Four years ago, Donald Trump thrilled the real estate industry as he ascended to the White House, calling himself the “builder president” and promising a trillion dollars of infrastructure spending.
Since then, while his tax overhaul kept breaks for investors like himself, it stung home buyers in many states. The blitz of spending on public projects fizzled. The pandemic and languishing talks for stimulus left much of the industry struggling.
Now, a tally of contributions from real estate professionals shows more support for Democratic challenger Joe Biden than for re-electing a man who hails from the business. Entering the final stretch of this year’s race, an analysis by the Center for Responsive Politics shows Biden amassed $19.8 million from real estate professionals — about 19% more than Trump — burnishing his fundraising lead on the incumbent.
Longtime Trump friends have hung back. Developers Stephen Ross of Related Cos. and Howard Lorber of Vector Group, for example, gave a total of $300,000 to the Republican party and Trump after he got the nomination in 2016 — about 50% more than in this cycle through August.
Trump has been reluctant to press property pals to fund his campaigns. Of four known to have been at a White House party on election night in 2018 — Steven Witkoff, Richard LeFrak, Howard Lorber and Tom Barrack — Witkoff is the only one who’s significantly increased donations this round, more than quadrupling his giving to $930,000, federal records show.
Another exception to the pullback is California developer Geoffrey Palmer, a big city real estate mogul who like Trump followed his father into the business. Palmer, also like Trump, has extolled the power of depreciation to avoid paying income taxes.
Of the $16.7 million flowing from the real estate industry to the president’s campaign and related committees this cycle, more than a third, or $6.4 million, is from Palmer, who’s prominent in Los Angeles but less known nationally. Federal Election Commission records show he gave little to national political figures before Trump clinched the Republican nomination in May 2016, but his giving has exploded since then, reaching about $17 million.
Palmer has ramped up donations to Republicans facing the prospect of Democratic control of the White House, Senate and House. He’s contributed some $9.2 million to a slate of candidates and committees backing them for federal office. That places him among the nation’s top 25 campaign donors since the start of 2019, according to data analyzed by the Center for Responsive Politics.
Palmer didn’t respond to messages seeking comment on his support for Trump, and nor did representatives for Ross, Lorber and Witkoff about their shifts in giving.
“President Trump’s policies have made families’ lives better across the country, and voters continue to support him as he continues to deliver for them,” Republican National Committee spokesperson Mandi Merritt said in a statement. “From historic tax cuts to record job growth, Americans of all economic backgrounds are benefiting from the president’s winning policies, and enthusiasm is high as we enter the last few weeks of this election.”
Palmer has made no secret of his tax strategy. In a 2015 interview with trade publication the Planning Report, he boasted that “through the magic of depreciation, we haven’t paid federal taxes for the last 30 years.” Trump, a year later, announced “I love depreciation.”
Still, Trump vowed during his 2016 campaign to use his knowledge of taxes to make the system fairer for average Americans. That August, he said that would mean ending “special interest loopholes that have been so good for Wall Street investors and for people like me.” He said his tax plan would cut income taxes for everyone, especially middle-income Americans, but that “the rich will pay their fair share.”
Using depreciation to erase tax bills is a long-established practice in real estate investing. The tax code assumes structures such as offices and apartments lose some of their value every year they’re in use. Writedowns on that wear and tear can erase taxes on cash generated by a property, even if it gains market value during the period of investment, which has been the general long-term trend in many parts of the country.
Trump has used depreciation and other strategies to avoid paying income taxes for most of the past two decades, the New York Times reported last week. He paid only $750 the year he was elected president, and the same amount again his first year in office in 2017. Trump has broadly disputed the Times’s reporting but hasn’t specified how much he paid.
“I don’t want to pay tax,” Trump said at last week’s debate with Biden. “Like every other private person, unless they’re stupid, they go through the laws, and that’s what it is.”
How key players in the real estate industry have fared under Trump depends largely on where they do business. Trump’s 2017 tax overhaul, for example, capped the amount of state and local taxes that households can deduct from their federal income taxes and “appreciably harmed” New York, said Chris Mayer, a real estate professor at Columbia Business School. Still, developers have gained new benefits, including opportunity zones meant to reward investments in poor communities, said Mayer.
Perhaps most importantly, Trump didn’t disrupt strategies that property investors rely on most. “The real estate industry has enjoyed a lot of tax benefit for years,” Mayer said. “Even as Trump has changed other things, those benefits have largely remained intact.”
‘A Lot of Bad’
In other key areas Trump hasn’t delivered things property investors wanted. He didn’t make good on pledges for $1 trillion in infrastructure spending, and he’s withheld funds for New York’s $30 billion Gateway Rail Project. Such projects can benefit property investors by reinvigorating communities and opening up new areas for growth. The Trump administration is now playing hardball with Democrats who want to rescue strapped local and state governments hit hard by the pandemic.
In an August interview with the New York Times, Ross said he hosted a 2019 fundraiser for Trump because he was hoping to win more federal money for New York state. “I’ve known President Trump for a long time. I’ve known him and I’ve liked him. I don’t agree with a lot of his policies. I believe there’s a lot of good, and I believe there’s a lot of bad.”
He told the publication that he hadn’t decided whether he’d vote for Trump this November.
— With assistance by Noah Buhayar
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