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Roundtable President and CEO Jeffrey DeBoer yesterday discussed the organization’s national policy priorities in the current Congress with Roundtable Board Member Holly Neber (CEO, AEI Consultants and President, CREW Network) during the 2019 Connect Los Angeles conference.  (Watch video of DeBoer’s discussion, March 21)

RER President and CEO Jeffrey DeBoer yesterday discussed the organization’s national policy priorities in the current Congress with Roundtable Board Member Holly Neber during the 2019 Connect Los Angeles conference  .

The policy discussion, “What’s Next!? What’s Happening in Washington and What Does it Mean for Your Business?” explored topics such as terrorism, infrastructure, foreign investment and tax reform before a standing-room only crowd of more than 500. (Video, LA Connect)

• DeBoer profiled several compelling policy issues of importance to commercial real estate, including terrorism risk insurance.  DeBoer explained, “… TRIA, the Terrorism Risk Insurance Act, put in place after 9-11 because the direct insurance industry and the resinsurance industry said they couldn’t measure and predict a terrorism attack.  If they can’t measure and predict it, they can’t offer the product.  If they can’t offer the product, businesses can’t get all-risk insurance.  If you can’t get all-risk insurance, you can’t get financing.  So this issue of TRIA being extended … since being in place since 2002, is very important to liquidity. It’s very important to market stability.  And we want to get it extended by the end of this Congress, by the end of 2020.”    

•  TRIA was enacted in 2002 and was extended in 2005, 2007 and 2015. Without Congressional reauthorization, the program will expire on December 31, 2020.

• DeBoer also addressed the need for Congress to pass legislation that will address infrastructure improvements on a national level.  “We need to recognize that we are in a new transportation revolution.  And it’s changing and we’re going to change in the next 10, 15 years; the way we access our infrastructure.  We want to get this infrastructure bill done.  We want to get it as broad as possible.  We want to bring in as much private capital as we can,” DeBoer said, emphasizing that public-private partnerships can play a major role in infrastructure improvement projects.  (see Infrastructure story above)

• He also discussed tax policy priorities, including repeal of the Foreign Investment in Real Property Tax Act (FIRPTA) and recently introduced legislation that would change taxation of carried interest (see Tax Policy story above).

• Among the other policy issues that DeBoer said The Roundtable is focused on are reform of the Government-Sponsored Enterprises (GSEs) Fannie Mae and Freddie Mac; encouraging the development of affordable and workforce housing; and environmental issues with the EPA, including ENERGY STAR.  (Video of DeBoer’s discussion, March 21)

The Roundtable released its 2019 National Policy Agenda during its January State of the Industry Meeting in Washington (Roundtable Weekly, Feb. 1).  

The tax-writing House Ways and Means Committee held a hearing this week on the need to launch a national infrastructure improvement program and potential funding sources.  

The Joint Committee on Taxation issued an “Overview Of Selected Internal Revenue Code Provisions Relating To The Financing Of Public Infrastructure.”

• Bipartisan agreement on the need to pursue infrastructure improvements was expressed during the hearing, “Our Nation’s Crumbling Infrastructure and the Need for Immediate Action,” but there was no clear consensus on how to pay for what could be a $1.5 trillion package.  (New York Times, Feb. 12) 

• In conjunction with the hearing, the Joint Committee on Taxation issued an “Overview Of Selected Internal Revenue Code Provisions Relating To The Financing Of Public Infrastructure.”  The report addresses the following funding options:

• Highway Trust Fund

• Airport and Airway Trust Fund Excise Tax

• Inland Waterways Trust Fund Excise Tax

• Harbor Maintenance Trust Fund Excise Tax

• Tax-Exempt Financing for Public Infrastructure; and

• Public-Private Partnerships

The hearing covered the looming shortfall in the Highway Trust Fund and the viability of potential revenues sources – such as an increase in the gas tax and the imposition of a Vehicle Miles-Traveled fee– to help finance increased infrastructure spending.

House  Ways and Means Chairman Richard Neal (D-MA) said President Trump’s interest in “a massive infrastructure package,” shows Congress has “a real opportunity to work together and do something big here.”  (Chairman Neal statement, March 6)commercial real estate market.

• Ways and Means Chairman Richard Neal (D-MA) noted how “meaningful, sustained investments in our nation’s infrastructure” would create more jobs, encourage a more competitive business climate and revitalize local communities.  Neal also said President Trump’s interest in “a massive infrastructure package,” shows Congress has “a real opportunity to work together and do something big here.”  (Chairman Neal statement, March 6)

• President Trump stated during his January State of the Union address, “I know that Congress is eager to pass an infrastructure bill. And I am eager to work with you on legislation to deliver new and important infrastructure investment, including investments in the cutting edge industries of the future. This is not an option, this is a necessity,” Trump said.  (Roundtable Weekly, Feb. 8)

• The need to repair aging roads, bridges, transit, airports and harbors throughout the country was also the focus last month at a House Transportation and Infrastructure Committee hearing on “The Cost of Doing Nothing: Why Investing in Our Nation’s Infrastructure Cannot Wait.”  (Chairman Peter DeFazio’s (D-OR) Opening Remarks, Feb. 7)

• The Roundtable’s 2019 Policy Agenda notes that every $1 billion spent on infrastructure creates an estimated 13,000 jobs.  “The quality of infrastructure systems—including transportation, utilities, and telecommunications—has been cited as the most important factor influencing real estate decisions around the world. The productivity of our cities, towns and workforce depend on systems that safely and reliably transport people, supply power, and share information across the built environment,” according to the report.   (The Roundtable’s 2019 Policy Agenda Infrastructure section.)

The Roundtable sent a comment letter to President Trump in Jan. 2018 offering specific suggestions on how innovative financing sources may be used to help pay for infrastructure improvements – and how restructuring a lengthy permitting process and cutting unnecessary red tape will help control project costs and delays. 

The Commerce Department has initiated investigations into whether a key material used in major real estate and infrastructure projects – fabricated structural steel (FSS) from Canada, China and Mexico – is being sold in the U.S. for less than fair value.  (Commerce Department announcement, Feb. 26)

The Commerce Department has initiated investigations into whether a key material used in major real estate and infrastructure projects – fabricated structural steel (FSS) from Canada, China and Mexico – is being sold in the U.S. for less than fair value.

• The Roundtable on March 4 wrote to the U.S. International Trade Commission (ITC) urging a cautious approach to the investigation, emphasizing the potential economic harm that new tariffs could cause.  Roundtable President and CEO Jeffrey DeBoer concludes in the letter that “… unless supported by conclusive evidence of unfair dumping or subsidies, I urge you to reject calls for new tariffs on U.S. imports of fabricated structural steel.”  (Roundtable comment letter, March 1)
• The antidumping and countervailing duty investigations are based on petitions from the American Institute of Steel Construction.  If  Commerce and the ITC affirm that dumped and/or unfairly subsidized U.S. imports of fabricated structural steel from Canada, China, and Mexico are causing injury to the U.S. industry, punitive duties could be imposed on those imports.  (Reuters,  Feb. 26)

• The Roundtable letter emphasizes the negative effects of FSS tariffs.  “New duties could have a chilling effect on job creation and productive investment, slowing economic growth and reducing employment in industries directly and indirectly affected by real estate development,” DeBoer states.

• In 2017, imports of fabricated structural steel from Canada, China, and Mexico were valued, respectively, at an estimated $658.3 million, $841.7 million, and $406.6 million  (Commerce Department Fact Sheet).

• Rising costs due to the shortage of skilled labor are currently putting pressure on new real estate development.  Steel prices in the United States also rose significantly after the imposition of 25 percent tariffs on many steel imports last March. (Roundtable Weekly, March 9, 2018)

• The declining competitiveness of domestic steel fabricators could be attributed to the unfortunate downstream economic consequences of steel tariffs imposed last year – and may not reflect clear evidence of dumping or illegal subsidies.

• As The Roundtable letter notes, “… there is significant cross-border integration and cooperation in the fabricated structural steel industry.  Foreign fabricators operate facilities in the United States, utilize U.S.-made steel in their finished products, and regularly form joint ventures with U.S. firms to take on large and complex projects.”

• DeBoer also states, “… rather than spurring real estate and infrastructure developers to purchase fabricated steel from domestic sources, unjustified government intervention in the form of new duties may lead potential U.S. buyers to shelve projects that would create well-paying jobs and produce a lasting economic impact in communities.”

The ITC is scheduled to make its preliminary determinations by March 21, 2019.