The Hidden Cost of a Government Shutdown on Property Markets

• Data silence: The government shutdown threatens real estate by halting critical economic data.

• Power hungry: The new data center REIT Fermi made a splash with positive investor interest after its IPO.

• Take the stairs: New data showing reduced fire risk in new multifamily buildings pressures code changes requiring two stairwells.

• Multifamily webinar: Centralization is helping apartment owners cut costs, reduce risks, and improve resident experiences. Sign up

Editor’s Pick

The Hidden Cost of a Government Shutdown on Property Markets

It’s cliché to say real estate is a data business, but when government data stops flowing, the cliché becomes a crisis. The recent shutdown that shuttered key agencies and silenced economic releases has exposed just how fragile our decision-making is when the public data pipelines go dark. In real estate and lending, we lean so heavily on indices, employment metrics, rental reports, and construction stats that a blackout in those feeds ripples farther than you realize.

During the shutdown, critical releases from agencies like the Bureau of Labor Statistics and the Census will be delayed or suspended. That means no fresh unemployment rate, no new jobs data, no updated housing starts, no fresh measures of inflation or Consumer Price Index changes from the BLS, no new population updates, no updated household formation data. Without fresh data on how people move, get jobs, or build homes, real estate actors are flying blind. Lenders may pull or delay underwriting decisions; appraisers lose recent comps; developers may pause new projects because the demand assumptions are now stale; and investors will demand higher risk premiums to compensate for the darkness in forward visibility.

The absence of data also complicates the Federal Reserve’s next move. Rate cuts are already one of the most hotly debated questions in markets, and Fed officials rely heavily on the very indicators now frozen—jobs growth, inflation readings, and wage pressures—to justify their decisions. Without updated releases, policymakers are left either delaying action or making calls based on outdated inputs. That uncertainty keeps financial conditions tighter for longer, prolonging higher borrowing costs for developers and homebuyers alike.

What’s worse is this kind of data gap doesn’t affect all players equally. Larger institutional developers and lenders can lean on internal data, proprietary analytics, or paid third-party forecasts to fill gaps. Smaller firms, or local operators, have less margin for error—missing a single data point can throw off a pro forma. And secondary markets or niche property types are the most vulnerable, since they already suffer from fewer data sources and weaker benchmarking. In a world where capital allocates to certainty and clarity, being unable to see forward now becomes a real liability.

The lesson is that government data isn’t just academic, it undergirds the real estate economy’s trust structure. When it’s absent, assumptions that we normally accept like rental growth, vacancy trends, and migration, need to be stress-tested, scenarios reweighted, and underwriters pushed to ask tougher questions. The data vacuum created by a government shutdown doesn’t just stall decisions, it raises the cost of money itself.

Overheard

New Fire Data Challenges the Two-Stairwell Rule

New research from Pew shows that modern multifamily buildings are significantly safer in terms of fire deaths: fire fatalities in post-2000 apartments occur at less than one-quarter the rate of modern single-family homes. This is striking, because one of the most burdensome code requirements in multifamily has long been the mandate for two separate stairwells in buildings above three stories—a rule built on older fears of fire egress risk. If newer buildings with modern sprinklers, fire-rated materials, self-closing doors, and advanced alarms can perform so much better, the justification for requiring two stairwells—even in smaller buildings—warrants serious reexamination.

Critics of the two-stair rule argue that it adds 6 – 13 percent to construction costs and eats up 7 percent of floor area. That cost burden constrains unit layouts, reduces natural light, and often forces developers to shrink building footprints or skip projects entirely on tight sites. Some states and cities are already moving: Los Angeles is drafting an ordinance to permit single-stair multifamily buildings up to six stories. Single-stair advocates also point out that jurisdictions like Seattle and New York have allowed single stairways under strict fire protections for decades without catastrophic outcomes.

Taken together, this new fire-safety evidence should be fresh ammunition for proponents of code reforms aimed at removing barriers to new multifamily housing. If the data shows that modern multifamily is safer—and that single stair design doesn’t meaningfully raise risk—then codes should adapt, not hold back development. Reducing overly conservative egress rules could unlock more missing-middle housing, cut construction costs, and allow denser, more efficient designs in walkable neighborhoods. In a housing crisis where every regulatory inch matters, the two-stairwell law may be overdue for retirement.

Fermi’s $15 Billion IPO Shows Investor Rush Into AI Infrastructure

Fermi made a splashy debut on the Nasdaq, with shares opening 19 percent above the IPO price and giving the Amarillo-based data center REIT a valuation of nearly $15 billion. The company, co-founded in January 2025 by former Texas Governor and U.S. Energy Secretary Rick Perry, went public less than a year after its launch and despite having no revenue. Investors poured into the offering, underscoring the rush of capital toward companies tied to artificial intelligence infrastructure. Fermi raised $682 million in the upsized IPO, selling 32.5 million shares at $21 each after initially marketing them in a range of $18 to $22.

The company’s ambitions are nothing short of massive. Its flagship development, Project Matador, is designed to generate 1.1 gigawatts of power by 2026 and scale up to 11 GW, roughly equivalent to five Hoover Dams. The energy mix is planned to include nuclear, natural gas, and solar, reflecting Perry’s pitch that this is a “modern-day Manhattan Project” to power the AI era. Fermi has already signed a non-binding letter of intent with its first tenant for a 20-year lease, though revenue from tenants is not expected to begin until 2027. Investors are betting that the company’s political connections and energy strategy will help it secure long-term demand for its facilities.

Still, analysts caution that execution risk looms large. Fermi’s ability to convert its lofty plans into actual power delivery and signed contracts will determine whether the early enthusiasm is sustainable. History offers some skepticism: past pre-revenue IPOs, from the Dot-com era to the SPAC boom, often struggled once hype gave way to reality. For now, though, the stock’s debut highlights how investors are willing to back long-duration, capital-intensive AI infrastructure plays—if they believe in the vision that, once built, the tenants will indeed come.

Office-to-Residential Playbook

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Propmodo Daily is written and edited by Franco Faraudo with contributions from readers like you and the Propmodo team.

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