News Type: Roundtable Weekly

The Roundtable Congratulates President-Elect Trump and Looks Forward to Jointly Addressing Key Policy Priorities    

Posted on by Abigail Grenadier

The 2024 election cycle concluded this week, with Donald J. Trump elected as President of the United States. The Roundtable congratulated the President-elect and the newly elected members of Congress. As the nation transitions to new leadership, The Roundtable is looking forward to collaborating with the new administration and Congress on policies critical to the economy, jobs, housing, and the health of real estate markets.

Election Results

  • At the time the election was called, President-elect Trump had received 295 electoral votes compared to Vice President Harris’ 226. Trump also took the lead in the popular vote, with 72,773,748 votes compared to Harris’ 68,123,125. (The New York Times, Nov. 7)
  • On the Congressional front, the Republican party took control of the Senate with 53 seats. Neither party has reached the necessary 218 seats to secure a majority in the House, but Republicans are in the lead with 211 seats. (AP News, Nov. 7)

Focused Hard Work Ahead Regarding Tax Legislation, Deregulation, and Housing Policy Shifts

  • Donald Trump’s victory in the presidential election, Republicans’ victory in the Senate, and the likely Republican House majority dramatically reshuffle the dynamics for policy debates on key issues related to real estate. The Roundtable’s initial thoughts on how the election results impact our priorities, strategy and outlook include:
  • Tax Policy Extensions and New Proposals: The incoming administration is expected to extend 2017 tax cuts, restore bonus depreciation, and support Opportunity Zone incentives. New pro-growth tax measures could also gain traction.
  • Deregulation in Energy and Financial Services: Deregulatory shifts may impact climate and financial services regulations, prioritizing oil and gas development, easing bank regulatory and SEC, HUD, and FHFA oversight. Federal rollbacks could increase regulatory challenges across states as they implement varying climate standards. Ensuring grid reliability could become an even more prominent issue in the energy policy arena.
  • Focus on Credit Markets and Housing: Anticipated policy objectives include reducing mortgage rates, revisiting Fannie Mae and Freddie Mac conservatorship, and reducing housing costs by cutting regulatory barriers. Potential Treasury appointments reflect a push toward expanded credit access and reduced regulatory burden.

Roundtable Statement

Earlier this week, Roundtable President and CEO Jeffrey D. DeBoer issued a statement congratulating President-elect Trump and pledging to work with the new administration and Congress on pressing commercial real estate issues.

“We look forward to working with the President-elect and his team to advance policies that will expand the nation’s economy, boost job creation, increase the supply and affordability of housing, and address the many important national policy issues related to constructing, financing and maintaining modern real estate, work, living, and recreational buildings.

Strong real estate markets provide millions of American jobs, support strong local budgets, and help millions of people plan for retirement through their pension and retirement savings investments in real estate.

The strength of real estate and the benefits the industry provides to all Americans, depends on fair, consistent, and forward-looking policies at all levels of government.

Real estate public policies are nonpartisan. The Real Estate Roundtable supports policies based on objective economic principles that are responsive to changing economic cycles and sensitive to societal demands.

Tax and financial regulatory reform, housing investment, immigration issues, energy policy, and physical and cyber security each present opportunities to advance the economy and stability of U.S. real estate markets.

We are excited to offer our support, expertise and assistance to President-elect Trump and the new Congress. We are honored to contribute meaningfully to the strength and prosperity of our nation,” said DeBoer.

Office Markets Stabilize as More Companies Mandate In-Person Work

Posted on by Abigail Grenadier

After years of acquiescing to remote and hybrid work arrangements, major companies are reversing course, a positive sign for demand for office space and the continued recovery of America’s downtowns and city centers.

Office Leasing Gains Traction

  • Office leasing demand has seen a noticeable uptick, partially thanks to broader factors such as greater economic stability and a stronger push from companies for employees to return to the office. (The Business Journal, Oct. 14)
  • Amazon and HSBC lead the charge: Amazon has ordered corporate staff back five days a week and is searching for more office space in Manhattan. HSBC Bank increased its U.S. headquarters space by 35,000 square feet after attendance rose to 80%. (WSJ, Oct. 29)
  • Dell Technologies and 3M are also tightening in-office requirements, with Dell mandating full-time office work for its global sales teams, and 3M seeking higher attendance from senior employees. (Bloomberg, Oct. 21)
  • More firms requiring in-office presence: The proportion of firms requiring employees in-office five days a week rose to 33% in Q3, up from 31% in Q2, according to Flex Index, which tracks workplace strategies. (WSJ, Oct. 29)
  • Tech sector demand surges: Over the past twelve months, demand for office space has surged in tech-centric cities such as Seattle, Boston, and San Francisco, as tech employers revisit their office needs and reconsider remote work policies. (VTO News Release, Oct. 30)

Vacancy Rates Show Signs of Stabilizing

  • Vacancy rates show signs of stabilization: The vacancy rate is stabilizing at a near-record level of 13.8%, up from 9.4% in the fourth quarter of 2019.
  • Since the second quarter of 2020, U.S. office tenants have vacated close to 209 million square feet of space, the highest amount ever for a four-and-half-year period, according to data firm CoStar Group. (WSJ, Oct. 29)
  • Although vacancy rates remain a concern, leasing activity is up in major cities across the US, such as New York City, Washington, D.C., Boston, and San Francisco. (Roundtable Weekly, Oct. 18)
  • The 46th edition of PwC and the Urban Land Institute’s Emerging Trends in Real Estate report released this week, depicts the commercial real estate industry as gradually returning to normalcy after the significant disruptions caused by the pandemic. “Investors’ focus is shifting back to the typical cyclical changes that occur throughout business cycles,” the report noted. (GlobeSt. Nov. 1 | Report, Oct. 29)

The Roundtable’s Q4 2024 Sentiment Survey which measures senior executives’ confidence and expectations about the commercial real estate market environment will be available next week.

CRE Industry Advocates for Tax Relief to Support Recovery and Stability

Posted on by Abigail Grenadier

As the U.S. commercial real estate sector enters a critical recovery period, industry leaders are urging policymakers to retain key tax policies from the Tax Cuts and Jobs Act of 2017 (TCJA), many of which expire at the end of 2025. (Reuters, Oct. 28)

Tax Landscape

  • The outcome of the November presidential election will play a critical role in shaping year-end tax bill discussions.
  • If either candidate secures the presidency and achieves unified control of Congress, they may urge their congressional allies to delay any tax negotiations until 2025.
  • The Roundtable is preparing for potential tax legislation in the lame-duck session, though action may be delayed until next year’s debate when major provisions in the TCJA expire. (Roundtable Weekly, Oct. 25)
  • In early October, RER submitted comments to Capitol Hill on the pending expiration of the TCJA and ways in which tax policy can support long-term investment, economic stability, and the creation of affordable housing. (Roundtable Weekly, Oct. 4)

Industry Advocacy

  • Speaking to Reuters, Real Estate Roundtable President and CEO Jeffrey DeBoer noted the difficult economic backdrop for real estate as the tax debate has gathered steam, “Over the last 18 months … operating costs have … risen dramatically at the same time the availability of capital and credit have diminished…. All of that creates stress and challenges in the CRE marketplace.” (Reuters, Oct. 28)
  • With the tax reform debate heating up in Washington, maintaining sound tax rules that both reflect the economics of real estate transactions and encourage capital formation is a priority for the CRE industry.
  • “Depreciation deductions and interest expense deductions. They’re not tax breaks. They’re the cost of doing business,” said Ryan McCormick (SVP & Counsel, RER) while discussing housing policy in Politico’s Morning Tax.  (Politico, Oct. 28)
  • RER Member Hessam Nadji (President & CEO, Marcus & Millichap) appeared on CNBC International Squawk Box this week and spoke on the upcoming elections, international investor re-engagement with U.S. CRE, zoning and private-public partnerships, and the impact of government policies, particularly regarding housing.

RER Tax Priorities

Roundtable tax priorities heading into 2025 include:

  • Capital formation and capital gains: Preserving key elements of the tax code (e.g., capital gains preference, like-kind exchanges, step-up in basis at death) that encourage productive real estate investment, risk-taking, and growth.
  • Strong partnership, pass–through, and entity choice rules: Extending tax provisions like section 199A that allow pass-through businesses to compete on a level playing field with public corporations.  
  • Affordable housing and community development incentives: Advocating for tax incentives tied to affordable housing, energy efficiency, Opportunity Zones, and commercial-to-residential conversions.
  • Removing barriers to job-creating foreign investment:  The tax system should avoid discriminatory policies that discourage job-creating foreign investment in US real estate and infrastructure.  

Tax Bill Negotiators to Watch

  • Sen. Mike Crapo (R-ID): If Republicans take control of the Senate, Crapo is poised to lead the Senate Finance Committee in 2025. Given his influence over Senate Republicans, many of whom followed his opposition to this year’s bipartisan tax bill, Crapo’s stance on a year-end tax deal will be pivotal.
  • Sen. Ron Wyden (D-OR): Wyden has shown a willingness to strike deals, as evidenced by his work with Rep. Smith on this year’s agreement. He might be eager to pass as much of that legislation as possible during the lame-duck session.
  • Rep. Jason Smith (R-MO): As chair of the House Ways and Means Committee, Smith’s perspective will be highly influential in the lame-duck session, with Republicans still holding the House majority.

The Roundtable is committed to working with lawmakers to ensure the U.S. maintains a competitive tax code that encourages capital formation, rewards entrepreneurial risk-taking, and supports critical policy objectives, including accessible and affordable housing and safe and healthy communities.

Zoom Town Hall Recap: Election Insights and CRE Policy Priorities

Posted on by Abigail Grenadier

Last week, The Roundtable hosted a Zoom Town Hall to discuss the upcoming election, along with policy priorities for the lame-duck session and the upcoming year. (Watch Town Hall)

Town Hall

  • The Roundtable’s Chair Kathleen McCarthy (Global Co-Head of Blackstone Real Estate, Blackstone) kicked off the meeting thanking and recognizing Roundtable Immediate Past Chair John Fish (Chairman and CEO, Suffolk) and board members for their stewardship and support.
  • The Town Hall featured Jonathan Martin, Politics Bureau Chief and Senior Political Columnist for POLITICO. He shared his expert insights on the political landscape, highlighting the most significant races and trends leading up to the election.

Election Forecast

  • Senate flip likely: Martin emphasized the high likelihood of a Senate flip.
  • Split government impact: If Vice President Kamala Harris wins the presidential election, the Senate and House could be controlled by opposing parties. Conversely, a Trump victory might ensure Republican control of both chambers.
  • The policy angle: Regardless of the election outcome, key commercial real estate issues will remain central to legislative discussions.
  • “We are preparing for potential action during the lame-duck session, but definitely positioning ourselves for what may come next year,” said Roundtable President & CEO Jeffrey DeBoer. “No matter the election outcome, core issues for the real estate industry—tax policy, energy, housing affordability and liquidity—will be front and center.”

Roundtable Policy Priorities: What’s Next?

  • Tax policy: The Roundtable is preparing for potential tax legislation in the lame-duck session, although it likely will be delayed until next year’s debate regarding the expiration of the 2017 tax cuts. Priorities include:
    • Capital formation and capital gains: Preserving key elements of the tax code (e.g., capital gains preference, like-kind exchanges) that encourage productive real estate investment, risk-taking, and growth.
    • Strong partnership, pass–through, and entity choice rules. Extending tax provisions like section 199A that allow pass-through businesses to compete on a level playing field with public corporations.  
    • Foreign investment and competitiveness: Ensuring the U.S. remains competitive by maintaining tax rules and regulations that attract foreign capital to infrastructure and real estate.
    • Affordable housing incentives: RER advocacy will continue for tax incentives tied to affordable housing, energy efficiency, Opportunity Zones, and commercial-to-residential conversions.

  • Energy & climate: Expect policy movement regardless of election outcomes. Key focus areas include:
    • Mandates on buildings: state and local governments are increasingly adopting Building Performance Standard (BPS) laws that impose mandates on buildings to limit emissions and energy use, setting new requirements for energy and climate performance in real estate.
      • RER recently published a BPS policy guidebook reflecting our ongoing commitment to addressing climate change while ensuring the economic sustainability of real estate investments and the communities they support. (Roundtable Weekly, Oct. 11)
    • Disclosure requirements: Future climate risk disclosures for public companies remain on the radar, along with possible passage of the Energy Permitting Reform Act of 2024 (S. 4753), legislation aimed at streamlining and modernizing the permitting process for energy infrastructure projects.

  • Capital & credit: RER continues to monitor the looming wave of maturing commercial real estate loans, Basel III Endgame proposals, and SEC rules affecting capital formation.
    • Insurance rate spike: The real estate industry is dealing with a historic spike in insurance rates, exacerbated by recent hurricanes. RER continues to work constructively with policymakers and stakeholders to address commercial insurance gaps and rising costs.
    • Basel III Endgame: With regulators at an apparent impasse on revisions to the original Basel III Endgame proposal, we do not expect any further action on the revised proposal before the elections.

RER’s Real Estate Capital Policy Advisory Committee (RECPAC) will be meeting in person on November 19, 2024 in New York to discuss the outcome of the election on the political landscape, the economic outlook, capital and debt markets and much more.

Electricity Supply Issues Teed-Up for Lame-Duck

Posted on by Abigail Grenadier

A bipartisan measure to address the growing stress on the nation’s electricity grid could see a window for opportunity in Congress’s lame-duck session after the November 5 elections. The Energy Permitting Reform Act of 2024 (S. 4753), co-sponsored by Senate Energy Committee Chairman Joe Manchin (I-WV) and Ranking Member John Barrasso (R-WY), would streamline approvals for major energy development projects amid increasing demands for power.

Why it Matters

  • Permitting reform has been a bipartisan priority reflected by more than two dozen bills introduced by both parties in the 118th Congress.
  • S. 4753 aims to streamline reviews and permitting processing for energy infrastructure. Expediting approvals for pending and new projects are long-standing goals for renewable energy companies, as well as the oil and gas sector.
  • With Senator Manchin retiring at the end of his current term, the bill could be a capstone to his legislative legacy. He has urged Senate Majority Leader Chuck Schumer (D-NY) to bring it to the floor before year-end. (E&E News, Sep. 23)
  • Leader Schumer (D-NY) told reporters in July, “I’d like to get permitting reform done.”  (The Hill, July, 26)
  • The bipartisan bill has its controversies. While climate advocates argue that the bill’s fossil fuel provisions could lock in emissions for decades, others point to the need for large-scale clean energy supplies and grid reliability. Third-party analyses indicate that even with these fossil fuel provisions, the bill would ultimately lead to net emissions reductions.
  • The Roundtable believes permitting reform is essential for advancing our economy’s energy transition. The current fragmented system of environmental reviews and approvals hinders progress on launching new projects and delivering cleaner, reliable electricity to our nation’s buildings.

The High Stakes for U.S. Grid

  • America’s power grid is under increasing strain as the digital economy accelerates.
  • Data centers, AI, and electric vehicles are all demanding more power. Current infrastructure is not equipped to handle it.
  • As The Roundtable’s recent Policy Guide on building performance standards states, the transition to a digital economy raises serious concerns about electricity availability. “AI could soon need as much electricity as an entire country”  as “[v]ast swaths of the US are at risk of running short of power.” (Roundtable Weekly, Oct. 11)
  • A Wood Mackenzie report predicts that parts of the U.S. could see a 15% jump in power demand by 2030—posing major challenges for an already-stressed grid. (Politico, Oct. 18).
  • According to the latest CBRE North America Data Center Trends study, the rapid growth of AI, coupled with soaring demand for cloud services, has driven a 70% surge in data center construction across the US over the past six months—along with an unrelenting need for the electricity to power them. (Cybernews, Aug. 20)
  • Without permitting reform, meeting this growing demand will become more difficult and expensive. (Forbes, Sep. 2)

Congress returns to Washington in a matter of weeks and has the opportunity to pass the Energy Permitting Reform Act and address these grid challenges.

Solutions to Tackle the Affordable Housing Crisis

Posted on by Abigail Grenadier

While recent rate cuts from the Federal Reserve are providing relief for both CRE and housing markets, the affordability crisis remains at the forefront of policy debates in Washington.

Roundtable Housing Priorities

  • Sustained recovery and resolution of the affordability crisis will require continued policy reform, increased housing supply, and greater collaboration between public and private sectors. (Roundtable Weekly, Sept. 27)
  • The Roundtable continues to advocate for housing policies that:
  • Streamline Permitting and Zoning: Simplify permitting and zoning processes to reduce delays in housing projects.
  • Promote Modular Construction: Encourage modular construction to accelerate the production of new housing supply.
  • Strengthen Public-Private Partnerships: Foster collaboration between public and private sectors to support innovative construction methods.
  • Expand Housing Incentives: Advocate for expanding the low-income housing tax credit (LIHTC), improving the real estate-related clean energy tax provisions in the Inflation Reduction Act, and introducing new incentives for the conversion of obsolete commercial buildings into affordable housing. (Roundtable Weekly, Oct. 4)
  • Housing policy has become a central issue in the 2024 presidential campaigns as well. (Associated Press, Aug. 27)
  • Vice President Kamala Harris has proposed $25,000 in down payment assistance for first-time buyers and expanding federal funds to streamline local zoning laws and build 3 million homes.
  • Former President Donald Trump countered with plans to reduce housing demand by restricting illegal immigration and opening federal land for housing development while opposing policies that promote urban densification, arguing they harm suburban property values.

Alternative Housing Solutions

  • Property Conversions: The conversion of underutilized and often vacant buildings offers a tremendous opportunity to improve the built environment and uplift a surrounding locality.
  • Modular Housing: A recent survey from The Amherst Group shows that Americans are warming up to modular housing as an alternative solution to the ongoing housing supply shortage. Nearly 90% of respondents find modular homes appealing, and four out of five (81%) would consider living in one themselves.
  • With 71% of respondents interested in seeing more alternative housing types in their neighborhoods, modular homes could play a key role in expanding housing supply. (News Release, Oct. 8)
  • Roundtable member and Amherst Chairman, CEO and CIO Sean Dobson emphasized the potential of modular housing:  “While the offsite construction process has been around for decades, it has yet to be adopted as a mainstream way to generate high-quality housing supply at scale. As a result, homebuilding remains overdue for disruption and innovation. Amid ongoing supply constraints in the U.S., we think modular construction is an important part of the solution.” (News Release, Oct. 8)

The Roundtable encourages policymakers to support federal incentives for affordable housing and zoning reforms to streamline housing development. These measures can help ensure that high-quality, affordable options, such as modular homes, are available to meet rising demand.

Back to the Office: Vacancies Ease, Optimism Grows

Posted on by Abigail Grenadier

Office vacancy rates are beginning to show signs of easing as companies ramp up efforts to bring employees back to the office, fueling optimism across commercial real estate. The office sector also saw key highlights in property conversions and sustainability efforts this week.

Driving Factors

  • Office leasing demand has seen a noticeable uptick, partially thanks to broader factors such as greater economic stability and a stronger push from companies for employees to return to the office. (The Business Journal, Oct. 14)
  • A mix of lower office vacancy rates and high-profile return-to-office mandates, like Amazon’s, could help stabilize a sector still grappling with the remote work shift. (Roundtable Weekly, Sept. 20)

Market Sentiment

  • Although vacancy rates remain a concern, leasing activity is up in major cities across the US, such as New York City, Washington, D.C., Boston, and San Francisco. (Boston RE Times, Oct. 4; GlobeSt., Oct. 14; SF Examiner, Oct. 15 | Bisnow, Oct. 16)
  • As reported in our Q3 2024 Sentiment Index, which measures commercial real estate executives’ confidence and expectations about the industry environment, there is growing confidence in the future of the commercial real estate market despite ongoing challenges. (Roundtable Weekly, Sept. 6)
  • The Roundtable’s Q4 Sentiment Index survey is currently underway and expected to be released in early November.
  • Additionally, JLL’s latest Global Future of Work survey found that organizations are “planning to increase and rebalance organizational headcount in the coming years and many are ready to invest into their real estate, expecting to increase budget and footprint.”
  • Over 60% of survey respondents anticipate increased workplace utilization in the next five years, prioritizing more efficient and responsible use of real estate assets. (JLL Survey 2024)

Property Conversions

Construction skyline
  • Office-to-residential conversions are gaining traction as a solution to address high vacancy rates and housing shortages.
  • In 2024, the number of office spaces being converted into apartments increased to 55,000, a staggering 357% jump from 2021, according to data from Yardi Matrix. (New York Post, Oct. 14)
  • Property conversions can be a cost-effective means to re-purpose assets, provide new, affordable housing, revive struggling city centers and small businesses, restore local revenue sources, and reduce energy consumption. (Roundtable Weekly, Oct. 4)

Sustainable Innovation

  • Investments in sustainability efforts also reflect growing confidence in the industry rebound and stability heading into 2025.
  • “The Federal Buy Clean Initiative, and BXP’s aligned construction specifications, send a strong demand signal to concrete producers that helps drive market transformation,” said Ben Myers, Co-Vice Chair of the Roundtable’s Sustainability Policy Advisory Committee (Senior Vice President, BXP). “As an active developer, we are interested in cost-effective methods of supply chain engagement to create more sustainable outcomes.”

The Roundtable continues to advocate for energy-efficient solutions, supporting property conversions and innovative building methods that align with the evolving needs of modern offices. These efforts are essential to creating sustainable workspaces and revitalizing cities.

Zoom Town Hall: 2024 Election Insights With POLITICO’s Jonathan Martin

Posted on by Abigail Grenadier

With the 2024 elections rapidly approaching, the outcome could significantly shape the future of the economy and the commercial real estate (CRE) industry.

Later this afternoon at 3:00 PM ET, The Roundtable will host an exclusive Zoom Town Hall session featuring Jonathan Martin, Politics Bureau Chief and Senior Political Columnist for POLITICO. He will share his expert insights on the political landscape, highlighting the most significant races and trends leading up to the election.

In addition to Martin’s analysis, The Roundtable will give a brief update on its policy priorities on tax policy, capital and credit issues, energy and sustainability initiatives, housing affordability, and more.

This Zoom session, provided to RER members only, will provide a unique opportunity to gain political insight from one of the country’s top analysts, alongside critical updates on the Roundtable advocacy efforts.

RER members will receive a link to register for the event.

If you are unable to join the session, a recording will be available next week.

Hurricanes Helene and Milton: The Case for NFIP Reform

Posted on by Abigail Grenadier

Commercial real estate owners face soaring insurance costs as back-to-back hurricanes place financial strain on insurers and the National Flood Insurance Program (NFIP). The implications for property owners, especially in coastal areas, are severe, with insurance premiums skyrocketing and coverage harder to secure.

Storm Impact and Market Challenges

  • Milton is the second major storm to strike Florida in less than two weeks. The hurricane could cause over $50 billion in damages, with worst-case losses approaching $175 billion, according to Wall Street analysts. (CNBC, Oct. 8)
  • Potential insured losses from Milton are expected to be substantial and could amount to $60 billion, according to an S&P Global Inc. report. (Bloomberg, Oct. 9)
  • Without a robust, long-term NFIP, property owners face escalating risks from future storms, leaving both homeowners and commercial real estate properties vulnerable. (Roundtable Weekly, Oct. 4)
  • With more severe storms expected, CRE property owners are struggling to cover rising costs—sometimes opting to forego upgrades or sell assets to manage financial pressures. (NYT, Oct. 8)
  • According to Marsh McLennan, premiums on commercial properties have increased by an average of 11% nationwide, and even more in storm-prone areas. The report also states that owners with “significant exposures and sustained losses” can expect rates to climb by 50% to 100%.
  • “High-magnitude catastrophe losses, the enduring challenges of the pandemic on the supply chain, fluctuations in the employment market, and rising inflation have banded together to create a perfect storm that threatens the sustainability of every property portfolio.” (Marsh McLennan report)

Federal Challenges and Response

  • Lawmakers remain divided on addressing FEMA’s potential disaster fund shortfall, which could jeopardize rebuilding infrastructure like roads and water facilities. Speaker Mike Johnson has indicated no plans for Congress to reconvene and approve more disaster funding. (PoliticoPro, Oct. 9)
  • The Biden administration is confident that FEMA’s disaster relief fund has sufficient resources to support recovery efforts for both Helene and Milton. However, they have raised concerns about the fund’s solvency through the remainder of the hurricane season ending in November. (PoliticoPro, Oct. 10)
  • Milton could also spark debate again in Washington, D.C., about the need for a national catastrophe insurance program. (PoliticoPro, Oct. 9)

NFIP Under Pressure

  • With nearly two million NFIP policies in areas hit by Helene and Milton, the program’s $15 billion in coverage may fall short, prompting debates over whether to raise the NFIP’s borrowing authority, forgive debt, or appropriate funds to cover policyholders’ claims. (Politico, Oct. 9)
  • House Financial Services Chair Patrick McHenry (R-NC) and the committee’s lead Democrat, Rep. Maxine Waters (D-CA), have previously collaborated on long-term NFIP reform. However, they now hold differing opinions on how to free up funds for claims if needed.
  • Rep. McHenry leans toward raising the NFIP’s borrowing cap or appropriating additional funds, while Rep. Waters has consistently supported debt forgiveness. Currently, Congress has set a $30.4 billion limit on the NFIP’s borrowing capacity from the Treasury.
  • The Roundtable has been a long-standing supporter of a long-term reauthorization of the NFIP with appropriate reforms. These measures are essential for residential markets, overall natural catastrophe insurance market capacity, and the broader economy.

The Roundtable, along with its industry partners, continues to work constructively with policymakers and stakeholders to address commercial insurance gaps and rising costs. RER will continue advocating for targeted policy solutions that can help alleviate increased insurance costs for housing providers nationwide.

Roundtable Offers Policy Guide to US-DOE to Shape Effective Building Performance Standards

Posted on by Abigail Grenadier

The Real Estate Roundtable urged the U.S. Department of Energy (DOE) on Wednesday to follow a newly released policy guide as the agency awards grants for states and localities to develop Building Performance Standards (BPS). The guidebook developed by the Roundtable’s Sustainability Policy Advisory Committee (SPAC) reflects RER’s ongoing commitment to addressing climate change while ensuring the economic sustainability of real estate investments and the communities they support. (Letter, Oct. 8)

Building Performance Standards (BPS)

  • State and local governments are increasingly adopting BPS laws that impose energy and climate performance mandates on real estate.
  • These laws typically set annual limits on how much energy buildings can use and how much greenhouse gases (GHGs) they can emit, with an ultimate goal of reaching net zero emissions around 2050.
  • International groups also apply pressure for energy and emissions performance limits on buildings to drive global investments in real estate. (Roundtable Weekly, July 19)

  • The Department of Energy (DOE) in August announced $240 million in federal grants to help states and localities implement BPS laws. (Roundtable Weekly, Sept 6).

  • The inconsistent nationwide BPS “patchwork” poses significant challenges for property owners and policymakers alike. These laws must be backed by studies and adequate resources to ensure they achieve significant emission reductions—while continuing to further parallel efforts to support the recovery of business districts and increase the supply of affordable housing.
  • “Our members face a variety of local and state legislative initiatives around building performance standards which lack consistent, implementable, fact-based frameworks. The federal government has the research and analysis heft to create and maintain a voluntary system of fair, reasonable, and effective BPS guidelines to help inform these efforts ” said Anthony E. Malkin, Chair of the Roundtable’s SPAC (Chairman and CEO, Empire State Realty Trust).
  • “Our peer-reviewed, 20-point policy guide intends to help start and guide a discussion of the subject,” he continued. 
Source: US-DOE, IMT (map as of August 2024)

BPS Policy Guide: 20 Key Points

  • RER’s policy guide should shape how DOE disburses tens of millions of taxpayer-funded federal grants to states and cities across the country. It outlines 20 key points that should be prioritized when developing and implementing BPS laws. These include:
  • Develop science-based and data-driven standards. Policymakers should base building performance targets on robust cost-benefit analyses, housing affordability studies, grid resilience assessments, and actual data on energy usage.

  • Align standards across jurisdictions. Property owners face confusing and inconsistent mandates. Policymakers should harmonize rules to ease multi-jurisdictional compliance and use landmark federal programs as a uniform means for compliance.

  • Provide clear compliance resources and fair remedies. Policymakers should ensure that BPS laws come with transparent, accessible compliance pathways that building owners can follow. This includes offering practical resources, technical assistance, and incentive programs to help owners plan for “life-cycle” capital investments and retrofits. Enforcement mechanisms should offer building owners reasonable opportunities to correct non-compliance before imposing fines.

RER welcomes engagement on the 20-point policy guide to help craft BPS laws that are fair and effective.