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August 29, 2011
With all the recent political attention focused on Washington and the debt ceiling talks, it is easy to be distracted from a number of decisions that are being made in the states that will be key to the future make-up of Congress, not just in 2013, but for the next decade.
Lines are being drawn in every state to create new Congressional districts consistent with the most recent U.S. Census Bureau data. Once the proposed maps are approved, they will be become law and operative for the next ten years. For many Members of Congress, what is happening in state capitals now may have more impact on their future political plans than any plan put forward by the newly-created Super Congressional Committee to deal with the federal budget deficit.
Twenty four states have completed their redistricting process, including the seven At-Large states (one single representative), with 14 more states scheduled to conclude their discussions by the end of this year. Eight states will lose one congressional seat (Iowa, Illinois, Louisiana, Massachusetts, Michigan, Missouri, New Jersey, and Pennsylvania) with the populous states of New York and Ohio losing two House seats. Six states will gain one seat (Arizona, Georgia, Nevada, South Carolina, Utah, and Washington) with Florida adding two seats and Texas being the big winner and gaining four new Members of Congress.
Historically, the political party that is responsible for drawing lines for the most congressional seats utilizes that opportunity to create new favorable districts that will increase its numbers in Congress. Last year’s historic gains by Republicans was also reflected with sweeping gains in statehouses, giving the GOP an unprecedented advantage in the redistricting process. In fact, Republican-led legislatures control the drawing process for 200 existing congressional seats compared to 47 legislatures led by Democrat majorities. Specially-formed commissions are drawing the lines for 92 seats, 87 are under divided legislature control with the remaining 7 At-Large seats not affected by the redistricting process.
The elimination of congressional seats will force existing Members of Congress to take extraordinary steps to remain in Congress. Rep. Dennis Kucinich (D-Ohio), for example, has been investigating moving to Washington to run for Congress should the district he has served for 15 years be redrawn or eliminated. At the same time, several California Representatives have indicated they will physically move within California to run in a district whose political population is more favorable for them.
In several newly-drawn districts, incumbent Members of Congress will likely face each other for the right to stay in Congress. Some of the more notable situations will occur in Louisiana between two Republicans (Reps. Charles Boustany and Jeff Landry), in a pure toss-up in Iowa between Reps. Leonard Boswell (D) and Tom Latham (R), and in Michigan between Democrats Reps. Sander Levin and Gary Peters. Rep. Russ Carnahan (D-Missouri) will likely need to decide between running in an upcoming open seat in Missouri or challenge a fellow Democrat in another Missouri district, either option that may not be good for him.
So, based on the states where districts will be won and lost, where are the opportunities for pick-ups for both parties that redistricting might help influence? At this stage, it appears that Democrats may have opportunities to pick up seats in Illinois (3-5 seats), California (3-4 seats) and Maryland. On the other side of the ledger, Republicans may add seats in North Carolina (3-4 seats), Texas (3 seats), Indiana (2 seats), Georgia, South Carolina and Utah.
However, most congressional watchers agree that because Republicans won so many seats in last year's elections, there are not that many seats left to change hands through redistricting. Since Republicans appear unable to redistrict their opponents out of office this time around, their thinking will be focused on strengthening the make-up of existing GOP-held districts by adding Republican precincts and voters in order to cement, and thus maintain, their current advantage in Congress. For example, of the 66 House Republicans who received less than 55 percent of the vote in 2010, almost half of them are from states where Republicans completely control the redistricting process. This shift in the GOP's thinking on redistricting should result in many Republican House members, especially a number of the 87 freshmen, viewed as being vulnerable finding themselves in safer seats.
For several GOP members, like Reps. Sean Duffy (Wisconsin), Tim Walberg (Michigan), and Thaddeus McCotter (Michigan), this will translate into their districts moving from a less than 50 percent GOP voting district to a district that is 3-5 percentage points more Republican-leaning. And those Members whose districts have just been marginally Republican in past elections and have produced tight reelection results - especially in Ohio (Reps. Pat Tiberi, Steve Chabot and Steve Stivers) and Pennsylvania (Reps. Charles Dent, Jim Gerlach and Pat Meehan) - will see an influx of Republican voters added to their districts by the same percentage points. Even House Budget Committee chairman Rep. Paul Ryan (Wisconsin), the author of the controversial House GOP budget plan, who has had close races in the past and may receive a serious challenge next time, should receive the arrival of more Republican voting precincts in his district that will lessen his reelection concerns next year and in the future. In this manner Republicans hope to maintain, not necessarily increase, their current number of 240 seats in the House - a higher number for them than anytime since 1946.
When all is said and done, the likely outcome from this year’s redistricting exercise will be a net gain of plus or minus 1 seat for either party. And, while no one knows from which direction the political winds will blow next year, the potential reduction of Democrat seats that will occur from the Census coupled with a shift in the Republican redistricting strategy of helping their most vulnerable, increases the degree of difficulty for Democrats to reclaim control of the House in 2012. If Republicans are as successful this year as they hope with their revised plans for redistricting, their control of the U.S. House of Representatives could continue well into the decade.
Obviously, NAREIT has no involvement in the determination of where the lines for congressional districts are being drawn. We will, however, continue to monitor developments in this area with the goal of supporting incumbent Members of Congress in next year’s races based on their support of REITs and the publicly traded real estate industry, and not on the district, new or old, they may soon be representing.
These Members of Congress, and their staffs, recently accepted an invitation from NAREIT members to visit a REIT property located in their state or district. During the majority of these visits, the host company provided a briefing about the company and its operations, the impact the property provides to the local economy, and a general summary of the state of the industry. NAREIT staff also attended the visit and briefly discussed several legislative issues currently being pursued before Congress. These issues included reform of the Foreign Investment in Real Property Tax Act or FIRPTA, introduction of the US REIT Act to make minor modifications in the REIT rules, and efforts to achieve greater tax fairness from internet commerce. NAREIT appreciates the willingness of our members to host Members of Congress and educate them about REITs and what the industry is doing at the local level. To find out more information on how participate in NAREIT's grassroots program, please contact Leah Cohen at lcohen@nareit.com or (202) 739-9436.
Jan. 14, 2011: Rep. Henry Waxman (D-CA) (center), Ranking Member of the House Energy and Commerce Committee, met with Dana Anderson, Vice Chairman (right), and Kenneth Gillett, Senior Vice President, Property Management (left), of Macerich, at his district office in Los Angeles, CA.
Jan. 19, 2011: Sen. Mark Udall (D-CO) (center) visited ProLogis' Headquarters in Denver, CO and met with (left to right) Steven Szymanski, SVP, Tax; Edward Nekritz, General Counsel; Walt Rakowich, CEO and William Sullivan, CFO.
Jan. 21, 2011: Rep. Ron Kind (D-WI) (left), Member of the House Ways and Means Committee, met with Ed Glickman, President and COO, PREIT (right) at the Valley View Mall in La Crosse, WI.
Feb. 4, 2011: Rep. Brad Miller (D-NC) (center) visited Regency Center's Market at Colonnade, a LEED certified shopping center in Raleigh, NC, that opened this past March. Chris Widmayer, Regency's Vice President of Investments (left), and Paul Muñana, Senior Manager of Investments, attended the meeting.
Feb. 7, 2011: Rep. Randy Neugebauer (R-TX), second from right, visited Macerich's South Plains Mall in Lubbock, Texas, and visited with (left to right) Robert Kirk, Vice President, Central Property Group; Jack Boyster, Senior Manager, South Plains Mall; and Don Pott, Vice President, Central Property Group.
March 21, 2011: Mick Krieger, Chief of Staff to House Speaker John Boehner (R-OH), second from right, and Ryan Day, Rep. Boehner’s District Director, second from left, toured Simon’s Cincinnati Premium Outlets in Monroe, OH, and visited with (left to right) Lewis Taulbee, General Manager, Premium Outlets; Mary Ann Mattscheck, Assistant General Manager, Premium Outlets; and Steve Cupelli, Regional Vice President, Premium Outlets.
March 23, 2011: Rep. Steve Rothman (D-NJ) (left) participated in the groundbreaking of AvalonBay's Avalon at Wesmont Station in Wood-Ridge, New Jersey. Also present at the groundbreaking were (second from left to right) Paul Sarlo, Mayor of Wood-Ridge; Ron Ladell, AvalonBay's Vice President of Development and Ralph Zucker, President of Somerset Development, AvalonBay's partner on this project.
March 31, 2011: Steve Tanger, President & CEO, Tanger Outlets, (second from right), is pictured with representatives of South Carolina’s Congressional Delegation at the recent grand opening and ribbon cutting celebration of the Tanger Outlet 1 in Hilton Head, SC. Pictured with Mr. Tanger is (left to right) Bill Tuten, Low Country Regional Director, Sen. Lindsey Graham (R-SC); Cris Steele, Special Assistant, Rep. Joe Wilson (R-SC); and Ian Headley, Regional Director, Sen. Jim DeMint (R-SC). In addition, attending the opening ceremonies were South Carolina Gov. Nikki Haley and many other state and local elected officials.
May 17, 2011: Rep. Nan Hayworth (R-NY), center, visited the Greenwich, CT headquarters of Urstadt Biddle Properties. She is pictured with Urstadt Biddle’s senior executives, including (left to right) Thomas D. Myers, Executive Vice President; Linda Lacey, Senior Vice President; Charles J. Urdstadt, Chairman and CEO; Willing J. Biddle, President and COO; John T. Hayes, Senior Vice President; and Don Scott, Rep. Hayworth’s District Director.
June 29, 2011: Rep. Joe Courtney (D-CT) (left), Governor Dannel Malloy (D-CT) (center), and Thomas Trubiana, Chief Investment Officer, Education Realty Trust, commemorated the ceremonial groundbreaking of Storrs Center, a new development that will serve as a mixed-use town center and main street corridor for the Town of Mansfield, and the University of Connecticut.
July 11, 2011: Rep. Cory Gardner (R-CO) (center) met at Prologis’ Headquarters in Denver with the CEO’s of several CO-based REITs. Pictured with Rep. Gardner are (left to right) Terry Considine, Chairman, President and CEO, AIMCO; Tom Toomey, President and CEO, UDR, Inc.; Scot Sellers, CEO, Archstone; and Walt Rakowich, CEO, ProLogis.
August 18, 2011: Rep. Mike Pompeo (R-KS) left, visited Simon Property Group's Towne East Square in Wichita, KS, and met with Mike Payton, area mall manager.
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