The FINANCIAL — The presidential election is over. Major media on all sides of the political spectrum agree that Joe Biden and Kamala Harris have won. No doubt there will be skirmishes ahead, but like Yorktown and Appomattox it’s time to move on.
“Whatever else they do, elections spur a lot of economic activity,” said Rick Sharga, Executive Vice President with RealtyTrac, a leading source of investor leads and real estate data. “According to OpenSecrets, some $11 billion will be spent this cycle to elect or defeat given candidates, about 50% more than in 2016.”
While $11 billion is a lot of cash it’s hardly the total tab. Every two years a bunch of money comes to the Washington metro area to pump up the local economy, much of it related to the purchase and sale of real estate.
Elections, it turns out, have very pragmatic consequences.
- Newly-minted senators and representatives are moving to Washington, while casualties of the current election cycle are making new plans.
- As senators and representatives play musical chairs so do their staffs. Some portion of the 9,200 staffers in the House and 5,200 in the Senate will move.
- In total, according to The Washington Post, a new Administration brings with it the ability to reward supporters with roughly 4,100 federal jobs in various executive departments and agencies.
- Most executive appointments are done deals made by transition teams, but the Political Appointee Tracker estimates that some1,200 government positions will require Senate confirmation. The majority of these candidates will fly through the system, in large part because individual senators don’t want to interview 1,200 job seekers at length.
Staying Put in DC
Once the votes are counted the moving plans begin. Those plans may not be what most people expect.
It costs a lot of money to live in DC. Congressional calendars are set up to limit time in Washington so politicians can go home and the result is that many elected officials don’t actually own real estate in the city. Instead, they rent, share townhouses and apartments, or – in some cases – sleep in their offices and shower in the House or Senate gyms.
However, many members of Congress – and many staffers and political appointees – have solid finances. They do own property back home and also in Washington. One of the benefits of sticking around is that DC-area real estate values tend to rise with some regularity. The typical DC property now sells for $645,000. A lot – obviously – sell for much more.
A lost election does not mean politicians move back home. Washington is filled with associations, lobbyists, think tanks, PR shops, and law firms that pay very well. It’s a nice place to live. K Street is enticing. As former members of Congress – even for one term – they’re part of the club.
An elected politician can become a lobbyist in a year (House) or two (Senate) after leaving office, the so-called “cooling off” period. In practice, it’s easy to evade lobbying limitations. According to a 2019 study by Public Citizen, “nearly two-thirds of recently retired or defeated U.S. lawmakers now working outside politics have landed jobs influencing federal policy, providing further evidence that members of Congress continue to spin through Washington’s revolving door at astonishing rates.”
A 2014 study by the Congressional Research Service shows that ex-senators and representatives have substantial lobbying advantages. In basic terms, they have access. They can go to places where those never elected can’t get admission, including good spots for informal, private, and off-the-record chats.
- Access to the floor of the chamber in which a former Member served.
- Access to House and Senate gyms.
- Access to House or Senate dining facilities.
- Access to Capitol Hill parking facilities.
Staffers & Political Appointees
Newly-unemployed congressional staffers and executive department appointees can pursue the usual private-sector options such as associations or lobbyists, shift to protected career positions in the executive departments, or catch on with newly-elected politicians because there’s a premium for DC experience. Capitol Hill salary, retirement and health benefits are exceptional so for many it pays to stay until an individual has the right combination of age and “credible service” for retirement.
Meanwhile, there’s an army of new folks coming to Washington. Imagine that a massive new business brings several thousand high-paying jobs to a small town. That’s DC. Every two years there’s a fairly predictable seller’s market in the City and its tony nearby suburbs because everyone wants to live well and commute as little as possible.
And now the 2020 election is over. What are elected officials, appointees, and staffers doing to prepare for 2022? Win or lose, you can bet that many are looking at local real estate ads in DC.