the
Southwest - only one thing is certain:
There will be no additional tax law changes until after the
presidential election in November.
"But what can we expect after a new president is elected?"
questions James B. Werle, a tax and development specialist with the
international accounting firm of Arthur Young & Co., which has an
Oklahoma City office.
Examining the party planks of George Bush and Michael Dukakis,
Werle sees no push for tax reforms or incentives that will help the
real estate industry. But both candidates "appear to have indicated
at least moderate support for real estate's `social credits' -
low-income housing and historic rehabilitation credits," he said.
"In order to initiate new programs or incentives, something else
will necessarily have to be taken away," he said, explaining that
the candidates, whose chief concern is balancing the budget, are
hard put to advocate tax reform measures that would require some
form of governmental support.
The concern for low-cost, adequate housing and historic
rehabilitation credits is a response to public pressure, he said.
Dukakis has selected "affordability of quality housing" as a
plank in his party's platform, indicating he would redirect defense
spending to fund programs, said Werle.
"Dukakis looks to the success of his home state in combining the
efforts of developers, trade unions and other members of the private
sector in programs with local government as a means of succeeding in
achieving this goal," he said.
But while the availability of low income housing is one of
Bush's platform planks, he has "not said word one" as to how he would
accomplish that aim, Werle said from Arthur Young's Florida offices
during a telephone interview on the second day of the Republican
"Bush has mentioned nothing in the way of affirmative action (he
would take)," Werle added. "So, I think we can expect his posture
to reflect the status quo of the Reagan administration."
Werle, himself a Republican, said he nevertheless saw the party
using "mom and apple pie" rhetoric and not attacking the specifics
of many issues, including real estate.
However, in crediting Dukakis with a concern for the rising cost
of constructing new homes, increases in rental rates and the
building industry's emphasis on "upper end luxury" homes in the
majority of states, Werle also pointed out that Dukakis is not
making promises he can't keep.
"Dukakis has learned from prior gubernatorial races that
promises are hard to keep and, therefore, is making few," said
Werle. "His programs are moderate and do not commit to increased
taxes or large spending programs."
Citing the possibilities that could occur if Dukakis enters the
White House, Werle said, "look to incentive programs for the lower
end of the residential real estate market (both multi-family and
single family) and status quo for the remainder of the market."
In the telephone interview, Werle also predicted that the
influence of Jesse Jackson will weigh heavily in low income housing
since that is one of "visionary" Jackson's favorite issues, and the
Democrats "will make concessions to him" in lieu of not nominating
him to the vice presidenial candidacy.
"If Bush is elected," Werle said, "expect him to pick up on
Reagan's recent statement that he wants to see a reduced capital
"Since it is likely Bush would have a Democratic Congress, tax
proposals for rate increases, changes in depreciation systems and
interest deductions and additional tightening of the passive loss
rules, can be expected with strong opposition for the rate
provisions of such proposals. …