Author: Trey Jackson

The Roundtable Commemorates 20th Anniversary of 9-11 and TRIA’s Positive Impact

Posted on by Trey Jackson

9-11Tribute NYC skyline

The Real Estate Roundtable this week commemorated the 20th anniversary of the 9-11 attacks by recognizing the enduring, positive impact of the Terrorism Risk Insurance Act (TRIA) and holding a joint meeting of the organization’s Homeland Security Task Force (HSTF) and Risk Management Working Group (RMWG). 

Reflection and Action 

  • Roundtable President and CEO Jeffrey DeBoer stated, “The nation and the industry reflects during this solemn anniversary week on the profound human losses, and lessons learned, from the tragic events of September 11, 2001.”
  • DeBoer added, “We also recognize the enduring, positive impact of the Terrorism Risk Insurance Act (TRIA) to help protect the economy in the event of future attacks. The Roundtable remains proud of its efforts in the wake of 9-11 and secure TRIA renewals that extend the program until the end of 2027.  Our nation remains vigilant against terrorism threats as our industry remains steadfast in working with government agencies to combat physical and cyber-terrorist attacks.” 

9-11 Legacy: TRIA 

CIAT logo

  • A Sept. 7 article in Commercial Observer reported how The Real Estate Roundtable organized a coalition of business insurance policyholders – the Coalition to Insure Against Terrorism – to win passage of TRIA.  The article states, “TRIA has provided the commercial real estate industry with a crucial backstop against losses suffered from external threats in the nearly two decades since its enactment.”

  • The article quotes Roundtable Board Member Anthony Malkin, (chairman, president and CEO, Empire State Realty Trust) on the far-reaching, positive impact of TRIA on CRE, colleges, sports stadiums and hospitals.
  • Roundtable Senior Vice President Chip Rodgers is also quoted about TRIA’s vital importance for commercial real estate, since lenders require ‘all risk’ insurance coverage — including terrorism coverage — to cover the risk of loss to the collateral. (Commercial Observer, Sept 7) 

Ongoing Industry Efforts 

REISAC logo x475

  • The Roundtable’s HSTF and the Real Estate Information Sharing Analysis Center (RE-ISAC) were launched soon after 9-11 to coordinate CRE’s response to potential future attacks and share threat information.
  • The HSTF and RMWG virtual joint meeting this week featured a discussion with Peter Bergen, whose extensive background as an expert on terrorism includes years as a journalist, documentary producer, vice president for global studies & fellows at New America, and CNN national security analyst. He is currently co-director at the Center on the Future of War at Arizona State University. Mr. Bergen discussed the current threat picture facing the United States, including the ramifications of the Taliban’s return to power in Afghanistan.
  • Roundtable participants were also joined by Shane Lamond (Lieutenant, D.C. Metropolitan Police Department) who led a discussion on civil unrest threats, the proliferation of ransomware attacks and various COVID-related challenges of re-entering buildings. 

The Roundtable is also working with the Business Continuity Coalition to develop an insurance program that protects jobs by ensuring business continuity from future economic losses from pandemics and other health emergencies that necessitate widespread government mandated closures of the economy. (Roundtable Weekly, July 23) 

#  #  # 

Congress Faces Daunting Fall Agenda of Infrastructure Bills, Budget Funding and Debt Limit Deadlines

Posted on by Trey Jackson

red lines to Capitol

Several significant issues affecting commercial real estate converge this month as Congress faces deadlines on a $550 billion “physical” infrastructure bill, a separate $3.5 trillion “social” infrastructure package, government funding for FY2022, and the national debt ceiling.  

The full Senate will return on Sept. 13 and the House on Sept. 20. Deadlines to watch as policymakers face a daunting agenda: 

Sept. 15 — Reconciliation Bills Expected 

  • House committees this week began work on completing various portions of the massive social infrastructure package – including tax revenue raisers impacting CRE – by a Sept. 15 deadline set by House Speaker Nancy Pelosi (D-CA). The $3.5 trillion package will be considered under “reconciliation” budget rules that would only require Democratic votes to pass. (The Hill, Sept. 9 and Roundtable Weekly tax story below)
     
  • Senate Majority Leader Chuck Schumer (D-NY) has instructed his committees to finalize their parts of the upper chamber’s reconciliation bill by Sept. 15 – although this deadline is non-binding and expected to slip. (CNBC, Aug. 11)
     
  • Sen. Joe Manchin (D-WV) wrote in a Sept. 2 Wall Street Journal op-ed that Congress should take a “strategic pause” on the reconciliation package. In a 50-50 Senate, the votes of moderate Democrats such as Manchin and Krysten Sinema (D-AZ) are crucial for passage. 

Sept. 27 — House infrastructure Vote 

House of Reps vote

  • The Senate on Aug. 10 passed a bipartisan bill addressing physical infrastructure with $550 billion in new spending. (Roundtable Weekly, Aug. 13) 
  • Pelosi has set a Sept. 27 deadline for the House to vote on the Senate-passed bill. Pelosi’s move accommodated a group of 10 moderates in her caucus who insisted on de-coupling House votes on physical and human infrastructure legislation. (Roundtable Weekly, Aug. 20)
     
  • Pelosi can afford to lose only three Democratic votes in the narrowly divided House if all Republicans oppose a bill. (New York Times, Sept 5)
     
  • The Real Estate Roundtable held an all-member Infrastructure Town Hall on Aug. 12 to discuss the Senate infrastructure bill, what lay ahead in the House, and the potential impact on commercial real estate. (Roundtable Weekly, Aug. 13)   

October – Federal Government Funding and Debt Ceiling 

Treasury logo on flag background

 

  • Funding for the federal government expires Oct. 1 unless an FY22 appropriations bill is enacted. Congress is expected to pass a stopgap spending bill – known as a Continuing Resolution (CR) – that would fund agencies at current levels to avoid a partial government shutdown. 
  • The CR could also include a measure to suspend or raise the national debt ceiling, which would require at least 10 Senate Republican votes to pass under regular order. 
  • Democratic leaders plan to pursue a bipartisan vote to waive the debt limit. (Reuters and PoliticoPro, Sept. 8) However, 46 Senate Republicans pledged in an August 10 letter that they “will not vote to increase the debt ceiling, whether that increase comes through a stand-alone bill, a continuing resolution, or any other vehicle.” (Bloomberg and The Wall Street Journal, Aug. 10) 
  • Congress must address the national debt ceiling by October, according to a Sept. 8 letter from Treasury Secretary Janet Yellen to congressional leaders. 

The Roundtable will discuss how all these issues impact CRE and the national economy during its Fall Meeting on Oct. 5 in Washington, DC (Roundtable-level members only). 

#  #  # 

Supreme Court Blocks CDC’s Latest Eviction Ban

Posted on by Trey Jackson

The U.S. Supreme Court struck the Biden Administration’s nationwide ban on residential tenant evictions yesterday, ruling that only Congress has the authority to enact such a moratorium through legislation. (New York Times, Aug. 27; Wall St. Journal, Aug. 27)

The Legal Challenge

  • The high court’s conservatives issued a majority, 6-3 opinion striking the latest iteration of the eviction ban issued by the Centers for Disease Control (CDC) on Aug. 3. (Roundtable Weekly, Aug. 20). “If a federally imposed eviction moratorium is to continue, Congress must specifically authorize it,” the Justices decided.

  • The gist of the ruling is that the CDC’s public health role could not be stretched so far to encompass the federal ban. “[T]he CDC has imposed a nationwide moratorium on evictions in reliance on a decades-old statute that authorizes it to implement measures like fumigation and pest extermination,” the majority wrote. “It strains credulity to believe that this statute grants the CDC the sweeping authority that it asserts.”
  • The majority recognized the financial burden on landlords deprived of rent payments with no guarantee of recovery. “Despite the CDC’s determination that landlords should bear a significant financial cost of the pandemic, many landlords have modest means” the majority wrote. “And preventing them from evicting tenants who breach their leases intrudes on one of the most fundamental elements of property ownership—the right to exclude.”
  • Three justices in the Court’s liberal minority would have kept the moratorium in place due to the surge of the Delta variant.

Focus on Disbursing Rental Assistance

  • A coalition of national real estate organizations – led by the National Apartment Association and the National Multifamily Housing Council, and including The Real Estate Roundtable – has consistently opposed the CDC’s eviction ban.
  • The groups have called upon Congress to focus on disbursing billions in unspent sums of federal rental assistance appropriated in prior COVID-19 relief bills – instead of destabilizing rental markets with a nationwide eviction ban. (Roundtable Weekly, July 30).
  • The latest figures released by the Treasury Department this week on the status of rent relief disbursements remain disheartening. While more funds are reaching tenants and landlords, only $5.1 billion out of a total $46.5 billion in Emergency Rental Assistance has been distributed by states and localities through the end of July. (AP, Aug. 25)
  • Roundtable President and CEO Jeffrey DeBoer commented, “Federal, state, and local policymakers must act with urgency to ensure that tenants and housing providers in distress due to the pandemic receive the aid the Congress appropriated for them – and help bring stability to our housing markets.” 
  • States have had varying levels of success in getting federal rent assistance out the door.  “Texas and Virginia have distributed the largest percentages of their allocated funding at around 34% and 41% respectively, while New York State hasn’t even doled out 1% of its federal rental assistance.” (U.S. News, Aug. 25).
  • The Treasury Department has a website to help tenants and landlords find rental assistance programs in their local areas. The National Multifamily Housing Council (NMHC) also has an online hub that provides resources for renters and housing providers to access COVID-19 emergency relief.

While the Supreme Court’s ruling is the end point for litigation challenging the Biden Administration’s actions, progressives in Congress could attempt to re-impose the eviction ban via legislative enactment in the coming weeks.

Tax Proposals Under Scrutiny as Timetable Moves Up for Mammoth Reconciliation Bill

Posted on by Trey Jackson

The unanticipated commitment by Speaker Pelosi to allow a stand-alone vote on the bipartisan Senate infrastructure bill no later than September 27 has scrambled the Congressional calendar and put increased attention and focus on the potential for major tax changes.

Why It Matters

  • House Leaders are urging committees, including the powerful Ways and Means Committee, to complete their work on the $3.5 trillion budget reconciliation bill by September 15.  Ways and Means Chairman Richie Neal has indicated a formal mark-up could start the week of Sept. 6 and continue 4-5 days.  (E&E Daily, Aug. 25)
  • Accelerating the consideration of the $3.5 trillion reconciliation bill may allow its supporters and advocates to retain political momentum for the massive package of social safety net, environmental, tax, and other policies—momentum that could be lost once the infrastructure bill is sent to the President.
  • The shortened timetable, however, puts pressure on lawmakers who are considering complex changes to the tax code that would normally require hearings, extended debate, and substantial vetting.  

Industry Concerns

  • The Real Estate Roundtable has raised concerns regarding a number of proposals in the President’s plan that would raise the tax burden on capital formation, undermine property values and the functioning of real estate markets, and harm the industry’s ability to create jobs and support local communities through property tax revenue.  These proposals include restrictions on like-kind exchanges, an elimination of the reduced tax rate on capital gains, and the taxation of unrealized gains at death.
  • On Tuesday, the accounting industry expressed strong concerns with the President’s proposed changes to capital income. The letter noted that, “[t]he taxation of the capital gains on gift or death in many cases would be the third time that the gain is taxed.”  Imposing immediate tax on transfers by gift or death is an unreasonable requirement when the transfers are non-liquid assets such as real estate, business interests, etc., because it may require the forced liquidation of some or all of the assets transferred,” they continued.    
  • Last Friday, the Tax Foundation challenged the Administration’s claim that their tax proposals would spare 97 percent of small businesses.  The organization analyzed the most recent IRS data and concluded the President’s proposals would reach more than half of pass-through business income (because 54% of pass-through income is earned by taxpayers making more than $500,000).
  • At the same time, lawmakers are mobilizing to ensure that the $3.5 trillion bill includes priorities such as increased investment in affordable housing.  On Thursday, 111 House Democrats led by Reps. Suzan DelBene (D-WA) and Don Beyer (D-VA) wrote to Speaker Pelosi urging that the legislation include a significant expansion of the low-income housing tax credit.

Contact Congress

House Democrats Reach Deal for $3.5 Trillion Budget Framework, Schedule September Vote on Bipartisan Infrastructure Bill

Posted on by Trey Jackson

The House of Representatives passed a $3.5 trillion budget resolution Tuesday, after Speaker Nancy Pelosi (D-CA) promised moderate Democrats a September vote on the Senate-passed bipartisan infrastructure bill to garner their support for a framework that sets-up the “reconciliation” process. (Washington Post, Aug. 25)

Why It Matters

  •  “I am committing to pass the bipartisan infrastructure bill by September 27,” Pelosi said. “We must keep the 51-vote privilege by passing the budget and work with House and Senate Democrats to reach agreement in order for the House to vote on a Build Back Better Act that will pass the Senate.” (Speaker Pelosi Statement, Aug. 24; Politico, Aug. 24)

CRE Impact

  • The human infrastructure proposal that may be advanced in the House under budget reconciliation rules would be partially financed by raising taxes on businesses and wealthy individuals – and potentially include a variety of tax increases affecting commercial real estate (see Tax Policy story below)
  • The Real Estate Roundtable held an all-member Infrastructure Town Hall on Aug. 12 to discuss the Senate-passed infrastructure bill, what lay ahead in the House, and the potential impact on commercial real estate.  
  • Rep. Tom Suozzi (D-NY), a member of the tax-writing House Ways and Means Committee, joined Roundtable Chair John Fish (Chairman and CEO, Suffolk), and Roundtable President and CEO Jeffrey DeBoer, for the Town Hall discussion.  (Roundtable Weekly,  Aug. 13)  
  • DeBoer, stated, “This [reconciliation] package may be financed with a variety of tax increases affecting step-up in basis, like-kind exchanges, carried interest and capital gains that would act as a cumulative drag on investment at the exact time when sectors of the economy need incentives to recover from the pandemic. The Roundtable urges Senate and House policymakers to be very cautious as they proceed on the reconciliation bill – so that one-step forward with the physical infrastructure bill is not met with two-steps backward from tax increases.” (Roundtable statement, Aug. 11)

What’s Next

  • Congressional committees are in the process of drafting different sections of the reconciliation package. They have a non-binding deadline of submitting their text by Sept. 15. (Axios, Aug. 24)
  • Reconciliation would likely move in the House first. The House Budget Committee will compile each committee’s individual text into a single package for a floor vote that, if approved, would then be sent to the Senate. 

  • Getting both packages to President Biden’s desk for his signature will be a major challenge. Congressional leadership must consider demands of centrists who balk at the $3.5 trillion price tag for “social” infrastructure, and progressives who believe the $550 billion in new spending for “physical” infrastructure is not big enough to address issues such as climate change. (CNBC, Aug. 25)

When Congress returns after Labor Day, policymakers will face other critical deadlines in addition to their anticipated actions on the infrastructure and reconciliation packages. Legislation is needed after the Treasury Department exhausts its “extraordinary measures” in mid-September to avoid defaulting on the national debt. Congress is also expected to consider a “continuing resolution” to put stop-gap spending measures in place before federal government funds run dry on Sept. 30. (Politico, Aug. 25)

Eviction Moratorium Appeal Denied; Supreme Court Challenge Expected

Posted on by Trey Jackson

image Appeals Court DC Circuit

The D.C. Circuit Court today allowed the Biden administration’s latest federal eviction moratorium to remain in effect, denying an Aug. 14 emergency appeal by the Alabama and Georgia Associations of Realtors to overturn the ban. (Politico and Wall Street Journal, Aug. 20)   

The Legal Challenge 

  • The Realtor groups’ challenge was filed immediately after a federal judge’s ruling allowed the latest eviction moratorium – effective through Oct. 3 – to remain in place until higher courts decide its legality. (Wall Street Journal and Law.com, Aug 13)
     
  • The White House stated its latest moratorium from the Centers for Disease Control and Prevention (CDC) is targeted toward areas that have experienced substantial or high levels of Covid-19 transmission. (CDC news release and Wall Street Journal, Aug. 4). The extension would also allow more time for billions in rent relief appropriated by Congress to reach tenants and landlords. (Time, Aug. 3)
  • Previously, the U.S. Supreme Court ruled that an earlier CDC eviction ban could remain in effect through its expiration on July 31, yet indicated the federal agency had overstepped its authority. Justice Kavanaugh wrote in the high court’s 5-4 decision that another extension would require “clear and specific” legislation from Congress. (New York Times, June 29)
     
  • When Congress could not muster last-minute support in late July to pass an extension, the CDC issued its latest moratorium on Aug. 3. (NBC News and Roundtable Weekly, July 30) 

Impact on Housing Providers 

image Evict Morat July29-2021 letter

  • A coalition of 15 national real estate organizations – including The Real Estate Roundtable –  sent a letter on July 29 to all members of Congress strongly opposing another moratorium extension. The  joint letter called for policymakers to focus on disbursing billions in unspent sums of federal rental assistance appropriated in prior COVID-19 bills – instead of destabilizing rental markets with a legislative eviction moratorium. (Roundtable Weekly, July 30)
  • A massive logjam in states’ disbursement of federal rental aid to tenants and housing providers has compounded the negative economic impact of the eviction moratorium. A National Rental Home Council survey issued in March showed that approximately 23 percent of small landlords leasing single-family rentals were forced to sell at least one, if not all of their properties.
  • Politico also reported on Aug. 14 that nearly 59 percent of tenant households who are behind on rent live in properties with between one and four units – and that 72 percent of those properties are operated by mom-and-pop landlords. 

The Realtors’ current attempt to end the moratorium, considered this week by the D.C. Circuit Court of Appeals, is likely to be appealed to the Supreme Court next week. 

#  #  #

House Scheduled to Vote Next Week on Rule to Advance both “Physical” and “Human” Infrastructure Packages

Posted on by Trey Jackson

US Capitol view up

The House of Representatives will briefly return to Washington the week of Aug. 23 to vote on measures affecting the future of President Biden’s sweeping infrastructure agenda. (New York Times, Aug. 17) 

Two-Track Approach

  • A group of nine moderate Democrats led by Rep. Josh Gottheimer (D-NJ) informed House leadership on Aug. 12 that they will not support a $3.5 trillion budget resolution encompassing “human” infrastructure initiatives unless the bipartisan “physical” infrastructure bill passed by the Senate last week is approved by the House and enacted. (Bloomberg, Aug. 17 and Roundtable Weekly, Aug. 13)

  • The moderates’ letter to House Speaker Nancy Pelosi (D-CA) stated, “Some have suggested that we hold off on considering the Senate infrastructure bill for months – until the (budget) reconciliation process is completed. We disagree. We will not consider voting for a budget resolution until the bipartisan Infrastructure Investment and Jobs Act passes the House and is signed into law.” (Politico, Aug. 13)
  • Progressive House Democrats countered with the opposite approach, stating that they will not support the bipartisan infrastructure plan unless it is tied to the massive budget reconciliation measure, which addresses child care, health care and climate change. (Axios, Aug. 18)
  • Pelosi this week reiterated her two-track plan to advance both measures in the House despite having just a three-vote margin majority. Republicans are expected to oppose the sprawling “human” infrastructure budget resolution. (BGov, Aug. 18) 

CRE Impact 

image - Roundtable President and CEO Jeffrey DeBoer


The human infrastructure proposal that may be advanced in the House under budget reconciliation rules would be partially financed by raising taxes on businesses and wealthy individuals – and potentially include a variety of tax increases affecting commercial real estate.

  •  The Real Estate Roundtable held an all-member Infrastructure Town Hall on Aug. 12 to discuss the Senate-passed infrastructure bill, what lay ahead in the House and the potential impact on commercial real estate.  Rep. Tom Suozzi (D-NY), a member of the tax-writing House Ways and Means Committee, joined Roundtable Chair John Fish (Chairman and CEO, Suffolk), Roundtable President and CEO Jeffrey DeBoer, and other Roundtable staff for the Town Hall discussion.  (Roundtable Weekly,  Aug. 13 and The Roundtable’s  Bipartisan Infrastructure Deal Fact Sheet and Tax and Fiscal Reconciliation Fact Sheet)  
  • DeBoer, above, stated, “This [reconciliation] package may be financed with a variety of tax increases affecting step-up in basis, like-kind exchanges, carried interest and capital gains that would act as a cumulative drag on investment at the exact time when sectors of the economy need incentives to recover from the pandemic. The Roundtable urges Senate and House policymakers to be very cautious as they proceed on the reconciliation bill – so that one-step forward with the physical infrastructure bill is not met with two-steps backward from tax increases.” (Roundtable statement, Aug. 11)

What’s Next

image - House floor debate

  • Pelosi and House Majority Leader Steny Hoyer (D-MD) laid out a schedule for votes next Monday and Tuesday.
  • The House is scheduled to vote Aug. 23 on a rule that governs floor debate on the $3.5 trillion budget resolution (S Con Res 14), the $550 bipartisan infrastructure bill (HR 3684) and a voting rights bill (HR 4). The chamber is then expected to vote Tuesday on the “human” infrastructure framework and the popular voting rights bill. (CQ, Aug. 16)
  • Approval of the budget resolution would allow the development of legislation to move forward that could pass later this year under “reconciliation” rules without any Republican support. The Senate voted last week to advance the same measure. (Roundtable Weekly, Aug. 13)
  • White House spokesman Andrew Bates this week told Bloomberg, “All three are critical elements of the President’s agenda, and we hope that every Democratic member supports this effort to advance these important legislative actions.” (Bloomberg, Aug. 17) 

Pelosi sent a note to her caucus this week, warning that any delay next week  “jeopardizes the once-in-a-generation opportunity” to enact Biden’s broader legislative priorities. (Politico, Aug. 17) 

#  #  # 

Commercial Real Estate Leaders Report Improving Market Conditions Amid Uncertain Return-to-Office Trends

Posted on by Trey Jackson

Q3 2021 Sentiment Index Chart

Commercial real estate executives report improving market conditions, through consistent growth of various asset classes, despite uncertainty surrounding employees returning to the office, according to The Real Estate Roundtable’s Q3 2021 Economic Sentiment Survey released today. The report shows the continued positive momentum for industrial, multifamily and single-family assets, with hospitality continuing to improve with increased travel. 

Market Conditions

  • “As the commercial real estate industry continues to adapt in the face of the global pandemic, we recognize the changing demands and expectations for hospitality, shopping centers, office buildings, travel and convening spaces,” said Real Estate Roundtable President and CEO Jeffrey DeBoer. “Strong, stable and growing real estate markets can be a driving force for the nation’s economic recovery, and contribute productively to a world struggling to overcome COVID and its variants. Investment in these reimagined spaces presents the opportunity to move the economy forward for the benefit of all Americans.”
     
  • The Roundtable’s Q3 Current Conditions Index of 85 increased 7 points from the previous quarter, the highest index recorded in its thirteen year history.
     
  • The Economic Sentiment Overall Index is scored on a scale of 1 to 100 by averaging Current and Future Indices; any score over 50 is viewed as positive. The Roundtable’s Overall Q3 2021 Sentiment Index registered at 78 – a one-point increase from the previous quarter. 
     
  • The Roundtable’s quarterly survey shows that 89 percent of respondents believe that general market conditions today are “much better or somewhat better” versus one year ago – with an abundance of available capital compared to one year ago.
  • However, this quarter’s Future Conditions Index of 71 decreased 4 points compared to last quarter, indicating uncertainty still remains while the country continues to recover from the COVID-19 crisis.

Topline Findings:

Chicago skyline upward

  • The Q3 2021 Real Estate Roundtable Sentiment Index registered a score of 78, an increase of 1 point from the second quarter of 2021 and a 36-point increase over Q3 2020. The speed of the economic recovery compared to only 6 months ago has provided more clarity and certainty for specific asset classes, with the biggest looming question marks being the impact of employees returning to the office and rising inflation risk.
     
  • Industrial performed exceptionally well throughout the pandemic and has maintained positive momentum through the first half of 2021. Additionally, multifamily and single-family suburban assets continue to attract strong demand. Previously challenged assets such as hospitality have rebounded and remain hopeful to reach pre-pandemic levels with increased travel and employees returning to the office.
     
  • Assets classes with durability or the perception of durability such as high-quality multifamily, long-term net lease office, and industrial have all hit record levels, all while certain sectors and regional markets (in particular, those relying heavily on mass transit) have yet to fully recover.
     
  • Respondents cited a continued abundance of available debt and equity capital, which has led to significant amounts of capital sitting on the sidelines waiting for attractive deployment opportunities.
  • DeBoer also noted, “Historically, the real estate industry has played a pivotal role in catalyzing economic recovery following national and worldwide events, and we have the opportunity to play that role again. With the recent infrastructure policy developments in Washington, it is a once-in-a-generation opportunity to rebuild cleaner, safer, and more climate-friendly buildings. With private capital readily available for investment, we are hopeful federal and public private partnerships will continue to fuel job creation and equitable economic development needed to continue the progress made in the economic recovery.”

Data for the Q3 survey was gathered in July by Chicago-based Ferguson Partners on The Roundtable’s behalf.  For the full Q3 report, visit here.

#  #  #

Senate Democrats Pass Budget Resolution that Would Authorize $3.5 trillion “Human Infrastructure” Bill with Large Tax Increases

Posted on by Trey Jackson

DC monuments night

Senate Democrats voted August 11 to advance a $3.5 trillion “human infrastructure” budget resolution, which allows development of legislation that could pass later this year without any Republican support. The budget blueprint passed on a party-line vote of 50-49 the day after the Senate passed a $1.2 trillion “physical infrastructure” bill on a bipartisan basis. (BGov, Aug 11 and Roundtable Weekly, story above) 

Why It Matters 

  • The Senate budget resolution supports President Biden’s wide-ranging domestic priorities that aim to expand the federal social safety net and combat climate change. (New York Times and The Hill, Aug. 11)
  • The sprawling human infrastructure proposal would be partially financed by raising taxes on corporations and wealthy individuals – and potentially include a variety of tax increases affecting commercial real estate.
  • The Senate measure also provided instructions for various committees to craft bills under “reconciliation” budget rules. If approved by the Senate Parliamentarian, the committees’ work would be combined into final legislation that could pass on a majority vote, thereby bypassing a Republican filibuster. (Senate Democratic Memorandum, Aug. 9)
  • The House announced this week that it will return early from summer recess on Aug. 23 to consider the budget resolution. (Associated Press and CQ, Aug. 11)
  • House Speaker Nancy Pelosi (D-CA) reiterated on Aug. 11 that until the Senate finishes and passes the massive reconciliation bill, the House will not vote on the physical infrastructure legislation. Other Members of the Democratic Caucus, including Rep. Josh Gottheimer (D-NJ), co-chair of the bipartisan Problem Solvers Caucus, have called on Congressional Leaders to decouple the measures and send the bipartisan infrastructure bill to the President without delay. (Politico, Aug. 11 and The Hill, Aug. 11) 

Taxes & CRE  

Philadelphia, PA skyline

Roundtable President and CEO Jeffrey DeBoer commented on the Senate’s $3.5 trillion reconciliation bill and the tax proposals under consideration.  

  • DeBoer on Aug 11 stated, “This [reconciliation] package may be financed with a variety of tax increases affecting step-up in basis, like-kind exchanges, carried interest and capital gains that would act as a cumulative drag on investment at the exact time when sectors of the economy need incentives to recover from the pandemic. The Roundtable urges Senate and House policymakers to be very cautious as they proceed on the reconciliation bill – so that one-step forward with the physical infrastructure bill is not met with two-steps backward from tax increases.” (Roundtable statement, Aug. 11)
  • The Roundtable this week produced a summary of budget reconciliation tax issues that could directly impact commercial real estate, including: 
    • Like-Kind Exchanges
    • Capital Gains
    • Pass-through Business Income
    • Step-up in Basis and Taxation of Gains at Death
    • Carried Interest
    • Energy Efficiency Incentives
    • Affordable Housing Incentives 

Roundtable Infrastructure Town Hall 

Roundtable Infrastructure Town Hall - image capture

  • The Roundtable held an all-member Infrastructure Town Hall on Aug. 12 to discuss the Senate reconciliation measure and what it means for commercial real estate. Rep. Tom Suozzi (D-NY), a member of the tax-writing House Ways and Means Committee, center in photo,  joined Roundtable Chair John Fish, top right, Jeffrey DeBoer, top left, and other Roundtable staff for the Town Hall discussion.

The congressional debate on infrastructure is expected to extend into the fall, when policymakers face multiple other deadlines that converge on Sept. 30 – government funding for FY2022, reauthorization of funding for surface transportation programs, and reauthorization of the National Flood Insurance Program. The Roundtable is scheduled to discuss all these issues at its Fall Meeting on Oct. 5 in Washington, DC (Roundtable-level members only). 

#  #  #

Senate Passes Historic Bipartisan Infrastructure Legislation

Posted on by Trey Jackson

Senate Infrastructure Vote Total
The Senate on Aug. 10 passed a historic, bipartisan $1 trillion+ infrastructure bill that would allocate $550 billion in new spending to improve the nation’s transit, utilities and broadband. The Infrastructure Investment and Jobs Act (H.R. 3684) was approved 69-30, with support from all Democrats and 19 Republican Senators, including Minority Leader Mitch McConnell (R-KY). (Wall Street Journal and New York Times, Aug. 10)   

Why it Matters 

  • Real Estate Roundtable Chair John Fish (Chairman and CEO, Suffolk) on Aug. 11 commented, “With the Senate’s passage of this bill, we are one step closer to realizing a once-in-a-generation opportunity to rebuild and reimagine the buildings of tomorrow. We applaud both this historic investment in our nation’s infrastructure, and the members of Congress who have reached across the aisle to find common ground.”
  • Real Estate Roundtable President Jeff DeBoer added, “By devoting more than a trillion dollars toward American infrastructure projects, this long-term investment in the nation’s roads, bridges, mass transit, high-speed rail, broadband, power grid, water pipes, and electric vehicle charging will prompt positive, transformational change for our communities and citizens.” (Roundtable statement, Aug 11)
  • The Roundtable held an all-member Infrastructure Town Hall on Aug. 12 to discuss the Senate bill, its prospects in the House and what it means for commercial real estate. Rep. Tom Suozzi (D-NY), a member of the tax-writing House Ways and Means Committee, joined Roundtable Chair John Fish, Jeffrey DeBoer and other Roundtable staff for the Town Hall discussion. (See Tax Policy story below and  The Roundtable’s Bipartisan Infrastructure Deal Fact Sheet)
  • Roundtable policy specialists also briefed members of the CREW (Commercial Real Estate Women) Network on Aug. 11 about how the infrastructure legislation could potentially impact CRE.  

BID Details 

Roundtable Infrastructure Senate Bill Summary August 5, 2021

  • The 2,700-page Senate bill evolved from bullet points to legislation after a painstaking journey of more than a month by a group of bipartisan senators who negotiated with the Biden Administration. (Politico and Senate Group Joint Statement, Aug. 10)
  • President Biden remarked about the Senate bill, “Forecasters on Wall Street project that over the next 10 years our economy will expand by trillions of dollars, and [the legislation] will create an additional 2 million jobs.” (White House Remarks, Aug. 10)
  • The amounts that would be invested by the “Bipartisan Infrastructure Deal” (BID) to various infrastructure categories are listed in White House summaries and The Roundtable’s BID Fact Sheet. 
  • The BID seeks no tax increases on families or businesses as “pay-fors.”
  • The Senate bill includes Roundtable-supported measures that will utilize public-private partnerships to reach ‘physical’ infrastructure goals, streamline the federal permitting process, and improve key federal energy data used in EPA building labels.

What’s Next 

U.S. Capitol dome interior

  • The Senate’s “physical” infrastructure package now goes to the House.
  • House Speaker Nancy Pelosi (D-CA) has insisted that she will not bring up the Senate’s “physical” infrastructure bill until the Senate also passes a sprawling $3.5 trillion “human” infrastructure bill with funding for climate programs, health care, education and child care.  (New York Times, Aug. 10). 

Majority Leader Steny Hoyer (D-MD) announced the House will interrupt its summer recess and return to session on Aug. 23 to consider the Senate-passed budget resolution that Democrats have insisted is a precursor to votes on the bipartisan infrastructure deal. (NBC News, Aug. 10) (See “reconciliation” story below) 

#  #  #