HESSAM NADJI: The main major concern is the combination of what's been proposed, not just the 1031 exchange provision changes where that tax benefits on a deferral basis, not an exemption. The current program is a tax deferral, as you exchange one property into a like-kind property, would be capped at $500 thousand of gains. Coming together you have the proposed increase in capital gains rate, you have changes on the step-up basis and of course, carried interest. All these things coming together as a combination is what is very concerning to the industry.
The 1031 exchange provision itself is not the motivation for real estate investors to buy or sell real estate. It is one of the driving factors. Ernst & Young estimates that somewhere between 10 to 20 percent of all transactions leverage the 1031 exchange tax deferment benefit. So it is an important part of the industry, but it's not really the only motivation for investors to come into commercial real estate. We're seeing a very broad recovery take shape both on the space demand-side and, of course, on the investment side, because interest rates are low and commercial real estate yields are very compelling, going into what looks to be a very strong recovery over the next 12 to 18 months economically.
On the housing front and retail front, Maria, you and I have talked about retail many times when we've been in these conversations before, the pandemic really exhilarated some trends that were already happening. We were seeing a migration to the suburbs. We were seeing the millennials get into their thirties and want to form families and buy homes. And that got exhilarated very, very rapidly. And we're seeing the trends, ten and a half percent increase in home existing home sales over the last year, fifteen percent price gains on a median basis on a year over year basis. Those are exceptional numbers, but there is enough demographic demand to support the apartment market that's been one of the most stable performers. And while the urban markets are really hurting right now and probably will for the next 12 to 18 months, we're expecting a recovery eventually to take form even in the urban markets once public transportation opens back up and people come back into... office space.
But looking at the economic picture, you're right, we have a long way to go. We've lost 22 million jobs, regained 14 million jobs. We need another eight to 10 million jobs just to get back to where we were. In April, job numbers were very disappointing. That's why things like the 1031 exchange provision that is creating something close to six hundred thousand jobs a year as it is, and pumping something like $27 billion of labor income into the economy already seems to be some factor that shouldn't be manipulated too much or changed too much, because the revenue gain on the other side is very questionable, especially if you reduce the motivation to use the 1031 exchange to buy another property, roll your gains into that property, which in most cases result in renovations, improvements and tax revenue for local and state municipalities. So it is actually an economic support mechanism that's doing its job.