Policymakers Claim Deal is Close on Bipartisan “Physical” Infrastructure Proposal; Roundtable Chair John Fisk Addresses Infrastructure Investment

Members of a bipartisan group of senators working on a $579 billion “physical” infrastructure proposal said Thursday that final details may be announced as early as July 26, after a procedural vote in the Senate earlier this week failed to allow debate on the evolving measure. (Bloomberg, July 22)

Bipartisan Deal

  • The bipartisan group initially announced their tentative, broad infrastructure agreement with President Biden on June 24. Remaining issues to resolve are finalizing how to pay for the package including measures affecting funding for transit systems. (Roundtable Weekly, June 25 and BGov, July 22)
  • One of the 22 Senate negotiators, Sen. Joe Manchin (R-WV), said, “We had an agreement on 99% when we walked out yesterday afternoon. The pay-fors are pretty much lined up.” (Bloomberg, July 22)
  • Another negotiator, Sen. Mitt Romney (R-UT) added, “I think we’ll get it done over the weekend, and then I hope that we get another cloture vote next week, and that will succeed.” (PolitcoPro, July 22)
  • The bipartisan proposal, if eventually translated into legislation, would need at least 10 Republican votes in the 50-50 Senate to avoid a filibuster and start debate on the measure.

Reconciliation

  • If the deal fails, Democrats may consider paring the “hard” infrastructure proposal with a separate, $3.5 trillion “human” infrastructure plan that addresses climate change, child care and health care. A combined package could be pushed through Congress as part of a budget “reconciliation” process that would bypass the need for Republican votes. (CNBC, July 22)
  • Senate Majority Leader Chuck Schumer (D-NY) on July 21 said he may delay the chamber’s August recess to pass both infrastructure packages. (Roll Call, July 21)
  • House Speaker Nancy Pelosi (D-CA) yesterday reiterated that the House will not act on the Senate’s bipartisan infrastructure plan until the upper chamber also passes a reconciliation bill.  (Transcript of July 22 press conference)

Infrastructure Investment Analysis 

CRE & Infrastructure

  • Roundtable Chair John Fish (Chairman and CEO, Suffolk), above right, on July 21 discussed infrastructure issues, the impact of the pandemic on commercial real estate and the industry’s leadership role in national policy issues with Roundtable member Willy Walker (Chairman and CEO of Walker & Dunlop), left, on the Walker Webcast. (Bisnow and Connect, July 21)
  • Fish noted that economic opportunities resulting from investments in physical infrastructure are equally as important as investment in social infrastructure. Fish noted Boston’s “Big Dig” transportation infrastructure project as an example of a large-scale public investment that returns enormous benefits for the larger community.
  • “Boston made an almost $19 billion investment with the federal government in the Big Dig, and we have received probably $100 billion in returns today so far,” Fish said. “If we didn’t make those investments in the Big Dig back in the 1990s, early 2000s, the city of Boston would not be growing the way that it is right now.” (Walker Webcast and Bisnow)

Fish also commented on The Roundtable’s role in Washington and the importance of CRE industry leadership in the climate change debate. He emphasized that the vast majority of US buildings were constructed in the last century — and that with 40% of US energy use attributable to owners, tenants, and other occupants of residential and commercial structures, now is the opportune time for the industry to reimagine its positive role for future generations. (See 34:45 in the Walker Webcast) 

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Senate Finance Committee Chair Introduces Bill to Restrict 20% Pass-through Business Income Deduction

Senate Finance Committee Chairman Ron Wyden (D-OR), above, unveiled new legislation this week that would phase out the 20-percent pass-through business income deduction for taxpayers earning more than $400 thousand a year. (CNBC, July 21 and Wyden news release, July 20) 

  • The current deduction for qualified business income (Section 199A) allows certain taxpayers, such as sole proprietors, partners in partnerships and shareholders of S-corporations, to deduct up to 20% of their net business income.
  • The deduction was enacted as part of the 2017 Tax Cuts and Jobs Act (TCJA), which  reduced the corporate tax rate by 40%. Since the vast majority of American businesses are taxed as pass-throughs, the deduction ensured that the benefits of TCJA were more evenly distributed.

Why It Matters

  • Section 199A is currently scheduled to expire at the end of 2025. Wyden’s proposed overhaul, if enacted, would start with the 2022 tax year. (CQ and BGov, July 20 | one-page summary  | text of the bill)
  • Wyden estimated that his Small Business Tax Fairness Act could raise $147 billion in revenue, based on a Joint Committee on Taxation analysis from 2018. The Senate Finance Committee Chairman also noted that he may add the bill to the Biden administration’s $3.5 billion “human” infrastructure proposal later this fall. (Tax Notes, July 21) 

Roundtable Response 

  • The Roundtable, as part of a broad business coalition, last month expressed strong opposition to any reductions or repeal of the Section 199A deduction – including phasing it out above a certain income threshold – to the leadership of the tax-writing Senate Finance and House Ways and Means Committees. (Coalition letter, June 22 and Roundtable Weekly, June 25) 
  • The coalition’s letter emphasized how nearly 40 percent of individually- and family-owned businesses closed their doors during the COVID pandemic – and that Section 199A provided critical tax relief during that time.
  • “There are nearly two million real estate partnerships with more than 8.6 million partners in the United States,” said Real Estate Roundtable President and CEO Jeffrey DeBoer, above, in response to the new legislation. “Among other benefits, the pass-through deduction allows these real estate businesses to focus on creating jobs, investing in underserved neighborhoods, and creating productive, sustainable properties that support the local tax base. Congress should permanently extend the pass-through deduction. The proposed restrictions are a step in the wrong direction.”   

President Biden proposed phasing out the Section 199A deduction for qualified business income above $400,000 during his presidential campaign. However, that proposal was not included in his Build Back Better agenda released earlier this year or his formal budget proposal. (Tax Notes, July 21) 

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Senate Hearing Focuses on Need for Federal Pandemic Risk Insurance Program

Senate lawmakers heard testimony yesterday about the importance of establishing a federal pandemic risk / business continuity insurance program during a hearing entitled “Examining Frameworks to Address Future Pandemic Risk.” (See webcast and witness statements).

Public-Private Backstop

  • Senator Bob Menendez (D-NJ), above, chairman of the Senate Banking Subcommittee on Securities, Insurance, and Investment, stated in his opening remarks, “We must determine the extent to which businesses, private insurance providers, and the federal government are able to share the risk of losses due to a pandemic. Each presents different ideas on how much risk is borne by the private sector versus the federal government, and the approach to paying claims.”
  • Menendez also noted that of the eight million businesses with commercial insurance policies with business interruption coverage, 83 percent also carried a clause excluding claims from viral contamination, disease, or pandemic – and that 82 percent of claims have been closed without payment. (Menendez remarks)

Roundtable & Coalition Efforts

  • The Roundtable is part of the Business Continuity Coalition (BCC), which offered testimony during the hearing on how a public-private backstop program for pandemic risk insurance – similar to the Terrorism Risk Insurance Act (TRIA) program – is urgently needed. Charles Landgraf of Arnold & Porter, above, testified on behalf of the BCC. (See written testimony and video at 1:00:20)
  • The coalition includes 44 trade associations and major companies representing more than 70 million workers from healthcare and dining/hospitality to real estate, construction, finance, manufacturing, media and film, live entertainment, professional sports and professional services.
  • The BCC’s testimony emphasized how pandemic risk is possibly the largest unhedged risk exposure in the U.S. economy. The coalition’s statement also shows how a precedent for government involvement in insurance markets exists for a broad range of risks – including terrorism (TRIA), flood (NFIP), and crop risk (FCIC) – where private markets fail to provide the economy with the coverage it needs.
  • A detailed, section-by-section description of the BCC Recommended Proposal urges the design of any pandemic risk insurance program to address core principles, including: scope, availability and affordability; private insurer utilization; a pooling alternative for offerinf non-damage business interruption insurance (NDBI) coverage; stop-loss and quota-share protection; and utilization of reinsurance and capital markets.
  • A New Jersey small business owner, Adenah Bayoh, testified on behalf of the National Restaurant Association (NRA) in support of the BCC proposal, stated, “This country needs a Pandemic Risk Insurance Program to ensure that Main Street businesses and employees have certainty and continuity in the ability to navigate the impact of a future pandemic.”

Both Senate and House subcommittees played important role in the seven-year extension of the Terrorism Risk Insurance Program (TRIP) enacted in 2020. (Roundtable Weekly, Dec. 13 and Dec. 20, 2019)

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Senate Democrats Push Forward on Two Tracks to Advance President Biden’s Infrastructure Agenda

HIghway Infrastructure Houston

Senate Democrats this week moved forward on their two-pronged approach to enact President Joe Biden’s policy agenda – a $579 billion bipartisan “physical” infrastructure package – and a separate $3.5 trillion package addressing “social” infrastructure. Both measures face steep hurdles in the narrowly divided Senate and House. (Wall Street Journal and BGov, July 15)

Two Tracks

  • Senate Budget Committee Democrats agreed in principle on Tuesday to a $3.5 trillion spending increase for Biden’s wide-ranging social agenda that includes education, childcare and climate. (Reuters, July 13 and Roundtable Weekly story below)
  • Separately, President Biden and a bipartisan group of senators on June 24 agreed on a framework to invest in “hard” infrastructure, including transit, roads, bridges and the electrical grid. (White House Fact Sheet and bipartisan Senate group framework, June 24)
  • Senate Majority Leader Chuck Schumer (D-NY) stated last week that he plans to hold votes on both measures before the Senate leaves for its August recess. (AP and CNBC, July 9)

Bipartisan Proposal Deadline

Capitol with evening sky

  • Schumer pushed his schedule forward by announcing the Senate will take a procedural vote next week to begin debate on the unfinished bipartisan proposal. The move forces a tight deadline on Senate negotiators to produce a detailed version of their bipartisan proposal, which has many unresolved issues, including funding sources. (Politico, July 15)
  • Sen. Shelley Moore Capito (R-WV) said Schumer’s decision is an attempt “to put pressure on the group to either put up or shut up,” according to Politico.
  • Sen. Lisa Murkowski (R-AK) said, “The good news-bad news is we’ve got a pretty tight time frame. There are details we have to resolve, and those details involve things like [paying for it].” (Washington Post, July 15)
  • The bipartisan proposal, if translated into legislation, would need any combination of 60 votes in the 50-50 Senate to avoid a filibuster and start debate on the measure.

Budget Blueprint Directive

  • Schumer also said he wants the Senate Budget Committee to agree by July 21 on the details of their separate 10-year budget blueprint, after they agreed this week to its overall $3.5 trillion spending level. (New York Times, July 15)
  • The committee must now build support for a budget resolution, which would give fiscal targets to other Senate committees responsible for producing an eventual, final bill – including how taxes would be raised to pay for it.
  • Senate Budget Committee Chairman Bernie Sanders (I-VT) commented this week, “What happens next is this is an enormously large and complicated piece of legislation and it’s going to take an enormous amount of work amongst 50 people to reach agreement.” (BGov, July 15)
  • Passage of a budget blueprint would also mark the beginning of the reconciliation process, which would allow Democrats to pass an expansive economic package without Republican votes. (Bloomberg, July 15)

SALT Inclusion

  • The Democratic budget outline may include a partial expansion of the state and local income tax deduction (SALT), according to Sen. Bob Menendez of (D-NJ), a member of the Senate Finance Committee.
  • “My understanding is there is a SALT provision in there that would provide relief,” Menendez told NJ Advance Media. (NJ.com, July 15)
  • Since the SALT deduction was capped at $10,000 in the Republican Tax Cuts and Jobs Act of 2017, Democratic lawmakers from high-tax states have urged the inclusion of a SALT expansion in longer-term fiscal packages.

Roundtable Perspective

Avison Young tax webinar

  • Roundtable Senior Vice President & Counsel Ryan McCormick, bottom left in photo, participated in the Avison Young July 14 webinar “Proposed Federal Tax Policy Changes.” Additional participants included Lisa Knee and Kenneth Weissenberg of Eisner Amper.
  • Roundtable Senior Vice President Chip Rodgers participated in the Association of Foreign Investors in Real Estate July 13 webinar “Mid-Year Policy Update.” Additional participants included Elizabeth Espín Stern, Partner at Mayer Brown and Hope Goldman, Senior Associate at The Cohen Group. (Watch video after entering the password “AFIRE!!”)

What’s Next

  • President Biden yesterday commented on the dual track approach in the Senate. “There may be some last-minute discussion as to what mechanism is used to pay for each of these items, both the infrastructure package and the human infrastructure package. But I believe we will get it done.” (White House transcript, July 15)

In the House, Speaker Nancy Pelosi has pledged that the chamber will not move forward until the Senate passes a budget setting up the $3.5 trillion social spending package. (The Mercury News, June 25 and Transcript of Pelosi Press Conference, June 24)

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Senate Committee Advances $100 Billion+ Energy Bill With Provisions Affecting Commercial Real Estate

Senate Energy Committee

The Senate Energy Committee this week passed a bill to authorize more than $100 billion in spending on U.S. energy infrastructure with provisions affecting commercial real estate. The bill may be folded into a larger bipartisan infrastructure package emerging on Capitol Hill. (CQ and Reuters, July 14) 

A Bipartisan Influence 

  • The Energy Infrastructure Act, introduced by Committee Chairman Joe Manchin (D-WV), below, drew the support of all 10 Democrats and three Republicans on the panel. Manchin noted that the committee’s vote “is another critical step toward finalizing our bipartisan infrastructure package, and an important reminder that we can find sensible solutions to difficult problems when we put partisanship aside and work together.” (Manchin news release and committee meeting video, July 14) 

CRE Impact 

Sen.  Joe Manchin (D-WV)

  • The bill includes provisions that would create an avenue for Congressional oversight to improve the Commercial Building Energy Consumption Survey (CBECS) – the key data set collected by the federal government on the basic characteristics of U.S. commercial buildings and how much energy they consume. 
    • Improving the quality and integrity of CBECS data has long been a priority of The Roundtable’s Sustainability Policy Advisory Committee (SPAC) chaired by Tony Malkin (Chairman, President, and CEO, Empire State Realty Trust) , and Vice-Chaired by Dan Egan (Vornado Realty Trust) and Ben Myers (Boston Properties). 
    • “Reliable data from the federal government is crucial to help building owners do their part to address climate change,” said Roundtable President and CEO, Jeffrey DeBoer. “We applaud Chairman Manchin’s efforts through the Energy Infrastructure Act to modernize CBECS data so it reflects the substantial resources our members commit to optimize energy efficiency and reduce greenhouse gas emissions from the built environment.” 
  • CBECS is managed by the U.S. Energy Information Administration (EIA). It provides the foundational data set used by the Environmental Protection Agency (EPA) to certify 1-100 ENERGY STAR scores that “label” top performing buildings for lower energy use and greenhouse gas emissions compared to typical buildings. 
    • According to EPA, 5.6 billion square feet of floor space are ENERGY STAR rated, and these certified assets command a premium up to 16% for sales prices and rental rates. 
  • Despite the critical importance of EIA’s CBECS data to EPA’s ENERGY STAR program, there is currently no requirement for the agencies to coordinate on how they use or verify data. Manchin’s bill would change this. 
    • It would require the agencies to submit to Congress an “information sharing agreement” that explains how EPA’s own vaster and more current set of building data (collected through its Portfolio Manager “energy benchmarking” tool) can be used to supplement CBECS data. 
  • Manchin’s bill would also require EIA to report to Congress on how it might publish CBECS data every three years – on a faster track than EIA’s current six-to-seven year survey cycle, which results in government and private sector reliance on outdated building information in rapidly evolving energy markets. 
    • The bill would also require the agencies to “cross-check” buildings’ energy consumption in different data sets to improve statistical reliability, and take steps to ensure that larger buildings (greater than 250,000 square feet) are fully represented in the federal CBECS set.   

Investments in the Electric Grid, Code Implementation 

Electric towers

  • Other provisions in the Energy Infrastructure Act would:
    • Provide federal grants to States and other entities to harden the electric grid and improve its resiliency to natural and cyber threats;
    • Provide States with money to establish revolving loan funds for building audits and retrofit projects;
    • Direct the Energy Department and the Federal Energy Regulatory Commission (FERC) to develop model guidance for combined heat and power (CHP) systems to provide “backup” or “standby” power to the electric grid;  
    • Create an Energy Department grant program for code agencies, building associations, and other entities to improve implementation and compliance with building energy codes; and
    • Trigger Davis-Bacon “prevailing wage” requirements for any projects or programs receiving federal dollars.  

 Language from the Senate Energy Committee’s bill might ultimately be incorporated into a larger infrastructure package expected to encompass transportation, electric vehicles, broadband, water, and sewer systems. [See Infrastructure story above]   

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2021 Annual Report – Meeting Today’s Challenges & Shaping Tomorrow’s Opportunities

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House Passes Surface Transportation Infrastructure Bill; Negotiations with Senate Ahead

San Diego Transportation Infrastructure

The House yesterday approved a five-year, $760 billon surface transportation and water bill (H.R. 3684) with climate provisions, which Democrats plan to use in infrastructure negotiations with the Senate. The INVEST in America Act passed by a vote of 221 to 201, with only two Republicans joining Democrats in support. (Washington Post, July 1 and Invest in America Act Fact Sheet)

Must-Pass Transportation Funding

  • The House bill does not detail pay-fors yet, but is considered must-pass legislation, as funding for the nation’s surface transportation programs expires on Sept. 30. (Roundtable Weekly, June 11)
  • Roundtable President and CEO Jeffrey DeBoer last week said, “Americans depend on safe and efficient roads, bridges, and mass transit to commute all across the country. Our nation’s buildings and the people in them depend on reliable supplies of water, power, and broadband to function, and meet the evolving demands of business and individual tenants. In turn, infrastructure and real estate are synergistic, and have a two-way relationship.” (Roundtable news release, June 25)

Different Paths

U.S. Capitol Sunny Sky

  • In the Senate, a bipartisan agreement was reached last week with the White House on the outlines of a package addressing “physical” infrastructure. The agreement nearly fell apart after President Biden said the bill was directly linked to the passage of a separate, multi-trillion dollar “human” infrastructure proposal. (RRoundtable Weekly, June 25)
  • The Senate proposal includes $579 billion in new spending and was initially supported by 11 Republicans, although some have since objected. Ten Republican Senators would be needed to overcome a filibuster in the 50-50 chamber. (Bloomberg, June 25 and Punchbowl News, June 30)
  • The costs for all the infrastructure “asset classes” in the bipartisan framework are detailed in a recent White House memo from Brian Deese, Director of the National Economic Council, and Anita Dunn, Senior Adviser. (Deese-Dunn memo)
  • The Senate infrastructure agreement has not yet been translated into legislation. Republican and Democratic Senators disagree if they should move forward with a stand-alone bill, or insist on pairing it with a massive “social” infrastructure package. As Senate talks continue, the House bill passed this week could present another path toward a final infrastructure bill, since it comes with a Sept. 30 deadline. (Politico, June 30)
  • House Speaker Nancy Pelosi (D-CA) plans to reference the House bill as a base for negotiating changes to the Senate’s $973 billion bipartisan infrastructure framework in the coming weeks. (BGov, June 30)
  • House Transportation and Infrastructure Chair Peter DeFazio (D-OR), the lead sponsor of H.R. 3684, said, “I’m suggesting that substantial amounts of the policy in our bill should be negotiated by the White House, the Senate and the House to be part of that bipartisan proposal.” (New York Times, July 1)

What’s Next

White House bright

  • Senate Minority Leader Mitch McConnell (R-KY) this week said President Biden should encourage Pelosi and Senate Majority Leader Chuck Schumer to support the bipartisan proposal without a dependent, separate bill that would move through a restrictive budget “reconciliation” process. According to McConnell’s June 28 statement, “The President cannot let congressional Democrats hold a bipartisan bill hostage over a separate and partisan process..”

  • White House Press Secretary Jen Psaki commented June 30 on the evolving infrastructure proposals, stating, “It’s up to leaders in Congress to move this forward. The President looks forward to signing both pieces of legislation into law.”  (White House Press Briefing transcript)

Senate Democrats are aiming to pass bipartisan infrastructure legislation and send it to the House before the August recess, in hopes that a package could arrive on President Biden’s desk by the end of September. (Reuters, June 29)

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Roundtable-backed Bipartisan Bill Would Correct Condo Construction Tax Accounting Issue; Roundtable Joins Coalition Letter in Defense of Pass-Through Deduction

residential construction condo

Two senior members of the House Ways and Means Committee introduced bipartisan legislation this week that would correct current condominium tax accounting rules.

Condo Accounting Relief

  • House Ways and Means Committee members Bill Pascrell Jr., (D-NJ) and Vern Buchanan, (R-FL) on June 22 announced the Fair Accounting for Condominium Construction Act to encourage greater housing development in high-population and high density-areas. (Pascrell news release)
  • Current condo tax accounting rules require multifamily developers of condominium buildings with five or more residential units to recognize income and pay tax on their expected profit as construction is ongoing — well before pre-sale transactions are closed and full payment is due from the buyer.
  • Homebuilders of single-family homes, townhouses and row houses are not subject to this percentage-of-completion tax accounting rule restriction. As a result, current tax accounting rules discriminate against vertical condominium by unfairly accelerating federal income tax liability for new condominium construction.
  • Rep. Pascrell’s legislation would provide for an exclusion from the percentage-of-completion method for condo construction.

Roundtable Endorsement

  • Roundtable President and CEO Jeffrey DeBoer said, “The Pascrell-Buchanan legislation will modernize the outdated percentage-of-completion tax accounting rules that discriminate against condominium construction. The bill will reduce the cost of building new housing, especially in high-cost areas where greater density is needed. The Real Estate Roundtable commends the sponsors for introducing a common sense measure that, when enacted, will help expand the nation’s housing supply.” (Pascrell news release)

Section 199A Support

Sen. Ron Wyden with American flag

  • Separately, The Roundtable, as part of a broad business coalition, this week also weighed in on the 20-percent tax deduction for qualified business income (Section 199A), which was enacted as part of the 2017 Tax Cuts and Jobs Act. (Roundtable Weekly, April 2)
  • Senate Finance Committee Chairman Ron Wyden (D-OR), above, reportedly plans to propose changes to Section 199A affecting partnerships, LLCs, and other entities taxed only at the individual owner level. According to BloombergTax, Wyden’s legislation, which is still being drafted, will likely aim to start phasing out the deduction for individuals making above $400,000 in annual business income. Wyden also plans to keep the deduction in place until it is scheduled to expire at the end of 2025.
  • The business coalition’s June 22 letter to the leadership of the tax-writing Senate Finance and House Ways and Means Committees expressed strong opposition to any reductions or repeal of the Section 199A deduction, including phasing out the deduction above certain income thresholds.
  • The coalition’s letter emphasizes how nearly 40 percent of individually- and family-owned businesses closed their doors during the COVID pandemic – and that Section 199A provided critical tax relief.

The June 22 letter adds, “Proposals to limit or repeal the deduction would hurt Main Street businesses and result in fewer jobs, lower wages, and less economic growth in thousands of communities across the country. Such changes would amount to a direct tax hike on America’s Main Street employers, a key reason why the tax plan released by the White House in March left the deduction fully intact.”

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CDC Issues Final Extension of National Eviction Moratorium until July 31; California Plans to Reimburse Housing Providers for Past-Due Rent

CDC sign outdoor

The Centers for Disease Control and Prevention (CDC) yesterday issued a final extension of the national moratorium on evictions through July 31 as the Biden administration announced a series of actions involving several federal agencies on housing affordability and evictions. (White House Fact Sheet, Associated Press, Washington Post and New York Times, June 24)

Sluggish Aid Distribution

  • The CDC indicated its action would be the final extension of the federal-level tenant eviction moratorium, first enacted by Congress in March 2020 through the CARES Act pandemic relief law. “Keeping people in their homes and out of crowded or congregate settings — like homeless shelters — by preventing evictions is a key step in helping to stop the spread of COVID-19,” according to the June 24 CDC announcement. (Congressional Research Service, Federal Eviction Moratoriums)
  • The extension also allows more time for federal officials to improve the sluggish distribution of billons in pandemic housing aid authorized by Congress. The urgent financial needs of millions of tenants nationwide have overwhelmed local officials struggling to provide financial assistance under current rules. (Wall Street Journal, June 7)
  • The White House’s announcement yesterday of actions to help state and local governments prevent evictions included a planned summit on housing affordability and evictions, along with new guidance from the Treasury Department aimed at streamlining distribution of emergency aid for renters behind on payment to their housing providers.
  • The Federal Housing Finance Agency (FHFA) yesterday also extended the foreclosure moratorium for mortgages backed by Fannie Mae and Freddie Mac until July 31. (FHFA news release)

Tenants and Housing Providers

  • The National Multifamily Housing Council (NMHC) on June 24 stated, “The continuation of a nationwide, one-size-fits-all, federal eviction moratorium is out of step with the significant progress made in controlling COVID-19 and restoring the economy. Instead of this blanket federal policy, this pandemic has already shown that targeted, efficient relief works.   
  • The statement also noted that earlier this month NMHC released Principles to Work with Residents, which offer practical steps housing providers can take to work hand-in-hand with residents and demonstrate the good faith with which property owners and managers have supported their residents.  

State and Local Action

California Governor Gavin Newsom

  • California Gov. Gavin Newsom, above, and state legislators today agreed to a plan to reimburse housing providers for past-due rent incurred by lower-income tenants during the state’s pandemic eviction moratorium – along with an extension of the moratorium until Sept. 30. (Los Angeles Times, June 25)
  • A senior housing advisor to Newsom told the Associated Press that California likely has enough money from the $5.2 billion in multiple aid packages approved by Congress to cover all of the unpaid rent in the state.

  • Other states and cities have a variety of deadlines related to their own eviction moratoria. CNBC reports that at least 28 state rental aid programs bar landlords from evicting tenants for at least the time period covered by the aid – and in some cases for between 30 and 90 days afterward.

The Roundtable is part of a broad real estate coalition that has consistently urged state, county and municipal officials to distribute the billions in allocated federal funds as soon as possible. (Coalition letter, April 15)

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Bipartisan “Physical” Infrastructure Agreement Announced; Separate Package on “Social Infrastructure” Tied to Reconciliation Path

Infrastructure Chicago interexchange

President Joe Biden and a bipartisan group of senators yesterday announced a tentative agreement to address the nation’s “physical” infrastructure – as Democrats indicated that its passage into law would depend on enactment of a separate, much larger “social” infrastructure bill structured to bypass Republican votes through a budget “reconciliation” process. 

Goals and Pay-Fors 

  • The total cost of the physical infrastructure deal, according to the White House, is $1.2 trillion over eight years, with $579 billion in new spending for investments in transit, roads, bridges, the electrical grid, and other systems. (White House Fact Sheet, June 24)
  • The 21-member bipartisan Senate group also released a document outlining how the agreement would be funded while avoiding new taxes. Among the pay-fors listed: 
    • Leverage private sector investment through incentivizing use of public private partnerships, expanding use of Private Activity Bonds, and encouraging asset recycling.
    • Create direct-pay municipal bonds to attract more investment in public infrastructure.
    • Repurpose unused COVID relief funds. 

Jeff DeBoer RER Meeting

  • Roundtable President and CEO Jeffrey DeBoer, above, said, “Americans depend on safe and efficient roads, bridges, and mass transit to commute all across the country. Our nation’s buildings and the people in them depend on reliable supplies of water, power, and broadband to function, and meet the evolving demands of business and individual tenants. In turn, infrastructure and real estate are synergistic, and have a two-way relationship.”
  • DeBoer added, “The package has potential to impact GDP, promote job growth, keep the U.S. competitive with other countries that are massively investing in their own infrastructure, and expand the overall economy.”

Next: Reconciliation

Capitol Hill trees clouds in the evening

  • President Biden said that signing the bipartisan physical infrastructure deal into law would be contingent on a separate bill addressing his administration’s “social infrastructure” agenda on matters such as education and child care. “If the [physical infrastructure bill] is the only one that comes to me, I’m not signing it.” Biden said (Wall Street Journal, June 24)
  • Democratic leaders are aiming to move the “social” infrastructure bill through the budget reconciliation process which would only require a simple, 51-vote majority in the Senate. (NPR, June 24)
  • House Speaker Nancy Pelosi (D-CA) said yesterday, “We will not take up a bill in the House until the Senate passes the bipartisan bill and a reconciliation bill. If there is no bipartisan bill, then we’ll just go when the Senate passes a reconciliation bill.” (The Hill, June 24)
  • Senate Majority Leader Schumer stated his timeline is to have both the bipartisan infrastructure bill and the budget reconciliation bill passed in July. (Politico, June 24) 

Housing — New FHFA Director 

FHFA logo

  • President Biden on June 23 removed Fannie Mae and Freddie Mac’s chief regulator, hours after the U.S. Supreme Court ruled that the Federal Housing Finance Agency’s (FHFA) loan director is insufficiently accountable to the president. (CNBC and BloombergLaw, June 23)
  • Mark Calabria, a Trump administration appointee, focused much of his efforts at FHFA trying to end Fannie and Freddie’s 12 years under government conservatorship. A Biden White House official said, “It is critical that the agency (FHFA) implement the Administration’s housing policies.” (CNBC, June 23)
  • Calabria was replaced on an acting basis with FHFA Deputy Director Sandra Thompson. Since 2013, Thompson has led FHFA’s housing and regulatory policy, capital policy, financial analysis, fair lending and all mission activities for Fannie Mae, Freddie Mac and the Federal Home Loan Banks. (FHFA statement, June 24) 

The Roundtable’s Real Estate Capital Policy Advisory Committee (RECPAC) works on issues related to Fannie Mae and Freddie Mac and their impact on commercial real estate.

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