WASHINGTON -- Real estate brokers, home builders, and mortgage bankers expect that Republican control of Congress will yield rich rewards for their industries.
Lobbyists at industry trade groups expect the change will present new opportunities to curtail government regulation, as well as gain key measures to boost business.
"We are looking for potential opportunities," said Robert Bannister, senior vice president of government affairs at the National Association of Home Builders.
"It's going to be a positive impact," said Stephen D. Driesler, senior vice president of government affairs at the National Association of Realtors.
Homebuilders and realty brokers are expecting Republicans to deliver on two key pieces of legislation.
The first is a cut in the capital gains tax (to possibly half the current 28% level), which would make real estate a more desirable investment and help both industries.
"On average, real estate investments [are] held longer than stocks," said Mr. Driesler.
"Over that time, inflation really drives up the value of that property, not in real dollars, but inflationary dollars," he said.
A cut in the capital gains tax would mean that investors could expect to keep more of their investment gains.
Mr. Bannister said he expects a capital gains tax cut would encourage investors to cash in on their gains. "It would be much more economically feasible to sell that land," he said, and "help moderate housing development costs."
The second gain the groups are expecting is a bill that would restrict the government's power to protect endangered species and wetlands on private land, and expand the rights of private property owners vis-a-vis the government.
On the negative side, Mr. Bannister said he is concerned that Republican talk of a "flat tax," which would involve eliminating the mortgage interest deduction, would have a "monumental" negative impact on his industry.
But Mr. Driesler said he does not expect a flat tax to be passed in the next two years.
For mortgage bankers, the Republican takeover means uncertainty on a key issue: the Federal Housing Administration's future.
The Mortgage Bankers Association, working with the powerful Realtor and home builder groups, failed to persuade a traditionally friendly Democratic Congress to expand the government housing program this year. Most FHA loans are made by mortgage bankers.
Now, Sharon Canavan, the association's deputy legislative counsel, said she expects Republicans will want a review of the program's purposes and fiscal soundness.
But like other housing groups, hers expects to make hay under Republican control. She said she expects the group will be willing to take a chance on readdressing laws that inflict hardship on the industry.
One example: truth-in-lending laws that require lenders to disclose all charges and fees associated with a mortgage.
The law involves "draconian remedies" for minor infractions, Ms. Canavan said, and should be reexamined.
