Category: Policy Landscape

Stopgap Funding To Keep Government Open Until Dec. 11; House Democrats Pass Revised COVID-19 Stimulus Bill as Pandemic Relief Negotiations Continue

Posted on by Trey Jackson

Capitol Dome Dusk

A stopgap measure to fund the government until Dec. 11 at current spending levels passed the Senate Wednesday and was signed by President Trump early Thursday morning, narrowly avoiding an Oct. 1 government shutdown before the election.  (Reuters, Sept. 30 and Bloomberg, Oct. 1)

  • The “Continuing Resolution,” which passed the House last week, includes short-term funding extensions (with no policy changes) for surface transportation funding, the National Flood Insurance Program, and the EB-5 Regional Center Program.  (Rountable Weekly, Sept. 25, Text of H.R. 8337 and Section-by-section summary of the legislation)
  • As the government operations funding bill advanced this week, House Speaker Nancy Pelosi (D-CA) met face-to-face with Treasury Secretary Steven Mnuchin about an additional COVID-19 relief package for the first time since August.
  • Disagreements between Democrats and Republicans continued over the cost of a relief package, leading House Democrats Thursday night to pass a largely symbolic $2.2 trillion COVID-19 relief bill by a narrow 214-207 vote.  Eighteen Democrats voted against the measure, which is a scaled-down version of the $3 trillion HEROES Act passed by the House in May. The Senate is unlikely to consider the package.  (Forbes and NBC News, Oct. 1)

President Donald Trump comments in WH driveway

  • President Trump’s positive test for the coronavirus today adds great uncertainty to the political landscape and “changes the dynamic” of the pandemic relief talks, according to Pelosi.  “We always have to find a path, that is our responsibility to do so, and I believe that we will,” she said.  (Washington Post, Oct 2)
  • The White House has seemed willing to engage House Democrats in hopes of a deal, yet attracting enough support from Senate Republicans to pass another relief package over $1 trillion is a significant challenge. 
  • Senate Finance Committee Chairman Chuck Grassley (R-IA) yesterday said, “There’s a real revulsion among Republicans to going above $1 trillion and even $1trillion is real difficult.”  (CNN, Sept. 30)
  • Another issue in the negotiations remains Senate Majority Leader Mitch McConnell’s (R-KY) insistence on a liability shield for businesses that are concerned about unlimited COVID-related lawsuits after reopening.  McConnell said yesterday, “I’d like to see another rescue package. We’ve been trying for months to get there. I wish them well.”  (AP, Oct. 1)

House lawmakers will depart Washington today until after the election – unless they are summoned back to vote on a COVID-19 legislative package deal.  The Senate is scheduled to remain in session next week as confirmation hearings begin Oct. 12 for Judge Amy Coney Barrett, the President’s nominee for the US Supreme Court.

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House Approves Government Funding Until Dec. 11 and Passes Comprehensive Energy Package

Posted on by Trey Jackson

Capitol Building Dusk

The House of Representatives on Tuesday night passed a bipartisan Continuing Resolution (CR) by a vote of 359-57 to extend federal government funding through December 11 and avoid a government shutdown at the end of the month.  (Text of H.R. 8337 and Section-by-section summary of the legislation)

  • The CR includes short-term funding extensions (with no policy changes) for surface transportation funding, the National Flood Insurance Program, and the EB-5 Regional Center Program.
  • The Senate is expected to pass the CR next week and send it to President Trump for his signature before FY’2021 starts on October 1, 2020. 

Energy Package Passes

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  • The House yesterday also passed a comprehensive energy package (H.R.4447) that includes sections on building energy codes, federal energy data regarding commercial buildings, and grant programs for underserved communities and green infrastructure.  The measure passed with mostly Democratic support by a 220-185 vote.  (CQ, Sept. 24)
  • One of the major goals of the legislative package is to reduce carbon dioxide emissions by 80% by 2050. (BGov, Sept. 16)
  • The Clean Economy and Jobs Innovation Act includes a section – strongly supported by The Roundtable – that would require the U.S. Environmental Protection Agency (EPA) and the U.S. Energy Information Administration (EIA) to report to Congress through a “coordination agreement” regarding each agency’s separate collection of data regarding commercial building energy consumption.
  • The House bill also includes Roundtable-backed provisions that would bring greater transparency to how the U.S. Department of Energy provides federal recommendations to develop building energy codes, which state and local governments may ultimately adopt through a long-established process. (Roundtable Weekly, June 19, 2019)

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  • The White House on Sept. 21 stated its opposition to H.R. 4447.  Among the reasons for its veto threat, the Administration believes that the bill sets “rigid targets” on Federal buildings to reduce water and energy consumption, and is concerned that State and local governments might establish building codes “not grounded in available technologies.”
  • In the Senate, Energy Committee Chair Lisa Murkowski (R-AL) hopes to reintroduce bipartisan energy legislation (S. 2657) next week.  Sen. Joe Manchin (D-WV), the Senate Energy Committee’s ranking member and co-sponsor of S. 2657, said they are working through issues to overcome an impasse on the building energy codes section. (BGov, Sept. 24)

If the Senate passes its bill, a “conference” would be convened – perhaps during the Lame Duck Congressional session after Election Day – for House and Senate committee leaders to reconcile any differences between their respective packages.

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House Vote on Stopgap Funding Bill Expected Next Week; White House Signals Possible Compromise on Pandemic Relief Package

Posted on by Trey Jackson

Capitol Dome Stormy weather

Congressional policymakers struggled today to finalize a bipartisan spending bill to fund the government past September 30 and avoid a shutdown.  House and Senate lawmakers disagree on when the temporary funding would expire – Republicans want the stopgap to end on Dec. 18 while Democrats are pushing for Feb. 26.  (RollCall, Sept. 14 and Politico, Sept. 18)

  • House Majority Leader Steny Hoyer (D-MD) stated on September 15 that a vote on the continuing resolution (CR) would be held sometime next week.  He added the CR will include language to extend the authorization for surface transportation and the National Flood Insurance Program.  “I am going to bring it to the floor early next week and hope that the Senate passes it either later next week or the first part of the following week,” Hoyer said. (BGov, Sept. 18)

COVID-19 Package Negotiations

Congressional leaders remained at an impasse this week on another coronavirus stimulus package, although the Trump Administration signaled compromise is possible.  Negotiations between Democrats and White House officials stalled in August.  (Roundtable Weekly, Aug. 4)

  • GOP lawmakers initially proposed a $1 trillion coronavirus stimulus proposal in July.  Last week, Senate Republicans attempted to advance a “skinny” COVID-19 aid bill for approximately $500 billion less that was blocked by Democrats. (Roundtable Weekly, Sept. 11).
  • Democrats are currently advocating a package of at least $2.2 trillion following passage of the $3.4 trillion HEROES Act by the House of Representatives in May.  (Axios, Sept. 10)
  • Speaker Nancy Pelosi (D-CA) said on Tuesday that the House would remain in session until an agreement is reached and Hoyer clarified that lawmakers would be on call to return to the Capitol on short notice in the event a deal is reached. (BGov, Sept. 15)
  • After a compromise $1.5 trillion pandemic aid proposal from the bipartisan House Problem Solvers Caucus was rejected on Tuesday by congressional Democrats and Republicans, the White House signaled the following day it was open to further negotiations.  (New York Times, Sept 15 and Vox, Sept. 16)
  • President Trump tweeted on Sept 16, “Go for the much higher numbers, Republicans, it all comes back to the USA anyway (one way or another!).”  White House Chief of Staff Mark Meadows added there was support for more aid to state and local governments and that the Administration would be willing to consider a $1.5 trillion package.  (CNBC, Sept 16.

Schumer and Pelosi joint statement

  • Speaker Pelosi and Senate Minority Leader Chuck Schumer (D-NY) said in a joint statement after Trump’s tweet, “We look forward to hearing from the President’s negotiators that they will finally meet us halfway with a bill that is equal to the massive health and economic crises gripping our nation.”
  • Treasury Secretary Steven Mnuchin said earlier this month that the next stimulus bill could be closer to $1.5 trillion.  Larry Kudlow, director of the White House National Economic Council, said yesterday in response to a question about a $1.5 trillion package: “I would say that’s in the range of plausibility.”  (Wall Street Journal, Sept. 18)
  • Senate Finance Committee Chairman Chuck Grassley (R-IA) yesterday told Bloomberg TV,  “The White House has been making some statements here recently that would never get hardly any Republicans in the United States Senate.  So this used to be the White House versus Pelosi up until about now.  Now the president’s coming in and saying ‘we can maybe go to $1.5 trillion.’ He better be careful of that because I don’t think that bill could get through the United States Senate.”
  • Today, Pelosi told Bloomberg Television that Democrats remain committed to a $2.2 trillion relief package but indicated they may include aid for “airlines, transportation in other forms, restaurants, retail, issues like that” in a relief  package.  (Transcript of Pelosi Interview on Bloomberg’s Balance of Power with David Westin, Sept. 18)

The need for policymakers to produce a pandemic aid package before the November elections will be a focus of discussions during The Roundtable’s Fall Meeting on Sept. 22.  Confirmed speakers include Senate Majority Leader Mitch McConnell (R-KY) and House Financial Services Committee Member Steve Stivers (R-OH).

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Senate Democrats Block Republicans’ COVID-19 Relief Package as Sept 30 Deadline Looms to Fund the Federal Government

Posted on by Trey Jackson

Capitol Building Dusk

Senate Democrats yesterday blocked Republicans’ attempt to advance a scaled-back COVID-19 relief package. The 52-47 procedural vote, mostly along party lines, did not meet the 60-vote threshold to pass, diminishing the possibility that Congress will enact another pandemic recovery measure before the November elections.  (AP, Sept. 10 and Summary of GOP bill)

  • The Republican “skinny” bill (S. 178) proposed this week is approximately $500 billion less than the GOP’s $1 trillion July coronavirus stimulus proposal.  Democrats are currently advocating a package of at least $2.2 trillion following passage of the $3.4 trillion HEROES Act by the House of Representatives in May. (Axios, Sept. 10)
  • Previously, Congress passed coronavirus relief in March with the $2 trillion CARES Act, which increased unemployment benefits until July 31.  Prospects that unemployed Americans may receive an additional $1,200 stimulus check remain uncertain.  (Roundtable Weekly, August 14 and C/Net, Sept. 10)
  • Treasury Secretary Steven Mnuchin on Sunday stated the Trump Administration favored another COVID-19 aid package.  “We want to help businesses that are particularly impacted by this, and we’ll continue to work on proposed new legislation,” Mnuchin told Fox News.  (Real Clear Politics, Sept. 6)
  • Senate Minority Leader Charles E. Schumer (D-NY) yesterday said Republicans “may yet be forced to come back to the table because COVID is the major issue that’s facing the American people.”  (AP, Sept. 10)
  • Congressional negotiations on another round of pandemic stimulus between Democrats and White House officials stalled in August.  President Trump then signed four executive orders aimed at providing unemployment aid, eviction protections, student loan relief and payroll tax deferments.  (Roundtable Weekly, August 14)
  • One executive order authorized an additional $300 per week to unemployed beneficiaries from disaster relief funds. The Federal Emergency Management Agency recently announced those funds are near depletion and the program is closed to new applications. (BGov, Sept. 10)
  • White House officials are considering additional unilateral actions to provide targeted relief, according to The Washington Post.  Stephen Moore, an economic adviser to the White House, said, “They’re trying to figure out what they can do legally, what authorities they have, and there are differences of opinion on that. Trump would like to do another flurry of executive orders that would jump-start the economy.”

U.S. Capitol Dome

Government Funding Expires Sept. 30

Lawmakers returned to Washington this week with a five-week legislative schedule in the Senate and four-weeks for the House.  In addition to COVID-19 related legislation, Congress has until Sept. 30 to pass a funding bill to keep the federal government open beyond the end of FY2020 or face a shutdown before the November elections. 

  • House Speaker Nancy Pelosi (D-CA) and Secretary Mnuchin have reportedly agreed to work on a temporary funding bill without unrelated policy riders.  A spending bill would likely include continued funding for the National Flood Insurance Program and the EB-5 Regional Center Program, which provides visas to foreign nationals who pool their investments to finance U.S. economic development projects.  (CQ, Sept. 3)
  • A Continuing Resolution (CR) would fund the government at current levels, yet how long such a measure would last is uncertain. Senate Majority Leader Mitch McConnell (R-KY) on Wednesday said he supports a stopgap spending bill through December, although Senate Minority Leader Schumer indicated no decisions have been made about the length of a CR.  (The Hill, Sept. 9)

Sen. Roy Blunt (R-MO), chairman of the Senate Republican Policy Committee, said yesterday, “My guess would be that if we leave in September with a CR we will not come back to do anything before the election.”  (Washington Post, Sept. 9)

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Congress Reaches Spending Deal to Avert Shutdown; Roundtable and Business Coalition Urge Year-End TRIA Reauthorization

Posted on by Trey Jackson

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A bipartisan spending deal to fund the government before a Dec. 20 deadline has been agreed to in principle, with details and a vote expected next week, according to top congressional lawmakers.  During the year-end policy rush to attach other legislation to the must-pass spending bill, The Roundtable and a diverse business coalition on Dec. 11 urged Congress to extend the Terrorism Risk Insurance Act (TRIA) for 7 years by passing S. 2877.

  • After rounds of funding negotiations between leaders of Senate and House appropriators this week, House Speaker Nancy Pelosi (D-CA) and Treasury Secretary Steven Mnuchin, House Appropriations Chairwoman Nita Lowey (D-NY) on Thursday reported, “There’s a meeting of the minds.”  (Wall Street Journal, Dec. 12 and The Hill)
  • “Let me say in no uncertain terms, nobody wants to have a government shutdown,” said Sec. Mnuchin.  (Bloomberg Tax, Dec. 12)
  • Funding for the National Flood Insurance and EB-5 investor programs are currently operating under a four-week spending bill signed by President Trump on Nov. 21.  If a new round of funding is not agreed to by policymakers, the programs will shutdown on Dec. 21. (Roundtable Weekly, Nov. 22)
  • The spending agreement would avert a shutdown by spreading nearly $1.4 trillion in discretionary government spending over a dozen appropriations bills for FY2020, which ends Sept. 30, 2020.  The specific bills are likely to be unveiled Monday. (BGov, Dec. 13)
  • The contentious issue of funding for border wall along the Mexican border, which led to a 35-day government shutdown last year, is reportedly part of an agreement on immigration issues. The spending deal would provide the same funding for the border wall that Congress offered for fiscal year 2019 – $1.375 billion, instead of $5 billion requested by the White House.  (Roll Call, Dec. 12)
  • A flurry of policy developments this week may result in lawmakers agreeing to the massive funding bill, a U.S.-Mexico-Canada trade agreement and a Phase One Deal with China.

As lawmakers work to assemble the final spending package to pass by Dec. 20, several other measures – including a seven-year TRIA reauthorization and tax extenders – may compete for inclusion in the final “omnibus” bill.

Roundtable Urging TRIA Reauthorization

On Dec. 11, The Roundtable and a  diverse business coalition sent a letter to all members of the Senate urging action on the Terrorism Risk Insurance Program Reauthorization Act of 2019 (S. 2877) as soon as possible.  The Senate bill would extend TRIA for seven years, “allowing the program to continue providing vital economic protections against acts of terrorism that companies throughout the nation rely on,” according to the letter. 

  • The letter also notes, “Since its initial enactment in 2002, TRIA has served as a vital public-private risk sharing mechanism, ensuring that private terrorism risk insurance coverage remains available to commercial businesses, educational institutions and non-profit organizations at virtually no cost to the taxpayer.”
  • A seven-year TRIA reauthorization passed the House on Nov. 18 (H.R. 4634) as the Senate Banking Committee advanced a similar bill (S. 2877) on Nov. 20.  (Roundtable Weekly, Nov. 22)
  • Last week, The Roundtable and its partners in the Coalition to Insure Against Terrorism (CIAT) urged Senators to include the TRIA reauthorization in a possible year-end spending package.  (CIAT Letter, Dec. 2)
  • Roundtable President and CEO Jeffrey DeBoer commented on the importance of TRIA in a Dec. 12 Bisnow article on “5 Policy Issues That Could Affect Commercial Real Estate In 2020.”
  • “The reason it’s important is you want your assets, the property and potential damage to be covered by insurance, but you also want the people in your building to be covered by insurance if, God forbid, something happened,” DeBoer said. “If you don’t have all risk coverage on your asset, typically it’s very difficult to get financing for that asset from a bank or pension fund.”
  • “We’re optimistic we can get it done before the end of 2019,” he said. “If that does not happen, our top priority in 2020 will be to extend TRIA and maintain that Act.”  (Bisnow, Dec. 12)

House Majority Leader Steny Hoyer (D-MD) said yesterday that a final omnibus containing the spending bill and other measures may be grouped into two packages and voted on Tuesday.  Congress is expected to adjourn for the holiday recess by Dec. 20.  (The Hill, Dec. 12) 

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Tax Measures and TRIA Among Year-End Policy Rush

Posted on by Trey Jackson

Capitol Hill
Congress faces a Dec. 20 deadline to fund the government or risk a shutdown as the impeachment process continues in the House, with a likely trial in the Senate beginning in January.

  • Funding for the National Flood Insurance and EB-5 investor programs are currently operating under a four-week spending bill signed by President Trump on Nov. 21.  Without a spending bill or a “Continuing Resolution” (CR) extending current funding, the programs will shutdown on Dec. 21 until Congress reaches a resolution. (Roundtable Weekly, Nov. 22)
  • Several legislative measures – including an end-of-year tax policy bill and reauthorization of the Terrorism Risk Insurance Act (TRIA) – may compete for inclusion in a must-pass “omnibus” spending package. Yet lawmakers may not have enough time to complete fiscal 2020 appropriations before current funding runs out in two weeks.  Another CR is a possibility before Congress breaks for the holiday.
  • The contentious issue of appropriating Department of Homeland Security (DHS) funds for a wall on the border with Mexico remains a sticking point in negotiations. This same issue led to a historic, 35-day government shutdown from Dec. 22, 2018 to Jan. 25, 2019.
  • This year, the Trump Administration has requested $8.6 billion for Fiscal Year 2020 to build the wall – and an additional $3.6 billion to restore military base funding that was previously transferred toward partial wall construction.  An administration official said President Trump will not sign any nondefense bill until funding for DHS and a border wall are resolved.  (CQ, Dec. 4)
  • Among the legislative measures of importance to commercial real estate that may be included in a year-end omnibus are tax extenders and technical corrections.
  • Negotiations on a tax package and extenders have been difficult, according to Senate Finance Chairman Chuck Grassley (R-IA). “It’s different this year from other years,” he said. (Politico, Dec. 5)
  • House Ways and Means Committee Chairman Richie Neal (D-MA) said yesterday that some technical corrections to the 2017 tax overhaul law could become part of a year-end tax bill.  “I’m interested in some technical corrections,” Neal said, adding that they could include a fix to an error that prevents restaurants and retailers from immediately expensing the cost of interior renovations.  (BGov Tax, Dec. 5)
  • A top legislative priority for CRE that is also outstanding is a seven-year TRIA reauthorization, which passed the House on Nov. 18 (H.R. 4634) as the Senate Banking Committee advanced a similar bill (S. 2877) on Nov. 20.  (Roundtable Weekly, Nov. 22)
  • The Real Estate Roundtable is working with its partners in the Coalition to Insure Against Terrorism (CIAT) to urge Senators to include the TRIA reauthorization in a possible year-end spending package.  CIAT sent a letter this week to all Senators urging them to co-sponsor S. 2877 and secure its passage before the end of 2019. (CIAT Letter, Dec. 2)
  • The Roundtable and its CIAT partners continue to meet with Senate offices to encourage increased support for S. 2877. Sen. Thom Tillis (R-NC) is the lead sponsor, with 17 bipartisan cosponsors.
  • As Congress attempts to juggle many legislative priorities – including an updated version of a trade agreement with Mexico and Canada (USMCA) and a bill on prescription drug costs – the pressure to pass multiple appropriations bills funding government agencies may lead to a Continuing Resolution extending current funding.

House Majority Leader Steny Hoyer (D-MD) told reporters this week, “I don’t want to contemplate having bills pushed over [into 2020] because we can’t get agreement.”  (CQ, Dec. 4)

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Congress Passes Government Funding Through November 21; President Trump Expected to Sign

Posted on by Trey Jackson

U.S. Capitol

A “Continuing Resolution” (CR) to fund the government at current levels through November 21 was approved by the Senate yesterday after House passage last week, sending the stopgap measure to President Trump for his signature. 

  • A senior White House official said President Trump will sign the CR, which avoids the threat of a government shutdown on October 1, the start of the government’s fiscal year.  The measure includes funding for programs of importance to commercial real estate, including the EB-5 Immigrant Investor Regional Center Program and National Flood Insurance Program.  (BGov, Sept. 26 and Roll Call, Sept. 23)

  • The CR gives lawmakers more time to negotiate spending levels and policy differences, since none of the 12 annual discretionary spending bills have been signed into law yet.  One of the most contentious issues in the appropriations process is funding for a wall on the southern border, which is overseen by the Department of Homeland Security.  Disagreements over wall funding led to the historic 35-day partial government shutdown in 2018–2019. (Politico, Jan. 25)

  • President Trump’s request for $5 billion for a southern border wall resulted in Democrats proposing an amendment in the Senate Appropriations Committee on Thursday to block the funds.  (Washington Post, Sept. 26)

  • Senate Appropriations Chairman Richard C. Shelby (R-AL) said, “As we close out this month, I think, we must acknowledge the progress we have made while also recognizing that we still have a long way to go in fulfilling our duty to fund the government.  Most importantly for those negotiations to end in success … my Democratic colleagues and the president will have to reach an agreement, once again, on border security.”

  • The appropriations dispute exists despite an agreement over the summer between Congress and the administration on a broad deal that allocated more than $2.7 trillion in discretionary federal spending over two years and suspended the debt ceiling until July 2021.  (Roundtable Weekly, Aug. 2)

Congress will return from a two-week recess on Oct. 15 to face the Nov. 21 funding deadline, or the prospect of another partial government shutdown.   The tight timeframe poses the possibility of more stopgap measures if differences over funding levels cannot be resolved.  Another scenario is the prospect of a full-year CR.  (CQ and Politico, Sept. 26)

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Congress Returns to Packed Agenda, Funding Deadlines

Posted on by Trey Jackson
U.S. Capitol

Congress returned this week from recess to a full legislative agenda and a September 30 government funding deadline.  (Roll Call, Sept. 10) 

  • None of the 12 annual discretionary spending bills have been signed into law yet.  Lawmakers  still must negotiate appropriations affecting contentious issues such as funding for a wall on the southern border, which is overseen by the Department of Homeland Security.  Disagreements over wall funding led to the historic 35-day partial government shutdown in 2018–2019. (Politico, Jan. 25) 
  • Of interest to real estate, funding for the EB-5 Immigrant Investor Regional Center Program and the National Flood Insurance Program (NFIP) is also set to expire September 30 – the end of the current fiscal year.  FY’20 begins October 1.  (Roundtable Weekly, Feb. 15). 
  • In order to give lawmakers more time to negotiate spending levels and policy differences, congressional leaders have endorsed a stopgap funding bill, or Continuing Resolution (CR).  The CR emerging from discussions between House and Senate appropriators is expected to run through November 22.  Both EB-5 and NFIP are expected to be included within a funding extension measure.  (Wall Street Journal, Sept. 10 and The Hill, Sept. 9)   
     
  • Several tax priorities are also vying for attention and could form the basis for an end-of-year agreement on tax legislation.  These issues include tax extenders, clean energy incentives and tax technical corrections. 
     
  • On September 4, the National Multifamily Housing Council, The Real Estate Roundtable, and other industry organizations sent a letter to Congressional tax-writers urging them to enact a technical correction related to the cost recovery period for residential rental property.  The correction would clarify that taxpayers electing out of the new limitation on business interest deductibility can depreciate their existing rental properties over 30 years, rather than 40 years.  The 30-year period applies to newly acquired or constructed residential rental properties, and should also apply to existing holdings.  (Letter on Cost Recovery Period for Residential Rental Property under Section 163(j), Sept. 4) 

Congress is scheduled to be in legislative session for three weeks in September, three weeks in October and a few weeks in November.  Both chambers aim to adjourn for the year by December 13, 2019.

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New York Overhauls Rent Regulations as Affordable Housing Shortage Attracts National Attention

Posted on by Trey Jackson

Major changes to New York City’s rent regulations passed in Albany last week have drawn attention to a nationwide resurgence of rent control laws considered by cities and states across the nation.  ( Wall Street Journal , June 14).

By keeping more New York City apartments permanently in the regulated system, the new law will diminish the number of available market-rate units, drive-up market-rate rents, and perpetuate an imbalance in affordable housing supply and demand.  
  • The law signed by Governor Andrew Cuomo on June 14 directly impacts about 40 percent of New York City’s apartment stock and expands rent stabilization to counties across the state.  The law generally freezes “stabilized” NYC apartments from ever moving to market rental rates.  (New York Times ,June 12 and June 17).  
  • By keeping more apartments permanently in the regulated system, the new law will diminish the number of available market-rate units, drive-up market-rate rents, and perpetuate an imbalance in affordable housing supply and demand.  Affluent Manhattan residents in stabilized apartments who enjoy a rental windfall will stay in place, while lower-income residents in outer boroughs will likely bear higher rent burdens.  (Wall Street Journal, June 12) 
  • The New York law also dis-incentivizes owners from modernizing aging housing with new roofs, boilers, security systems, and other improvements.  By capping annual rent increases that an owner can charge for major building-wide capital investments, one critic has warned that the law could lead to a “shabbification of rental housing.”  (Citylab, June 13). 
  • Real Estate Board of New York (REBNY) President John Banks stated, “The harmful impact of this legislation will be profound for New York City’s economic future … This legislation will keep rent lower for some, but also significantly diminish housing quality and lead to less tax revenue to pay for vital government services.”  (REBNY statement, June 18) 

Affordable Housing: A National Issue

New York’s action is part of a growing trend of jurisdictions purporting to address skyrocketing housing costs though rent regulations.  Meanwhile, candidates on the 2020 campaign trail are offering plans to address the nation’s “affordable housing crisis.”  ( NPR,  June 18)  

    An  interactive national map provided by the National Multifamily Housing Council (NMHC) details the movement of state capitals eying rent control measures.   
    • An interactive national map provided by the National Multifamily Housing Council (NMHC) details the movement of state capitals eying rent control measures.  
    • A real estate industry coalition recently opposed a rent control measure under consideration in California.  In a letter to Sacramento lawmakers, the coalition explained that increasing housing supplies with new construction built by public-private partnerships will “help bring the price point down,” and that it is “more effective to tie assistance to a renter rather than a rental unit.” (NMHC, June 17) 
    • Proposals in Congress that aim to expand and incentivize the construction of affordable housing would be more effective in addressing the nation’s housing challenges (compared to government-mandated rental price-fixing).  Recently proposed measures would expand the low-income housing tax credit program (e.g., S. 1703,  H.R. 3077), and create a similar tax credit geared to moderate-income, workforce housing (S. 3365, 115th Cong.). 
    • Housing and Urban Development Secretary Ben Carson has offered a strategy to boost affordable housing by encouraging localities to ease their own building restrictions. Carson’s proposal has gained support of House Financial Services Committee Chair Maxine Waters (D-CA).  It would provide federal monetary incentives for local governments to ease land-use and zoning regulatory barriers that can feed into “NIMBY-opposition” against affordable housing and drive-up development and construction costs. (Politico, June 14) 

    “Although they are well-intended, we know from decades of experience that rent control regulations distort markets, create shortages, and depress business investments.  They often harm the communities they seek to help,” said Jeffrey D. DeBoer, President and CEO of The Real Estate Roundtable. “Policy makers should avoid rent control measures and rather seek solutions that grow America’s residential stock, to enable our communities to provide safe and decent housing for low-income families and the teachers and first-responders in our workforce.”

    Senate Finance Committee Announces Tax “Extenders” Task Forces; House Ways & Means Committee Examines Climate Change

    Posted on by Trey Jackson

    U.S. Senate Finance Committee Chairman Chuck Grassley (R-IA) and Ranking Member Ron Wyden (D-OR) yesterday announced the formation of several bipartisan taskforces to examine and help permanently resolve the fate of 42 expired and expiring tax provisions.  (Senate Finance Committee Announcement, May 16)

     

    U.S. Senate Finance Committee Chairman Chuck Grassley (R-IA), above, and Ranking Member Ron Wyden (D-OR) yesterday announced the formation of several bipartisan taskforces to examine and help permanently resolve the fate of 42 expired and expiring tax provisions.  (Senate Finance Committee Announcement and Video of Grassley statement, May 16)

    		 
    • Among the expired provisions are a deduction for energy efficient commercial buildings (sec. 179D), the new markets tax credit, and the exclusion of income for debt forgiveness on a principal home. The committee members assigned to each task force are detailed in a committee news release.  
    • In conjunction with the announcement, the Joint Committee on Taxation (JCT) issued a report yesterday on the tax provisions that expired in 2017 and 2018, as well as those set to expire this year.  The taskforces are expected to complete their work by the end of June.  (Grassley statement, May 16)
    • “We’ll ask the taskforces to work with stakeholders, other Senate offices, and interested parties to consider the original purpose of the policy and whether the need for the provision continues today,” said Chairman Grassley.  “If so, we’ll ask the taskforce to identify possible solutions that would provide long-term certainty in these areas.” (Video of Grassley statement, May 16)
    • Legislation supported by The Roundtable is currently pending to fix a technical error from the Tax Cut and Jobs Act regarding depreciation of interior building improvements, known as Qualified Improvement Property (“QIP”).  (Roundtable Weekly,  March 15 and QIP Policy Comment Letter, April 26) 
    • In the House, Ways and Means Committee Chairman Richard Neal (D-MA) has suggesting tax extenders should be part of a more comprehensive tax package.  (CQ, March 16)
    • This week, a Ways and Means hearing focused on “The Economic and Health Consequences of Climate Change.”  In his opening statement, Chairman Neal said, “Climate change is real. The business community understands this, and savvy companies are planning accordingly.”  He added, “… it’s time for Congress to get on board. We cannot rely solely on the business community to solve this problem for us. The federal government has a significant role to play in creating real pathways for meaningful, long-term economic growth that creates solutions to reduce carbon emissions.”  (Chairman Neal’s Opening Statement, May 15)
    • The Real Estate Roundtable and a broad coalition of real estate and environmental organizations last week urged Senate and House tax writers to establish an accelerated depreciation schedule for a new category of Energy Efficient Qualified Improvement Property installed in buildings – or “E-QUIP.”  (Coalition E-QUIP Letter, May 8)
    • Roundtable President and CEO Jeffrey DeBoer said, “The purpose of establishing a new E-QUIP category in the tax code is to stimulate productive, capital investment on a national level that modernizes our nation’s building infrastructure while helping to lower greenhouse gas emissions.  As Congress considers potential tax, infrastructure, and climate legislation, the E-QUIP proposal should have bipartisan appeal on a range of important policies prioritized by Republicans and Democrats.”  (Roundtable Weekly, May 10) 

    E-QUIP and tax extenders will be among several tax policy issues discussed during The Roundtable’s June 11-12 Annual Meeting in Washington, DC.