Author: Trey Jackson

Real Estate Coalition Weighs In About Proposed Beneficial Ownership Reporting Requirements

Posted on by Trey Jackson

 

FinCEN logo and graphic image

The Real Estate Roundtable and three other national real estate organizations on May 5 submitted detailed comments to the Treasury Department’s Financial Crimes Enforcement Network (FinCEN) on the development of a new federal registry that will contain beneficial ownership information. 

Corporate Transparency Act 

  • The Roundtable, the National MultiFamily Housing Council (NMHC), National Apartment Association (NAA) and National Association of Home Builders (NAHB) submitted the comments in response to FinCEN’s effort to gather public input on the reporting, maintenance and disclosure of beneficial ownership information. 
  • FinCEN solicited comments on a wide range of questions related to its implementation of the Corporate Transparency Act (CTA) – enacted on January 1, 2021 – that effectively bans the registration of anonymously owned shell companies in the United States. (JD Supra, April 26 and Lexology, April 28) 
  • The CTA amended the Bank Secrecy Act to require corporations, limited liability companies, and similar entities to report certain information about their beneficial owners (the individual natural persons who ultimately own or control the companies). 

  • FinCEN is required to develop a confidential, secure, and non-public database to maintain the reported beneficial ownership information. This new reporting requirement aims to enhance the national security of the United States by making it more difficult for malign actors to exploit opaque legal structures to launder money, finance terrorism, proliferate weapons of mass destruction, traffic humans and drugs, and commit serious tax fraud and other crimes that harm the American people. 

Real Estate Industry Concerns 

Logos for NMHC-NAA-NAHB-RER

  • The real estate coalition’s extensive comments emphasize, “The scope of the CTA is far reaching and will impact many commercial and residential real estate businesses who are frequent users of the LLC structure for conducting business. If not implemented with a clear set of rules and regulations, the CTA could result in an outcome of confusion, missteps, and ultimately fines on law-abiding businesses.”
  • The coalition’s comments detail “concerns and recommendations for establishing regulations to implement reporting requirements – as well as provisions regarding FinCEN’s maintenance and disclosure of reported information effectively and fairly.”
  • The coalition document addresses several specific implementation issues, including how small companies targeted by the CTA will face compliance burdens. The time-consuming and challenging process of gathering required information on all beneficial owners of a reporting company that may have been created years ago is also addressed. 

Congressional Intent 

  • Reps. Patrick McHenry (R-NC), ranking member of the House Financial Services Committee, and Blaine Luetkemeyer (R-MO), ranking member of the Consumer Protection and Financial Institutions Subcommittee, sent a letter on April 7 to Treasury Secretary Janet Yellen on the development of the new beneficial ownership reporting regime.
  • The McHenry-Luetkemeyer letter urged Secretary Yellen to adhere to the CTA’s congressional intent by ensuring “the new reporting paradigm is focused on fighting bad actors such as human traffickers, money launderers, and State actors such as China.” The letter also emphasized that FinCEN implement the statute as intended, with a particular focus on minimizing burdens on small businesses while retaining confidentiality, unless disclosure is authorized. 

FinCEN is mandated to issue regulations on the new registry for beneficial ownership information by January 1, 2022 – and specify a subsequent effective date. 

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Biden Proposes $1.8 Trillion “American Families Plan” Funded by Tax Increases

Posted on by Trey Jackson

Biden Joint Address to Congress

President Biden on April 28 outlined a $1.8 trillion American Families Plan that would fund an expansion of government support for child care, education, paid family leave and other “human infrastructure” initiatives through new tax increases. [Full text of the President’s prepared remarks and CNBC, April 29)

  • Biden proposes to pay for The American Families Plan with tax increases on upper-income taxpayers and new tax enforcement initiatives, including significantly higher tax rates on capital investment. Collectively, the Administration claims these changes would raise $1.5 trillion over 10 years. (American Families Plan Fact Sheet)

Roundtable Response

Jeff DeBoer RER Meeting

  • Real Estate Roundtable President and CEO Jeffrey DeBoer, above, said,  “President Biden’s American Jobs Plan and American Families Plan offer very credible initiatives to address some of our nation’s most pressing needs—a modernized infrastructure, a more comprehensive approach to climate-related matters, as well as increased investments in housing, education and child care.”
  • DeBoer also warned, “As policymakers consider the options to raise this needed revenue, we strongly urge that the focus be on broad-based tax increases that do minimal damage to job creation, risk taking and entrepreneurial activity. Unfortunately, particularly when considered in total, many of the tax proposals accompanying the American Jobs Plan or American Families Plan would reduce economic activity, impede job growth, and diminish opportunities for startup businesses and those less advantaged. The current law in these areas may be in need of review and reform, but repealing these incentives is simply not wise.” (Full Roundtable statement)

Specific Tax Increases

Oval Office Meeting

  • The tax proposals in the American Families Plan include increasing the top tax rate on ordinary income from 37 percent to 39.6 percent, which would impact single filers with income above about $453,000 and married couples with income above approximately $509,000, a White House official said. (The Hill, April 29)
  • Raising the tax rate on capital gains and dividends from 20 percent to 39.6 percent for households making over $1 million. (Tax Foundation, April 23)
  • Restricting gain deferred through like-kind exchanges to no more than $500,000 per-year. (Wall Street Journal, April 28)
  • Stepped-up basis: Taxing unrealized gains in excess of $1 million ($2.5 million per couple) at death, but with an exception for family-owned businesses passed on to heirs who continue to run the business. (American Families Plan Fact Sheet)
  • Reforming the current tax treatment of carried interest: (GlobeSt, April 29)
  • Expanding the 3.8% Medicare tax on earnings and net investment income to apply to additional activities currently outside the scope of the tax.
  • Permanently extending the 2017 Tax Cuts and Jobs Act (TCJA) provision, section 461(l), that restricts the deductibility of active pass-through business losses to $250,000 for an individual or $500,000 for a married couple.
  • Notably absent from the American Families Plan are any proposals related to reinstating the deduction for state and local taxes (SALT).

What’s Next

  • Several Senate Democrats have signaled they do not support all the tax increase proposals. Sen. Sen. Joe Manchin (D-WV), a pivotal centrist lawmaker, along with Sens. Mark Warner (D-VA) and Bob Menendez (D-NJ), members of the Senate Finance Committee, voiced concerns that higher capital gains rates could slow economic growth, according to the Wall Street Journal. 
  • Menendez commented on the proposed increase, “For me, it is what you’re doing, the totality of the package, and how does it affect the ability of growth to continue to take place. That’s how I’m judging it. Right now it seems like a rather high rate to me.”

President Biden plans to host his first meeting since taking office with House and Senate leaders from both parties on May 12, according to a White House official. (BGov, April 29)

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Senate Hearings Focus on Clean Energy and Tax Policy, Climate Bank

Posted on by Trey Jackson

Senate Finance Committee Chairman Ron Wyden (D-OR)

Senate hearings this week indicate that clean energy financing and tax policies considered in the current Congress might significantly affect commercial real estate. (Tax Notes, April 29)

Senate Finance Focus

  • Senate Finance Committee Chairman Ron Wyden (D-OR), photo above, opened an April 27 hearing by noting how President Biden’s goal of cutting carbon emissions in half by 2030 is driving clean energy policy. Wyden stated, “The reality is, a debate on energy and transportation is largely a debate on tax policy. That puts this committee in the driver’s seat when it comes to job-creating legislation that addresses head-on the existential challenge of the climate crisis.”
  • Sen Wyden also remarked about legislation he introduced last week – the Clean Energy for America Act, which would revamp tax incentives directed at buildings, electricity and transportation. Among other things, the bill would reform the 179D deduction for energy efficient commercial and multifamily buildings – with the value of the incentive increasing as more energy is conserved. (Text of the legislation, one-page summary of the bill and a section-by-section summary.)
  • Committee Ranking Member Sen. Mike Crapo during his opening remarks noted draft legislation that he unveiled the day before with committee member Sheldon Whitehouse (D-RI) – the Energy Sector Innovation Credit (ESIC) Act. ESIC is an incentive that would “target tax credits for innovative clean energy technologies,” Crapo said. (SFC news release).

E-QUIP Accelerated Depreciation

HVAC equipment

  • Separately, a broad coalition of environmental, manufacturing, and real estate groups led by The Roundtable supports the E-QUIP Act (H.R. 2346), which proposes “accelerated depreciation” for high-performance equipment installed in commercial and multifamily buildings. The coalition is urging policymakers to include this measure as part of any “green tax” package that may be folded into larger infrastructure spending legislation. (Roundtable Weekly, April 2)
  • Roundtable President and CEO Jeffrey DeBoer emphasized an important distinction between the energy incentives affecting CRE. “All building owners are intensely focused on operations and technologies to reduce energy consumption. Yet the policy discussions in Washington frequently don’t reflect the reality of these efforts to make commercial real estate properties more sustainable. It is retrofitting the existing building stock, not new construction, where energy savings and policy incentives are most challenging.” DeBoer said.
  • He added, “The 179D incentive fails to reflect the diverse vintage and tenant base in buildings. The E-QUIP incentive accommodates existing buildings by targeting the addition of high-performance, energy saving components. Combining the two incentives would make most sense.” 

National Climate Bank

Senator Chris Val Hollen (D-MD)

  • The Senate Environment and Public Works Climate Subcommittee on April 27 held a “Legislative Hearing on S.283, National Climate Bank Act” focused on how a national climate bank, also known as an “energy accelerator,” would invest in renewable energy technology.
  • Sen. Chris Van Hollen (D-MD), photo above, co-author of S. 283 with Subcommittee Chairman Sen. Ed Markey (D-MA), testified at the hearing, “… we need a National Clean Energy Accelerator … so we can turbocharge private investment, fortify our energy grid, and create millions of clean energy jobs – including in those communities where fossil fuel plants have closed.”
  • Van Hollen’s legislation is supported conceptually by President Biden’s American Jobs Plan, which recommends a $27 billion “accelerator” financing platform to mobilize private investment into building retrofits and other clean energy projects.

  • White House National Economic Council Director Brian Deese recently discussed the creation of a climate bank in an interview with Roundtable President and CEO, Jeffrey DeBoer for The Roundtable’s April 20 Spring Meeting. (Roundtable Weekly, April 23).

Additionally, the White House on April 27 announced policy actions to advance the expansion and modernization of the energy grid. National Climate Advisor Gina McCarthy noted, “After the Texas transmission debacle this winter, no one can doubt the need to invest in our electric grid. The steps that the Departments of Energy and Transportation are taking today, when combined with the grid investments outlined in the American Jobs Plan, will turbocharge the building of major new electricity transmission lines that will generate new jobs and power our economy for years to come.”

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Real Estate Roundtable Statement on President Biden’s American Jobs Plan and American Families Plan

Posted on by Trey Jackson

(WASHINGTON, D.C.) — “President Biden’s American Jobs Plan and American Families Plan offer very credible initiatives to address some of our nation’s most pressing needs — a modernized infrastructure, a more comprehensive approach to climate-related matters, as well as increased investments in housing, education and child care.    

The real estate industry strongly supports bold actions to finance infrastructure needs, expand the economy, and promote job growth, particularly solutions that help keep real estate — which employs over 13 million Americans and provides three-quarters of local tax revenue — in healthy balance.  

Responsibly financing these, and other, initiatives obviously will require additional tax revenue.   

Many businesses and communities are still straining to emerge from the COVID-19 pandemic. As policymakers consider the options to raise this needed revenue, we strongly urge that the focus be on broad-based tax increases that do minimal damage to job creation, risk taking and entrepreneurial activity.     

Unfortunately, particularly when considered in total, many of the tax proposals accompanying the American Jobs Plan or American Families Plan, would reduce economic activity, impede job growth, and diminish opportunities for startup businesses and those less advantaged.  

Eliminating the reward for investing capital, risking personal savings and borrowing, providing construction guarantees, or providing plain old sweat equity would have enormous economic impacts across the country . . . some of which are known, but many of which are unknown and could result in significant unintended consequences.   

Rewarding risk with a capital gains rate that is lower than the ordinary tax rate, allowing real property to be traded with some tax deferral, recognizing that risks that qualify for capital gains treatment are not just associated with cash investments — together these policies encourage the productive risk-taking that spurs investment in economically struggling communities and more challenging assets, like affordable housing.  

The current law in these areas may be in need of review and reform, but repealing these incentives is simply not wise.   

As this important process moves forward, The Real Estate Roundtable will share data, research, and recommendations with the Administration and lawmakers to advance sound tax policy that is fair, productive and provides equal opportunities for all Americans.”

The Real Estate Roundtable brings together leaders of the nation’s top publicly-held and privately-owned real estate ownership, development, lending and management firms with the leaders of major national real estate trade associations to jointly address key national policy issues relating to real estate and the overall economy.

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Roundtable Leaders and National Policymakers Highlight Key Industry Issues

Posted on by Trey Jackson

A wide range of policy issues were addressed by Roundtable leaders, Members of Congress and Administration officials during this week’s Roundtable Spring Meeting, including: infrastructure; housing availability and financing; tax proposals; building energy and climate related matters; and pandemic risk insurance. (For issue detail please see The Roundtable’s 2021 National Policy Agenda)

Roundtable Leadership

  • Roundtable Chair Debra Cafaro (Chairman and CEO, Ventas, Inc.) launched the meeting on April 20 with Roundtable Chair-Elect John F. Fish (Chairman & CEO, SUFFOLK) and Roundtable President and CEO Jeffrey DeBoer. 
  • Chair Cafaro noted, “We convene at a time imbued with optimism and renewal, as we are fortunate to have an accelerated vaccine rollout, an improving economy and stabilizing markets.” 

  • She also acknowledged the vital, positive role that The Roundtable membership has played in addressing many of today’s national challenges, including rebuilding and expanding infrastructure; expanding housing opportunities; creating jobs and training workers for a changing economy. “Roundtable members have been at the forefront of advocating for these important policies since the onset of the COVID-19 pandemic,” Cafaro said.
  • Roundtable Chair-Elect Fish stated, “Unintended consequences can occur when big national policy changes are proposed, so it is more important than ever that the real estate industry offer its expertise to help policymakers as they look to enact reform and propose new, important initiatives. The Roundtable is indeed engaged, and will remain so, in major policy issues impacting the industry.”
  • Roundtable President and CEO DeBoer emphasized the need for ongoing interaction with policymakers in Washington as the policy agenda and congressional rosters change.  He stated, “Our Roundtable policy advisory committees continue to remain active in keeping policymakers and regulators up to date on the evolving marketplace and our policy agenda. We always take a fact-based approach from the point of view of the asset, showing how it is sustainable, supports jobs for the community and contributes to overall economic growth,” DeBoer stated.

Featured Policymakers

Transportation Secretary Pete Buttigieg

  • The Roundtable’s Fall Business Meeting included virtual visits from the following guests:
     
    • Senate Majority Leader Chuck Schumer (D-NY)
    • Secretary of Transportation Pete Buttigieg, above
    • Secretary of Commerce Gina Raimondo
    • White House National Economic Council Director Brian Deese
    • Senator Jacky Rosen (D-NV)
  • Following the business meeting, members from the House and Senate attended several smaller breakout sessions with Roundtable attendees to discuss national policy issues in a more informal exchange of views.

Next on The Roundtable’s meeting calendar is the all-member June 15-16 State of the Industry Meeting, which will be held virtually via Zoom.

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GOP Senators Outline Infrastructure Plan; Biden Announces U.S. Emissions Goal at Global Summit

Posted on by Trey Jackson

Capito GOP Infra Package podium x475edit2

Senate Republicans on April 22 unveiled a five-year, $568 billion infrastructure proposal as a counteroffer to President Joe Biden’s eight-year, $2.2 trillion plan. (Republican infrastructure framework and press conference)

Contrasting Infrastructure Plans

  • The GOP plan, crafted by a group led by Senate Environment and Public Works Committee Ranking Member Shelley Moore Capito (R-WV), at podium in photo, adheres to a more narrow definition of infrastructure than the Democrats’ proposal. (CQ and CNBC, April 22)
  • The Republican proposal is focused on transportation, but also targets broadband and water projects. Details about how to fund the plan are vague, referencing unspecified user fees and spending unused money from prior COVID-19 relief bills. (Republican infrastructure framework and Politico Pro, April 22)
  • Funding for Biden’s multitrillion dollar “hard infrastructure” plan, by contrast, would rely on an increase in corporate taxes and further address electrical vehicles and “clean energy” assets.  The Administration is expected to unveil its “American Families Plan” next week – an extensive framework supporting “human infrastructure” investments that would be paid for, at least partially, through tax increases on wealthy individuals. (Roundtable Weekly, April 2)
  • Meanwhile, a group of 58 bipartisan lawmakers called the Problem Solvers Caucus on April 23 released a report that proposes several possible fee increases to pay for infrastructure spending.  The caucus report includes options to impose a vehicle-miles traveled tax from electric vehicles – and proposes indexing gas and diesel taxes to inflation, highway construction costs, fuel-economy standards, or some combination.  (Caucus report and Wall Street Journal, April 23)

Climate Goals

President Biden's Closing Remarks at Climate Change Virtual Summit

  • President Biden held a historic “virtual” climate summit yesterday and today with 40 world leaders to build global commitments to slash greenhouse gas emissions and ramp-up renewable energy development. (New York Times, April 22 and White House Fact Sheet, April 23)
  • Biden committed the U.S. to cut its emissions in half by 2030 (relative to a 2005 baseline) – a pledge that would “dramatically reshap[e] key sectors of the economy.” (Wall Street Journal, April 23). The Biden Administration considers its climate commitments a “core part of [its] $2.2 trillion infrastructure plan,” essential to embrace new technologies, and necessary for the U.S. to out-compete China. (POLITICO, April 22)
  •  An open letter signed by 400+ businesses and investors support Biden’s 2030 target, calling it “ambitious and attainable.” The CEOs for Bank of America and Citibank appeared at the summit, as the financial sector faces increasing pressure to “play its biggest role yet in greening the global economy.” (Axios, April 22)

Energy Tax Bill

Senator Roy Wyden (D-OR) comments on floor

  • Senate Finance Committee Chairman Ron Wyden (D-OR) on April 21 reintroduced legislation that would consolidate and refocus a range of existing energy tax incentives directed at buildings, clean electricity, transportation and conservation.
  • The Clean Energy for America Act would provide performance-based tax incentives for energy efficient homes and commercial buildings – with the value of the tax incentives increasing as more energy is conserved. (Text of the legislation, one-page summary of the bill and a section-by-section summary.)
  • Similar to the previous version of the legislation, the bill would also address Section 179D – the enhanced deduction for energy-efficient commercial buildings – by creating a sliding scale based on the percent of energy efficiency achieved above the most recent ASHRAE 90.1 standard.
  • A business coalition led by The Roundtable supports the E-QUIP Act (H.R. 2346), which proposes “accelerated depreciation” for high-performance equipment installed in commercial and multifamily building.  The coalition is urging policymakers to include this measure as part of any “green tax” package that may be folded into larger infrastructure spending legislation. (Roundtable Weekly, April 2)

The Senate Finance Committee will discuss energy tax policy and climate change at an April 27 hearing entitled “Climate Challenges: The Tax Code’s Role in Creating American Jobs, Achieving Energy Independence, and Providing Consumers with Affordable, Clean Energy.”

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Roundtable-Backed Corporate Diversity Bill Passes House Committee

Posted on by Trey Jackson

A bill supported by The Real Estate Roundtable that would require public companies to report on the diversity of their corporate boards and executive officers was approved Tuesday by voice vote in the House Financial Services Committee. (Committee mark-up, April 20)

  • The Improving Corporate Governance Through Diversity Act (H.R. 1277) is sponsored in the House by Rep. Gregory Meeks (D-NY), left in photo, and in the Senate by Sen. Bob Menendez (D-NJ), right in photo. (Roundtable Weekly, Feb. 27)

  • The bill would amend the 1934 Securities Exchange Act to require issuers of securities that must file annual reports to disclose in proxy statements:
    • Data on the racial, ethnic, and gender composition of their executive officers, board of directors, and board nominees;
    • Whether any director, board nominee, or executive officer is a veteran; and
    • Plans or strategies to promote diversity at the board and executive levels. 
  • The Roundtable supports the Meeks-Menendez bill along with other groups including Nareit, NAIOP, International Council of Shopping Centers, Real Estate Executives Council (REEC), and the U.S. Chamber of Commerce. (Meeks news release, Feb. 23, 2021)
  • The Roundtable joined other national organizations in a letter urging Financial Services Committee leaders to advance the legislation. The April 20 letter stated, “gender, racial, and ethnic diversity on corporate boards of directors … is important to institutional investors and other stakeholders, as well as to good corporate governance.”
  • The full House is expected to vote in the coming weeks on the measure, which passed in the last session of Congress but stalled in the Senate (Roundtable Weekly, July 31, 2020).  Now that the Senate is under Democratic control, the Meeks-Menendez bill has a higher likelihood of passing in both chambers.
  • In related news, The Roundtable’s Equity, Diversity and Inclusion (ED&I) Committee is coordinating with the Real Estate Executive Council (REEC) on efforts to promote the hiring of more minority- and women-business enterprises (MWBEs) in real estate’s “supply chain” of vendors and contractors.

The Roundtable is a “Founding Diversity Partner” in a REEC national program to improve diversity, racial equality, and inclusivity across the commercial real estate industry. (Roundtable Weekly, Feb. 5)

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House Again Passes Cannabis Reform Legislation Providing a Safe Harbor to CRE Owners

Posted on by Trey Jackson

A Roundtable-supported bill that would allow federally regulated banks to provide mortgage and financial services to state-licensed, cannabis-related businesses (“CRBs”) without the threat of federal penalties passed the House April 19 on a strong bipartisan vote. 

The SAFE Banking Act

  • The Secure and Fair Enforcement (SAFE) Banking Act [H.R. 1996 (117)] would provide commercial property owners a safe harbor if they lease space to a CRB, whose mortgages would not be subjected to corrective action by a bank.
  • The SAFE Banking Act, which has been introduced in every Congress since 2013 by Rep. Ed Perlmutter (D-CO), passed the House multiple times in the last Congress – both as a stand-alone measure and as an addition to coronavirus relief legislation.
  • Rep. Perlmutter commented on the passage this week, “After years of bringing up this issue, I feel optimistic about the path forward for the SAFE Banking Act and, more broadly, reforms to our federal cannabis laws.” (Perlmutter news release, April 19)

Roundtable Support

  • The Real Estate Roundtable is a long-standing supporter of the SAFE Act. Roundtable President and CEO Jeffrey DeBoer noted in March 2019 letter to policymakers that the legislation, “… clarifies that banks could not take adverse action on a loan to a real estate owner solely because that owner leases property to a legitimate CRB.  The measure also protects sellers and lessors of real estate and other CRB ‘service providers’ by clarifying that proceeds from legitimate marijuana-related transactions do not derive from unlawful activity, and thus do not provide a predicate for federal criminal money laundering.”  (Perlmutter news release, March 18, 2021 and Roundtable letter, March 25, 2019)
  • The legislation is supported by a wide variety of other organizations, including the National Association of State Treasurers and Governors from 21 states and territories.  (Perlmutter news release, April 19)
  • The Roundtable also advocates that Congress should provide fuller protections to real estate business through legislation that clarifies state-compliant cannabis transactions are not illegal federal “trafficking” – and do not produce unlawful proceeds under money laundering statutes.

Cannabis and CRE

The estimated value of the U.S. cannabis industry is $17.7 billion, a substantial amount of which remains unbanked. As of January 2021, the legal cannabis industry supports 321,000 jobs across the country. (Perlmutter news release, April 19)

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Financial Regulators Call for Federal Legislation to Ease LIBOR Transition

Posted on by Trey Jackson

Rep-Brad-Sherman--Chair-x475w

Officials from the Fed and other top federal financial regulatory agencies testified on April 15 before a House Financial Services subcommittee that they support federal legislation to transition away from using the London Interbank Offered Rate (Libor) as an interest rate benchmark for US dollar contracts.  (Subcommittee hearing video and background memorandum)

Libor Deadlines

  • Libor is currently used in many outstanding financial contracts – including mortgages, student loans and derivatives – worth trillions of dollars.
  • Using LIBOR for new contracts is scheduled to end at the end of 2021. Additionally, all Libor maturities will stop in June 2023, although some will cease at the beginning of next year.
  • Rep. Brad Sherman (D-CA), photo above – who chairs the House Financial Services Subcommittee on Investor Protection, Entrepreneurship, and Capital Markets that held the hearing – has circulated draft legislation of a proposal entitled the Adjustable Interest Rate (LIBOR) Act of 2021 to smooth the transition away from Libor to the Secured Overnight Financing Rate (SOFR). (Pensions & Investments, April 16)
  • Lawmakers from both parties also voiced their support for federal Libor legislation during the hearing. Sherman stated that the need for federal action on Libor would test Congress to see if it can pass “necessary legislation that isn’t Democrat, isn’t Republican.” (CQ, April 15)

Roundtable Support

Libor transition to SOFR image

  • The Real Estate Roundtable and 17 national trade organizations on April 14 sent a letter of support for federal Libor legislation to leadership of the House Financial Services Committee.
  • The letter notes that the trillions of dollars of outstanding contracts, securities, and loans that use LIBOR for their interest rates do not have appropriate contractual language to address a permanent cessation of LIBOR. 
  • The coalition states in their letter that “Ineffective or ambiguous fallback provisions will result in uncertainty, litigation, and harm to consumers, businesses, and investors. Only federal legislation can uniformly address all 50 states, and only federal legislation can address issues such as the need for narrow relief from certain federal laws.”
  • On April 6, 2021, New York Governor Andrew Cuomo signed the first state-passed legislation (Senate Bill 297B/Assembly Bill 164B) intended to reduce risks associated with the transition away from LIBOR. Since New York law governs many of the financial products and agreements referencing LIBOR, the legislation will provide legal clarity for these contracts and will lessen the burden on New York courts. (Pensions & Investments, March 25) 

The American College of Real Estate Lawyers recently published a detailed overview of the Libor transition – “LIBOR’S Endgame: a Brief Pause, Not a Reprieve; a Safe Harbor, but a New Penalty” – by Joe Forte (Senior Legal Councel, AmTrust Title), who is a member of The Roundtable’s Real Estate Capital Policy Advisory Committee (RECPAC). 

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Bipartisan Legislation to Build More Housing Near Transit Reintroduced

Posted on by Trey Jackson

San Diego

The bipartisan Build More Housing Near Transit Act of 2021 (H.R. 2483) – reintroduced on April 14 by Reps. Scott Peters (D-CA) and McMorris Rodgers (R-WA) – would encourage the construction of low and middle-income housing in transit-served, walkable locations. 

  • The United States is in the middle of a severe affordable housing shortage exacerbated by the economic toll of the COVID-19 pandemic. The National Low Income Housing Coalition estimates there is a shortage of 7 million affordable homes, and 10.4 million Americans spend more than half of their income on housing. 

Benefits of the Bill 

  • The Build More Housing Near Transit Act of 2021 would provide incentives for building housing developments that use less land, allow people to live closer to job opportunities and effectively reduce green house gas emissions by eliminating the need for cars.
  • The Roundtable-supported bill was initially introduced in the previous Congress, which passed the House as part of last year’s Moving Forward Act. (One-page summary, Up for Growth Action)
  • This year’s bill (H.R. 2483) would ensure the Federal Transit Administration (FTA) takes a holistic and quantitative approach to evaluating applicants seeking to build affordable housing projects near transit station areas. Specifically, the bill would make some minor, but essential, enhancements to the evaluation criteria for the FTA’s Fixed Guideway Capital Investment Grants Program, or Section 5309 grants, which fund projects like commuter rail, light rail, and bus rapid transit. 

Broad Support 

Housing Near Transit

  • The Real Estate Roundtable joined a broad coalition of housing, transportation and other organizations in an April 14 letter to the bill’s sponsors to express strong support for the legislation.
     
  • The coalition letter states, “ From encouraging more thoughtful planning, to supporting more inclusive housing policies, to enabling more efficient use of federal dollars, the Build More Housing Near Transit Act is a sound policy and the product of a collaborative process.”
  • One of the organizations includes Up for Growth Action, whose Executive Director Mike Kingsella said, “The Build More Housing Near Transit Act encourages localities to align land-use policies and affordable housing resources with federal transit investment, ensuring that transit-rich communities are accessible to more Americans.” (Rep. Peters news release, April 24) 

Original cosponsors of the legislation include Reps. Marilyn Strickland (D-WA), Derek Kilmer (D-WA), Lisa Blunt Rochester (D-DE), David Scott (D-GA), Ami Bera (D-CA), Alan Lowenthal (D-CA), and Tom Suozzi (D-NY). 

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