News Type: Roundtable Weekly

Key Policymakers Testify on COVID-19 Relief and CRE; Congress Extends PPP until August 8; House Passes Bill Extending Eviction Moratorium 12 Months

Posted on by Trey Jackson

House Financial Services Committee hearing with masks and social distancing

Federal Reserve Chairman Jerome Powell and Treasury Secretary Steven Mnuchin offered their views on potential COVID-19 relief for commercial real estate during a June 30 House Financial Services Committee that focused on the federal government’s response to the pandemic. (HFS Committee hearing, June 30)

  • Barr added that without federal intervention, the commercial real estate sector could experience a wave of foreclosures and defaults.  He asked if the Federal Reserve has the authority to establish a credit lending facility to service commercial real estate. 
  • Powell responded, “I’ve been very focused on this. You’ve got people who can’t currently service debt, you’ve got these inflexible arrangements. So there’s a serious problem here that needs to get fixed and we’re racking our brains to see how – how it could be something we could do by lending, but that’s really all what we can do … is create more debt.”
  • Mnuchin acknowledged the June 22 letter and responded that CRE sectors such as hotels may be considered for direct aid in the next round of coronavirus relief. 
  • Mnuchin stated, “This is a large challenge. So, we have been working with the Fed, we have not yet figured out a way to set up a facility. So, it’s not out of a lack of interest or a lack of it desire. There are structural problems. And let me just add, in many of these cases, these companies don’t need more debt. They need support. So, one of the things we will want to look at in the next CARES Act, as I said, is additional support for these hardest hit industries. As the (Fed) Chair has said, there’s a difference between lending and spending.”

  • Rep. Bill Posey (R-FL) warned that hoteliers’ inability to make payments threatens the servicing of CMBS. Munchin responded that the CMBS industry has restrictive covenants limiting their ability to utilize relief programs. “And that’s why one of the things I do think we need to look at in the next CARES Act is additional funding for these industries that are the hardest hit so they can continue to rehire people so that, as occupancy increases, that they have employees that they can maintain. We need to look at additional support for these hard hit industries,” Munchin said. 

Mnuchin also discussed the Administration’s work with Congress to address the economic fallout from the outbreak with The Roundtable’s President and CEO Jeffrey DeBoer during the organization’s Virtual Annual Meeting last month. Secretary Mnuchin emphasized how recent improvements to the Paycheck Protection Program (PPP) has helped small business borrowers deal with the economic impact of the global pandemic.  He added that the Administration is also considering business liability protections and pandemic risk insurance.  (Watch the discussion on The Roundtable’s Youtube channel here.)

Extending and Repurposing PPP

The House and Senate this week passed an extension to the Paycheck Protection Program (PPP), allowing small businesses to apply for these loans until August 8. President Trump is expected to sign the extension into law. (CQ, July 1)  

  • Mnuchin’s testimony on June 30 came on the same the day that the (PPP) was set to expire, with approximately $130 billion of the original $670 billion allocated unused.  The PPP was created by Congress in March to enable small businesses to apply for forgivable loans during the pandemic.
  • Mnuchin stated that as of June 27, the PPP had approved 4.8 million small businesses loans totaling $520 billion, supporting an estimated 50 million jobs. (ThinkAdvisor, June 30)

Mnuchin also told the House Financial Services Committee (HFSC) that he supports congressional legislation to repurpose the remaining PPP funds.  “There appears to be bipartisan support in the Senate to repurpose the (funds) for PPP, extending it to businesses that are most hard hit, that had a requirement that their revenues have dropped significantly, things like restaurants and hotels and others where it is critical they get people back to work.”

House Passes Eviction Moratorium Extension

HFSC Chairwoman Maxine Waters (D-CA) led the effort for House passage this week of the Emergency Housing Protections and Relief Act of 2020 (H.R. 7301), which supplements housing assistance provisions passed in May as part of the HEROES Act.  (Rep. Waters House floor statement, June 30 and Roundtable Weekly, May 15.)

  • The National Multifamily Housing Council (NMHC) and National Apartment Association (NAA) sent a June 29 letter to Congressional leadership expressing concerns about the bill’s expansion of the federal eviction moratorium that would undermine the benefits of other provisions within the legislation.  
  • The bill also would also provide multifamily building owners who are economically impacted by the pandemic the ability to obtain forbearance on making mortgage payments for a maximum of 360 days, whether those loans are federally-regulated or from a non-federal lender.  
  • The NMHC letter offers strong support for several measures within H.R. 7301, including liquidity for multifamily mortgages and servicers, additional funding for Section 8 Housing Choice Vouchers and support for rural housing.
  • However, the letter also notes that the bill substantially expands the federal eviction moratorium established in the CARES Act to virtually all single family and multifamily homes for 12 months.  The moratorium extension is also untethered to any actual COVID-19 impact on a renter and disconnected from a renters’ qualification or acceptance of emergency rental assistance.

The letter states, “A protracted eviction moratorium does not provide a sustainable, long-term solution for American families facing financial hardship and we oppose the inclusion of this provision for the severe consequences it will have that ultimately blunt the impact of the positive components of the legislation.”  (NMHC, June 29)

Next COVID-19 Relief Package

This week’s action on COVID-19 related policy comes as Democrats and Republicans consider an additional coronavirus relief package after they return from the congressional July 4 recess.

  • The House in May passed its own $3 trillion pandemic recovery package, which includes billions in aid for state and local governments.  Republicans have signaled they may be open to another COVID-19 bill, but on a measured basis. (Forbes, May 21 and Roundtable Weekly, May 22) 
  • Senate Majority Leader Mitch McConnell (R-KY) this week said the goal for finishing the next coronavirus package would be before Congress breaks for its lengthy August break.
  • McConnell assessed that when policymakers return on July 20, it “dovetails nicely with the perfect time to take an assessment of the economy and the progress we’re making on the health care front and see if there is additional assistance needed for our health care providers,” McConnell said. (Politico, June 30) 

Congress will have an 11-day window in late July to act on another stimulus package.  President Trump yesterday said he supports another round of direct stimulus payments as part of a potential phase four coronavirus relief package.  “We’re working on a ‘phase four.’ We’re working with Congress,” Trump said. “Work has started.”  (Axios, July 1 and Fox Business, July 2)

#  #  #

House Democrats Propose Climate Framework With Measures to Reduce Buildings’ Carbon Footprint

Posted on by Trey Jackson

Solving The Climate Crisis - House Democrats' Proposal

The House Select Committee on the Climate Crisis on June 30 released its blueprint for “Solving the Climate Crisis.”  The plan proposes a menu of mandates and incentives for multiple industry sectors – including commercial and residential real estate – with a goal to achieve a 100% “net zero” emissions U.S. economy by 2050.  (Summary of the 547-page report)

  • The plan is widely viewed as a roadmap the Democrats may follow for developing climate policy legislation after the November elections.  The plan is currently not expected to see any action in the GOP-controlled Senate. (Axios, July 1)
  • A series of 1-page summaries describes specific recommendations to reduce GHG emissions for “Buildings” – and for the “Electricity,” “Financial Risk,” Transportation,” and “Manufacturing” sectors.
  • The “Buildings” summary covers both new construction and existing buildings.  It includes proposals to:
    • Set federal energy benchmarking requirements for commercial buildings (which a number of states and localities have already adopted); 
    • Eliminate emissions from new buildings by 2030 by incentivizing states and cities to adopt net-zero codes;
    • Use tax incentives to drive commercial building retrofits;
    • Boost onsite clean energy generation by increasing tax incentives and rebates;
    • Reduce emissions from building construction by incentivizing building reuse and requiring federal buildings to use lower-emission building materials;
    • Increase availability of energy efficient affordable housing; and
    • For federal buildings, enact heightened standards for deep energy retrofits and emissions intensity targets.
  • Select Committee Chair Kathy Castor (D-FL) stated, “Our plan will put people back to work and rebuild in a way that benefits all of us. That means environmental justice and our vulnerable communities are at the center of the solutions we propose.” (June 30 news release)
  • The Roundtable submitted a comment letter to the Select Committee during its public participation period (see Roundtable Weekly, November 22, 2019).
  • The Roundtable’s recently released 2020 Annual Report affirms a proactive “Energy and Climate” policy agenda developed by its Sustainability Policy Advisory Committee, chaired by Anthony E. Malkin (Chairman, President and CEO, Empire State Realty Trust) and vice-chaired by Dan Egan (Senior Vice President, Vornado Realty Trust). 

The Empire State Building’s successful sustainability efforts are the focus of a recent Washington Post  profile, which details the “deep retrofit”  led by Malkin and completed in 2010.  “A decade later, the Empire State Building saves more than $4 million a year on its electric bill; the project is expected to pay for itself twice over,” the Post reports.  (Empire State of Green, May 27, 2020)

#  #  # 

Roundtable to Establish Standing Policy Committee on Diversity and Inclusion; Industry Executives Discuss Needed Actions

Posted on by Trey Jackson

Roundtable Meeting

The Real Estate Roundtable’s Board of Directors recently approved establishment of a new standing committee to address inclusivity and diversity in the industry and as part of the organization’s policy agenda.  (Roundtable Weekly, June 12)

  • The new committee’s working name is the “Real Estate Diversity and Inclusion Policy Advisory Committee” (REDIPAC).  Its intended objectives are to: 
    • Encourage Roundtable members to adopt and report on quantifiable standards for attracting workers across all skill- and corporate-levels from minority and other pools of talent historically under-represented in our industry;
    • Leverage The Roundtable’s existing advocacy agenda on tax, capital, climate/energy, housing, and infrastructure policies with a view toward also including policy elements aimed to dismantle racial and other barriers to equality; and
    • Build coalitions with civil rights and real estate industry organizations to scale the effectiveness of joint initiatives.
  • The new committee’s mission statement, leadership and requests for participants are expected to be announced in July.
  • This week, African American real estate executives discussed actions needed to expand diversity at all levels of the industry during a webinar on “The Black Experience in Real Estate,” hosted by NYU’s Schack Institute of Real Estate. 
  • Schack Associate Dean Sam Chandan lead the remote discussion with four panelists:  
  • The panelists expressed their hope that recent executive-level responses to the deaths of George Floyd and other African Americans at the hands of police officers represent not simply a “moment but a movement.”  The webinar participants also agreed what is needed now are tangible actions that could bring measurable, positive changes to increase opportunities for minorities in real estate. (The Real Deal, June 26) and Bloomberg, June 23, “Black Real Estate Executives Seek Lasting Change in Diversity”)
  • The four leaders discussed their personal experiences with systemic racism and recommended inclusivity steps that CRE leaders should take in their companies.  (Registration required to watch the June 9 webinar) 

Separately, a June 24 Walker & Dunlop webinar focused on the first African American woman REIT CEO – Leslie Hale of RLJ Lodging Trust.  Roundtable Member Willy Walker, W&D’s Chairman & CEO, hosted the discussion, which addressed the opportunities for increasing diversity in commercial real estate, Ms. Hale’s approach to diversity and inclusion, the current outlook for the hospitality and retail industries, the U.S. economy and more. 

#  #  # 

More Than 100 Members of Congress Urge Trump Administration to Aid CMBS Borrowers

Posted on by Trey Jackson

Buildings sky x475w

Commercial mortgage-backed security borrowers could face a historic wave of foreclosures starting this fall, impacting local communities and jobs across the country, without a long-term federal relief plan to combat liquidity deficiencies facing commercial real estate borrowers caused by the COVID-19 pandemic.  That is the bipartisan message sent on June 22 to the Federal Reserve and Trump Administration by more than 100 members of Congress, who are seeking support for real estate borrowers unable to keep up with payments on debt tied to CMBS.  (Wall Street Journal, June 23)

  • The bipartisan letter acknowledges the existence of the Fed’s lending facilities, yet warns about “the looming crisis in commercial real estate adversely impacted by the COVID-19 pandemic, including the $540 billion Commercial Mortgage-Backed Security (CMBS) market that, if left unchecked, may lead to a wave of foreclosures, exacerbating the current downturn in the U.S. economy and ultimately result in permanent job loss in multiple industries and communities across the country.”   (Congressional letter, June 22)
  • The congressional letter also requests the Fed to “devise a relief plan for these borrowers, who through no fault of their own, have experienced a significant drop in revenue on account of the COVID-19 pandemic and related governmental orders.”
  • Rep. Van Taylor (R-TX) is leading the effort to show policymakers the troubles faced by many hotels, shopping malls and office buildings that borrow money in the CMBS market – with some  owners expressing concerns their properties could go to foreclosure.  (Wall Street Journal, June 4)
  • A June 26 letter from four national hotel trade associations to Treasury and the Fed emphasizes the unique pressures they face when pursuing loans using the Fed’s Main Street Lending Program (MSLP), which utilizes strict criteria based on Earnings Before Interest, Taxes, Depreciation and Amortization (EBITDA).  
  • The hoteliers detail multiple unnecessary obstacles in accessing desperately needed liquidity and how the industry’s asset-heavy business model shut them out from utilizing the MSLP because of the rigid EBITDA leverage test. “Most hotels are financed via mortgage debt, which means that their total outstanding debt is generally already above the maximum six-times EBITDA threshold established in the Main Street Lending Facility,” the letter notes.
  • The hotel coalition letter also details specific “actions that would allow this critical industry access to liquidity to keep workers employed and help survive the crisis.”
  • The Real Estate Roundtable and Nareit on April 22 wrote to Treasury Secretary Steven Mnuchin and Federal Reserve Chairman Jerome Powell urging that additional measures be adopted to expand the scope of the MSLP to forestall further disruption and economic dislocations in the commercial real estate sector during the pandemic.  (MSLP comment letter, April 22)
  • Previous industry letters to the Fed on March 24 and April 14 addressed the need to broaden the range of a separate credit facility – the Term Asset Backed Securities Facility (TALF).  Those letters requested that TALF eligible collateral include both outstanding (legacy) CMBS, commercial mortgage loans and newly issued collateralized loan obligations.  On April 9, the Fed confirmed that the TALF would be expanded to include triple-A rated legacy non-agency CMBS and loans.

     

  • The Federal Reserve Bank of New York reported this week that the TALF had done $145,213,948 of “commercial mortgage” collateralized financing – legacy CMBS – out of a total of $252,155,890 of total volume, or 57.59%.

  • Overall, the CMBS market over the next two years could see 13,000 loans totaling $148 billion go into default, according to a recent analysis by CoStar Risk Analytics.  (CoStar News, April 30)
  • Additionally Fitch reports that $21 billion of CMBS loans are now in Special Servicing due to the coronavirus pandemic’s impact on tenants and borrowers.  This total is more than double the amount of CMBS loans that went into special servicing all of last year.  (GlobeSt, June 23 and The Real Deal, June 22 and Fitch, June 17)
  • Real Capital Analytics reports that the volume of deals for U.S. commercial properties including, offices and hotels, plummeted 79% in May compared with a year earlier. Deals to purchase hotels plunged 95% in May, the largest drop of any property type. Retail property transactions were down 83%.  (BGov, June 25)

The June 22 congressional letter led by Rep.Taylor requests that Treasury and the Fed urgently consider targeted economic support to bridge the temporary liquidity deficiencies facing all commercial real estate borrowers.  The letter concludes, “We believe an opportunity exists for responsible federal government investment in the commercial real estate market to provide a pathway to stabilize affected properties, the local jobs and businesses they enable, and the neighborhoods they serve.”

#  #  #

Q2 Economic Sentiment: Commercial Real Estate Execs Confirm COVID-19 Market Downturn

Posted on by Trey Jackson

Q2 2020 Sentiment Index - Homepage

Commercial real estate executives confirmed a downturn in Q2 market conditions due to job losses and business shutdowns related to COVID-19, according to The Real Estate Roundtable’s 2020 Q2 Economic Sentiment Index released today.  The report also shows there is an expectation for an improvement in market conditions by next year, dependent upon the return of jobs and the ability to safely reopen businesses. 

  • “The commercial real estate industry, like all industries, experienced in the second quarter a sudden onset of economic disruption due to business lockdowns and stay-at-home shutdown orders put in place to combat the pandemic,” said Real Estate Roundtable President and CEO Jeffrey DeBoer.  “The economic damage to commercial real estate has been particularly harmful for the retail and lodging sectors of the industry.  Although our Q2 survey results show there is hope for improved conditions within the next year, there are significant concerns that other sectors of the industry could be dragged down if jobs don’t rebound and government assistance tapers off.  The fear is that business and residential tenants may be suddenly unable to pay rent beyond the sectors already impacted and struggling to come back,” DeBoer added.
  • The report’s Topline Findings include:
    • The Real Estate Roundtable Q2 2020 Sentiment Index registered a score of 38, a decrease of 14 points from the first quarter of 2020.   Many respondents confirm tenants are having increased difficulties paying their rent obligations as a result of massive job losses.  Most survey participants expect the eventual reopening of businesses and resolution of rental obligations will lead to improved real estate market conditions.
    • Many survey respondents have seen the industry quickly adapt to new social distancing environments by implementing technologies and online processes that provide some continuity for current operations.  Market volatility is leading to uncertainty about how future retail real estate and multifamily demand will be affected.
    • Job losses have led to widespread economic uncertainty.  Lockdowns and stay-at-home orders have also impaired the ability of survey respondents to accurately value commercial real estate assets.  As a result, transactions have slowed until a medical solution to the outbreak may allow reopening of properties, renewed business activity and underwriting of investments. 
    • The majority of survey participants indicated the availability of debt and equity are worse today than one year ago.  Many respondents indicated they believe there is plenty of equity capital on the sidelines, but it is unwilling to invest in a market without price discovery.  As for debt markets, debt funds have been largely absent from the market and only the most pristine assets are qualifying for new debt capital.  
    • The Roundtable’s Q2 Overall Sentiment Index is scored on a scale of 1 to 100 by averaging Current and Future Indices; any score over 50 is viewed as positive. 
  • The Q2 Current Conditions Index dropped to 13 from Q1’s score of 55 – yet the Q2 Future Conditions Index increased 12 points to register 62 when compared to Q1’s score of 50.
  • The 49-point disparity between the Q2 Current Index (13) and Future Index (62) is the most significant difference registered by The Roundtable’s Quarterly Economic Sentiment Survey in its 12-year history.  The next highest disparity previously occurred in Q1 2009, when the difference between current and future indices registered 40 points during the financial crisis.
  • DeBoer noted, “The unprecedented wave of job losses is disproportionally impacting women, minorities and veterans.  Unemployment and business closures have added tremendous stress on people worried about taking care of their families and maintaining their housing. And it also has added to the worries of business owners, particularly in terms of meeting their payroll and rent obligations.  The Roundtable continues to support the Federal government’s efforts to date including the CARES Act, the FED lending facilities and the expanded unemployment benefits.  In addition to finding ways to improve and extend these programs, we now call on Congress to create a temporary assistance program specifically designed to help COVID impacted residential and commercial tenants meet their rent obligations.”
  • He added, “Such a program would help people and businesses cope with the current economic downturn. It would help building owners maintain their workforce that is necessary to ensure that visitors to buildings are safe and  healthy.  It would ease pressure on financial institutions and local governments.  The next COVID relief bill must include a rent assistance program for people and businesses.”

Data for the Q2 survey was gathered by Chicago-based FPL Associates on The Roundtable’s behalf.  The Roundtable’s Q3 Sentiment Index will be released in early August.

#  #  #

House Democrats Release Infrastructure Package Details; Vote Expected Next Week

Posted on by Trey Jackson

Capitol Dome close x475W

House Democrats on June 22 released details of a $1.5 trillion infrastructure package – the Moving Forward Act  (H.R. 2) – that they plan to bring to a vote before July 4, although the measure’s prospects in the GOP-controlled Senate are uncertain. (Bill Text | Section-by-Section | Fact Sheet)

  • The comprehensive Democratic infrastructure package, totaling about $1 trillion, has been combined with a $494 billion surface transportation bill – the INVEST in America Act – that would fund roads, bridges, and mass transit before current finding for the Highway Trust Fund expires on September 30.   (House Transportation and Infrastructure Committee news release, June 22)
  • The broad Moving Forward Act also addresses the nation’s housing, water, broadband, clean energy, and education systems.  More than 300 amendments to the package are expected to be considered on Monday by the House Rules Committee before it is advanced to the House floor.  (Miller & Chevalier, June 25)
  • About two-thirds of the infrastructure package does not appear to have specifics for funding, although some financing measures are listed for elements of the bill.  (CQ, June 22). 
  • The House Transportation and Infrastructure (T&I) Committee issued an excerpt of the 2,309-page bill containing the revenue provisions. 
  • Rep. Richard Neal, (D-MA), chair of the House Ways and Means Committee, floated the idea of reinstating “Build America” government bonds that could help spur private investment, as well as “a massive expansion of the Low Income Housing Tax Credit”. (Ways & Means news release, June 18) 
  • Rep. Sam Graves (R-Mo.), T&I’s Ranking Member, last week announced an alternative bill for surface transportation programs and on June 23 stated, “Now the bill has been completely swallowed up … and turned into a colossal $1.5 trillion wish list for the Majority.”
  • The Trump administration is reportedly preparing a nearly $1 trillion infrastructure package proposal focused on transportation projects. (Reuters, June 15)
  • The critical need for infrastructure improvements was supported this week by a National League of Cities survey, which showed that coronavirus-related expenses have forced more than 700 U.S. cities to suspend or terminate plans to upgrade critical infrastructure.  (Washington Post, June 23)

“The survey found that 65% of cities are being forced to delay or completely cancel capital expenditures and infrastructure projects, which will not only stifle job growth and slow local economic activity, but further jeopardize economic recovery efforts in communities across the nation,” said Clarence Anthony, CEO and Executive Director, National League of Cities. “Without congressional action now, the forced delay or cancellation of infrastructure projects will create an economic ripple effect throughout the nation not felt in decades.” (National League of Cities, June 23)

#  #  #

2020 Annual Report – Leading Through Crisis

Posted on by Trey Jackson

 

View Full Report – 2020 Annual Report – Leading Through Crisis

Intro

COVID-19 RER Response Timeline

Tax

Capital and Credit

Infrastructure and Housing

Energy and Climate

Homeland Security

Roundtable Discussion with North America’s Building Trades Unions President Sean McGarvey on COVID-19, Racial Inequality, Workforce Training and Infrastructure

Posted on by Trey Jackson

Sean McGarvey, above, President of North America’s Building Trades Unions (NABTU) and Roundtable President Jeffrey DeBoer this week discussed compelling issues of importance to CRE and the Trades, including COVID-19 responses, infrastructure investment, racial inequality,  workforce development, infrastructure and capital investment.  (Watch the remote discussion on The Roundtable’s Youtube channel.)

  • NABTU is an alliance of 14 national and international unions in the building and construction industry that collectively represent over 3 million skilled craft professionals in the United States and Canada.
  • DeBoer and McGarvey’s discussed possible ways the two sectors could work constructively together on issues, including:
  • COVID-19.  McGarvey commented on how at the onset of the pandemic outbreak, a large amount of NABTU’s workforce was laid idle.  The unions urgently worked with DHS and state leaders on how the construction industry could remain in business by pursuing guidance with federal agencies such as the Centers for Disease Control and Prevention Centers (CDC).  NABTU’s extensive efforts in funding COVID-19 vaccine research and trials are also recounted. 
  • Nondiscriminatory work environments.  The discussion touched on NABTU’s June 1 statement issued in response to the nationwide protests over racial inequality.  In the remote discussion with DeBoer, McGarvey said, “At this point where people want to compare it to 1968 … its so much different now that I really thing we’re going to get somewhere this time. And the Building Trades when it comes to diversifying our membership … we even have a couple dozen formerly incarcerated programs where we are teaching curriculum inside the state prison system (until Covid came) to prepare people for when they get out to come into our training programs and go to work.”
  • Apprenticeships and training.  “There’s only one institution in the world that trains more people in hard skills than NABTU. That’s the United States military,” McGarvey noted.  The unions and their signatory contractor partners invest over $1.6 billion in private-sector money to fund and operate over 1,900 apprenticeship training and education facilities across North America that produce highly trained, craft workers.  Several Roundtable member companies participate in NABTU workforce programs.
  • Infrastructure. The effectiveness of public-private partnerships in large infrastructure investments was addressed by DeBoer and McGuire.  The two also discussed the difficulty of financing construction projects during the pandemic and how it affects the economic security of the entire industry.  The Roundtable is currently working with policymakers and stakeholders to develop and enact an effective pandemic risk/business continuity program that would add more confidence to the marketplace while a health solution is vigorously pursued on the medical front.
  • Capital investment strategies.  NABTU has interests in nearly $700 billion of capital investments and assets that include funds focused on pensions, commercial real estate development, infrastructure and other investment.   “We are about partnerships,” McGarvey noted. “We are partnered with public pension funds who see it like us … who want a minimum amount of standards of who they are going to lend to and who they are going to invest with.  So you take our nearly $700 billion … we are thinking that in about 3 years we’ll be up to about $3 trillion worth of pension fund money that’s going to have minimum requirements.”    

The remote discussion concluded on a positive note about exploring possible ways The Roundtable and NABTU could work together on mutually beneficial issues.

#  #  # 

SCOTUS Decision Protects “Dreamers” from Deportation For Now, and Sets the Stage for Election Year Controversy

Posted on by Trey Jackson
The Supreme Court
Facade of US Supreme court in Washington DC on sunny day

The Supreme Court of the United States (SCOTUS) handed down a highly-anticipated decision yesterday, ruling that Obama-era forbearance against deporting unauthorized immigrants brought by their parents to this country as children – the “Dreamers” – stands in place for the time being.  (SCOTUSblog analysis, June 18)

  • Chief Justice John Roberts wrote the 5-4 decision in Dep’t of Homeland Security vs. Regents of the Univ. of California. The Court’s majority decided that the Trump Administration’s 2017 efforts to thwart the Deferred Action for Childhood Arrivals (DACA) program, established in 2012, was a wrongful “arbitrary and capricious” action.
  • Approximately 700,000 immigrants have sought DACA protections. The program allows unauthorized foreign-born individuals who “only know this country as home” to apply for two-year forbearance on deportation, as well as work permits and eligibility for Social Security and Medicare.  A 2014 program extended similar protections to the Dreamers’ parents.”
  • The Trump Administration rescinded both programs in 2017. The high Court majority decided the rescission was illegal because, among other reasons, DHS purported to strike the entire policy – and did not consider whether the “deferred removal” elements of DACA could be retained while eliminating the “federal benefits” components.
  • Chief Justice Roberts also wrote that DHS’s rescission was arbitrary because the agency failed to consider the extent of the Dreamers’ reliance on the program, noting that DACA recipients have served in the military, enrolled in college, started businesses and careers, purchased homes, got married and had children, and paid taxes.  (Opinion at 24-25).
  • The Real Estate Roundtable last October joined an amicus brief in the case, led by the National Association of Home Builders, requesting that DACA remain in place. The brief explained the importance of the immigrant workforce to construction, hospitality, and building maintenance functions, stating that “DACA-eligible immigrants are a crucial component” of real estate jobs as 41% of them work in industries represented by the amici (Roundtable Weekly, October 18, 2019)
  • SCOTUS likewise noted the economic contributions of DACA beneficiaries: “[E]xcluding DACA recipients from the lawful labor force … [would] result in the loss of $215 billion in economic activity and an associated $60 billion in federal tax revenue over the next ten years.” (Opinion at 25)

Immigration groups heralded yesterday’s decision, but called for Congress to enact a permanent solution to protect DACA recipients. (The Hill, June 19) In what will surely become a contentious issue leading up to the November elections, President Trump tweeted today that his Administration will “be submitting enhanced paperwork shortly” to again try and rescind the program and eliminate protections afforded to the Dreamers. (USA Today, June 19)

 #  #  #

House Democrats, Republicans Propose Infrastructure Plans as Highway Trust Fund Faces Sept. 30 Expiration

Posted on by Trey Jackson

House Speaker Nancy Pelosi (D-CA) and several Democratic chairs are using a surface transportation bill as a base for a broader $1.5 trillion infrastructure plan they announced yesterday, to also invest in the nation’s housing, water, broadband, clean energy, and education systems.  (POLITICO, June 18 – see also Pelosi remarks and Youtube video, June 18).

  • Action on transportation infrastructure is considered a “must-do” item in Congress before the November elections because the nation’s main source to fund roads, bridges, and mass transit – the Highway Trust Fund – expires on September 30.  (New York Times, June 17)
  • The Democratic surface transportation piece – the INVEST in America Act – would authorize $494 billion in spending over five years. Key elements of this bill align with Roundtable policies, such as state/local cost share allocations that would help finance significant projects like the Northeast Corridor Gateway Program. (Roundtable Weekly, June 5 and Bill text | Factsheet | Bill Summary | Section-by-Section)
  • Meanwhile, the Ranking Member on the House Transportation and Infrastructure Committee, Sam Graves (R-MO), announced an alternative bill for surface transportation programs. The Republicans’ STARTER Act (section-by-section summary) would bolster permit streamlining and the “One Federal Decision” framework, measures long-supported by The Roundtable.  (Roundtable Weekly, August 2, 2019)  
  • Pelosi said yesterday that the comprehensive Democratic infrastructure package – the Moving Forward Act – would “make real the promise of building infrastructure in a green and resilient way,” and that “[i]t’s job-creating in its essence, but also commerce-promoting.”  (The Hill, June 18). A framework for the omnibus measure was released in January.  (Roundtable Weekly,  January 31)
  • The critical issue with any infrastructure proposal is how to pay for it. House Ways and Means (W&M) Committee Chairman Richard Neal (D-MA) yesterday outlined several tax provisions to be included in the Democratic leadership’s measure.
  • Neal stated, “We leaned on our tax code and will reinstate Build America Bonds, to not only provide financing to state and local governments but also spur investment in the private sector,” according to a W&M Committee press release. “There is a desperate need for modernizing low-income housing, and the Committee proposed a massive expansion of the Low Income Housing Tax Credit to get us there.” A W&M fact sheet outlines other provisions.  
  • The Senate is expected to focus on infrastructure in the coming weeks after the House acts. Last summer, the Senate Environment and Public Works Committee (EPW) unanimously approved a five-year, $287 billion surface transportation plan. (Roundtable Weekly, August 2, 2019).

The Trump Administration has long stated that infrastructure is one of its top priorities. It is reportedly preparing another $1 trillion plan that it may present to Congress next month.  (Bloomberg, June 16) Pelosi said yesterday she anticipates the Democratic Moving Forward Act will come to a House vote before Congress breaks for the July 4th recess and urged the Administration to begin negotiations about funding it.

#    #    #