CRE Charm School with MBA’s Mike Flood

On today's episode of Three in 30, we're enrolling in CRE Charm School with MBA's Mike Flood. Join us as we get the crash course on what's happening in Washington, the impact on CRE, and what you can do about it.
Gonna have a three-ring circus someday.
People will say it’s a fine one son,
But until I get it, I’ll do my thing
With government. It’s got three rings.

Recognize these lyrics? If you’re not a die-hard fan of Schoolhouse Rock, these probably aren’t going to jump out at you, but if the words resonate – you’re not alone. Sure, Washington might be missing the lions, tigers, and bearded ladies, but some of the headlines over the last few years look more akin to the contents of a gossip rag than anything you’d expect to see coming from government.

With congress so deeply divided (and with our two parties hellbent on obstructing one another), it’s hard not to lose faith that anything will ever move forward. This episode of Three in 30, Mark Almeida asks the question on all of our lips: “we’re going to ignore Washington – is that the wrong approach?” Who better to give an answer than the man we’ve dubbed as the “Original Washington Insider”, Mike Flood. Today, Mike is the Senior Vice President of the Mortgage Bankers Association, but he started his career on the frontlines of D.C. as a legislative clerk for the House of Representatives and he’s been on the scene ever since then. 

In our conversation with Mike, we dive in head first to find out how current policy is impacting commercial real estate, what he’s hearing from members, and to explore why congress behaves the way it does (and what we can control when things seem out of control). 

Listen to the full episode below, or continue reading for a quick skim of the highlights.

A house divided…

Regulators aren’t exactly known for being movers and shakers, but according to Mike, it’s the regulatory bodies that are at the epicenter of all the action in Washington. 

Mark was quick to address the elephant (pun not intended) in the room: that with our political parties moving further away from each other, less and less seems to get done – and whatever actually gets accomplished is just as quickly undone in a never ending power struggle.  

“I think when it comes to the parties coming together, that is more difficult now, and you can clearly see it in the papers. However, and I will say, it is more difficult when it comes to congress but easier when it comes to regulatory bodies. What has happened is more of a transfer of where you can have the debate on how to get things done. That doesn’t mean that congress doesn’t want to do big things, it’s just that the parties have a tougher time getting along.”

So, what can we do?

“Remember the most important thing we can do is talk to our congress people directly. The reason for that is, they want a reason to vote for something. It’s one thing for people like me to support a bill, but when they can go back to their district and say, “Hey, I have Berkadia…” or “Hey, I have Wells Fargo ” and this is good for that business… then that’s a hugely helpful thing because now they’re talking about their district and not some ethereal thing. At MBA, we have a grassroots effort that takes the positive part of what we’re supporting, you hit a button, and it sends a letter to your congressman and all of a sudden there are 80 thousand letters coming from their district. 

The one most important thing you can do, is when you have an issue…send a note to your congressman. They actually read them.” 

Now, if this doesn’t give you the “warm and fuzzies”, we don’t know what will. Write your favorite brand and you’re likely to get a reply signed by Mr. ChatBot. Write your local politician and he’ll read it over his morning cup of coffee. How wholesome is that?

A message to the cynics:

Bah humbug! Boy, is it easy (and dare we say, even a little addictive) to pile on to the negative discourse these days. Rather than write off our political system as totaled and suited for scrap parts, Mike sets the record (and our attitudes) straight. 

“Let’s start out with the basic fact that we all forget (because we all want change unless it’s the change we don’t want): Our government is set up to move slowly. Always has been. It’s actually set up to stop most things from happening instead of making them happen. We’re in a tough period in history but this isn’t the first time. Clearly, I am going to side with those saying you should still be paying attention, but let me give you the reasons why. At the end of the day, if congress is divided as it is now – you’re right. Nothing is going to get done. That’s true and not true. It might be true from a major legislative standpoint, but it’s not true from a regulatory standpoint. 

The regulatory bodies are still appointed by the president. So therefore his agenda will move forward. Can congress interfere? To a point, yes, but if you think about financial regulators, most of them are paid from assessments on the financial institutions on purpose so they cannot be starved by congress through appropriations and they can act independently. So I would say it’s the opposite. Now is the time to have data and facts because the people who are going to pay attention to that are the regulators. They do not have to wait for congress. They will move forward whether we’re paying attention or not.”

You heard the man. Keep your eyes peeled. 

The upside on downtown

Mike was made for politics. Without an endless well of positivity, it’s hard to imagine that the constant litany of bad news wouldn’t swallow you whole. While the world tries to make its mind up about hybrid work, Mike is focused on the grassroots movements that are innovating around the problem: 

“I think more people than not believe that hybrid work is here to stay, so what does that mean? If I do my basic layman’s math…let’s pretend it’s three days in and two days out. And let’s think of the downtown office space. That means the entire ecosystem around that office has to figure out how to survive on 60% of the revenue it had. Cleaners. Restaurants. Parking garages. You name it. I think we’re starting to see where the innovation comes in. The mayor of DC is challenging president Biden to send every government worker back to the office. Clearly, that doesn’t appear to be happening. So she’s now trying to work with builders to convert office space into affordable housing. You see the city starting to find ways to reinvigorate their own downtowns. I see the innovation at the city levels through the mayors. That innovation will boil up.”

Last but not least, a word on tech:

Are we biased? You bet. But the point made here is salient no less. Mike tells us succinctly why technology is climbing to the top of the list of priorities at MBA – and throughout its constituency. 

“Technology, technology, technology. How do we know what’s coming down the pipeline and what we have to pay attention to? If we’re doing all of this, how do we automate it so we can get more efficient about what we do?” 

If you’re not first your last. 😉

That’s a wrap on the highlights from the episode, but if you still haven’t had your fill on US Politics, here’s Mike’s recommendation for your nightstand: 

Tip O’Neill All Politics is local: It’s an old book. It’s probably 150 pages. But it explains why congress works the way it does.” Alexa, add to cart. 

Listen to the full episode here.

Lindsay Curry | Head of Marketing

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