As House and Senate Republicans work to develop the details of their tax legislation, the real estate industry is mounting a unified defense against possible limitations on the deductibility of state and local business property taxes. (BisNow, March 14)

Why It Matters

• Last week, The Real Estate Roundtable (RER) and sixteen other national real estate organizations wrote to members of the House Ways and Means and Senate Finance Committees urging them to oppose any proposal that would cap or eliminate the deductibility of state and local business property taxes.  (Roundtable Weekly, March 7)

• The House Ways and Means Committee is exploring reductions to business-related state and local tax deductions—including property taxes—as part of its effort to offset the costs of a broader GOP tax package. (PoliticoPro, March 11)

• At a White House meeting on Thursday between President Trump and Senate Finance Committee Republicans, Sen. Ron Johnson (R-WI) said Senators raised corporate SALT as a potential offset.  Several Senators reportedly “pitched Trump on repealing the corporate state and local tax deduction.”  (CQ, March 13; Politico, March 13)

• A cap on the deductibility of property taxes paid by U.S. businesses could have devastating consequences for commercial real estate owners, developers, and investors nationwide.

• State and local property taxes represent 40% of the operating costs of U.S. commercial real estate, a greater expense than utilities, maintenance, and insurance costs combined.

• The potential tax change could reverse the benefits of the 2017 Tax Cuts and Jobs Act (TCJA) and Section 199A, potentially raising effective tax rates on real estate to 1970s-era levels near 50%.

• With elevated interest rates, rising insurance premiums, and increased operational expenses pressuring property owners across asset classes, industry advocates argue that eliminating the deduction would only deepen existing challenges, resulting in “job losses, pressure on rents, stress on the banking system, and reduced housing construction.” (BisNow, March 14)

• RER urges members to amplify this message to their representatives in Congress. 

Tax Talks

• Both chambers had a busy week meeting with committee members and Trump administration officials to discuss the overall framework for their respective tax agendas.

• House Ways and Means Committee Republicans met with Treasury Secretary Scott Bessent on Monday to review tax options, while Senate Finance Committee members separately convened to discuss their approach, revealing significant differences in timeline and strategy. (PoliticoPro, March 10)

• Ways and Means Committee Chairman Jason Smith (R-MO) has already said that the instructions laid out in the House-approved budget resolution won’t allow for a permanent extension of Trump’s tax cuts, but would allow for an eight- to nine-year extension. (Politico, March 10)

• GOP lawmakers from high-tax states, including New York, New Jersey, and California, continue to demand that any final tax legislation include lifting or fully repealing the $10,000 SALT cap for individual taxpayers. President Trump has expressed support for repealing the SALT limitation.

• House and Senate Republicans have yet to reach an agreement on a budget plan that would set the framework for Trump’s legislative agenda.

• During the White House meeting with Senate Finance Republicans, Trump raised his Gold Visa card concept as a way to pay for the package, along with tariffs and other options.  (PoliticoPro, March 13)

Looking Ahead

• House Republicans aim to pass legislation extending Trump-era tax cuts by Memorial Day, while Senate Republicans suggest an August timeframe might be more realistic, with Sen. John Cornyn (R-Texas) noting "there's no consensus" in the Senate. (Politico, March 10)

RER will remain actively engaged with lawmakers, reinforcing the message that preserving full deductibility of business property taxes is essential to protecting jobs, promoting investment, housing affordability, and ensuring continued economic stability nationwide.

Contentious policy discussions surrounding the economy, immigration and government spending continued this week in Washington as lawmakers work towards an agreement on a federal spending bill.

State of Play

• The House narrowly approved a continuing resolution (CR), on March 11 to keep the government funded through September. Speaker of the House Mike Johnson (R-LA) managed to largely keep his GOP conference united, passing the measure days ahead of a possible government shutdown. (CBS News, March 11)
  

• To prevent a shutdown, the Senate must approve a measure before the current funding expires on Friday night. Republicans will require support from at least seven Democrats to reach the 60-vote threshold necessary to overcome a filibuster. (Financial Times, March 12)
  

• Senate Minority Leader Chuck Schumer (D-NY), told his caucus privately on  Thursday, and later in a floor speech, that he would vote to advance a GOP-written stopgap to fund the government through September. While he described the Republican spending bill as "very bad," he emphasized that the "consequences of a shutdown for America would be far worse." (Politico, March 13)
  

National Flood Insurance Program (NFIP)

• Included in the CR package, is the extension of The National Flood Insurance Program (NFIP).
  

• If enacted, this will be Congress’s 32^nd  short-term extensions of the NFIP. The Roundtable has been a long-standing supporter of a long-term reauthorization of the NFIP with appropriate reforms.
  

• A long-term reform and reauthorization of the NFIP is essential for residential markets, overall natural catastrophe insurance market capacity, and the broader economy.
  
  
• RER, along with its industry partners, will continue advocating for targeted policy solutions that can help alleviate increased insurance costs for housing providers nationwide. (Roundtable Weekly, Feb. 28)
  

Inflation Reduction Act

• As Congressional Republicans look to offset trillions of dollars in proposed tax cuts in their budget bill, Biden-era provisions from the Inflation Reduction Act (IRA) have sparked debate. (Politico, March 10; Brookings, Jan. 6)
  

• This week, a group of 21 House Republicans led by Rep. Andrew Garabino (R-NY), whose districts have benefited from billions in new investments due to IRA incentives, argued that energy tax credits and provisions for manufacturers and builders are essential in achieving President Trump's goal for the U.S. to be "energy dominant". (Politico, March 10)
  

• In a letter to President Trump, the group asserted that eliminating certain credits could mean "drastically higher power bills for American families" and emphasized that "many credits were enacted over the course of a 10-year period, which allowed energy developers to plan with these tax incentives in mind." (Reuters, March 11)
  
  

Immigration – Gold Card Proposal

• On March 11, RER sent a letter to Commerce Secretary Howard Lutnick, expressing support for the "Gold Card" proposal. This concept aims to bolster U.S. economic growth, address the national deficit, and strengthen America's competitive edge in the global marketplace.
  

• The letter reiterated support for the existing EB-5 program, which allows foreign investors to obtain a green card by making substantial investments that result in jobs for American workers and funding for large-scale developments.
  

• As RER’s letter emphasized, pairing the "Gold Card" program with the EB-5 framework offers a powerful, dual-track approach that will reform America’s visa system, attract top global talent, and drive foreign investment into strategic, job-creating projects. (Letter, March 11)
  
  
• During a meeting with GOP Senators this week, President Trump discussed his “Gold Card” Program as a revenue source to address the national deficit.
  
  

Federal Workforce Cuts and GSA Leasing

• Federal agencies faced a Thursday deadline to submit initial plans for sweeping workforce cuts and reorganizations, following President Trump's directive for "large-scale reductions in force," with a second round of plans due in April. (Politico, March 12)
  

• The "Phase 1" agency cut plans due this week mark the first step in the Trump administration's broader downsizing strategy, with "Phase 2" plans—detailing operational overhauls—due by April 14 and set for implementation by Sept. 30. (Politico, March 12)
  

• A federal judge ordered the administration to rehire thousands of employees dismissed from six agencies, disputing the Trump administration’s justification for firing the probationary workers. (NYT, March 13)
  
  
• RER will continue to track these developments and their potential implications for government leasing in Washington, D.C. and other major urban centers. (Roundtable Weekly, Feb. 7)
  
  

Both chambers are in recess next week and set to return to Washington on March 24.

As the nation continues to grapple with housing affordability challenges, recent developments in Washington signal increased attention on this critical issue. From new leadership at federal housing agencies to congressional hearings focused on supply constraints, policymakers are exploring multiple avenues to address the ongoing crisis.

Congressional Focus on Housing Supply Constraints

• This week, the Senate Banking, Housing and Urban Affairs Committee held a hearing titled "Housing Roadblocks: Paving a New Way to Address Affordability," which explored various factors limiting housing supply and driving up costs. (Watch Hearing)
  

• In his opening remarks, Chairman Tim Scott (R-SC) highlighted The Roundtable-backed, ROAD to Housing Act (S. 5027 | H.R. 990), his comprehensive legislation aimed at making housing more affordable and widely available. (Sen. Scott Press Release, March 12 | Roundtable Weekly, Dec. 2024)
  

• Discussions during the hearing were centered on the challenges of restrictive zoning laws, delayed permitting, land use policies, and escalating material costs.
  
  
• Last week, the House Financial Services Subcommittee on Housing and Insurance held a hearing on “Building Our Future: Increasing Housing Supply in America” which focused on strategies to address the housing shortage. (Committee Memo, March 4)
  
  
• Both Republicans and Democrats on the subcommittee agreed that restrictive zoning laws, high construction costs, and regulatory barriers at the state, local, and federal levels are exacerbating the housing crisis. (CREFC, March 11)
  
  
• Throughout both hearings, solutions for addressing these challenges echoed RER’s housing policy recommendations of simplifying permitting and zoning processes, promoting modular housing construction, strengthening public-private partnerships, and expanding housing incentives such as the low-income housing tax credit (LIHTC).
  

Pulte Confirmed as FHFA Director

• On Thursday, the Senate confirmed Bill Pulte as the new director of the Federal Housing Finance Agency (FHFA) in a 56-43 vote, marking one of the few Trump cabinet nominations to receive some bipartisan support. (Politico, March 13)
  

• RER wrote to Senate leadership this week in support of Pulte as director of FHFA. “His knowledge and experience will prove to be critical in overseeing the Government Sponsored Enterprises—Fannie Mae and Freddie Mac, the key financing sources for America’s housing industry—as well as the 11 federal home loan banks, who play a critical role in investing in local needs including housing, jobs and economic growth,” the letter stated.
  

• Speaking with CNN, Pulte said that privatizing the government-sponsored enterprises (GSEs) is not the Trump administration's immediate priority. Instead, he stressed the need for a "significant study" on the potential impact on mortgage rates before any such move. (GlobeSt. March 14)
  
  
• "Fannie and Freddie shouldn’t be in conservatorship forever. But it’s critical to ensure any discussion about exiting conservatorship needs not only to ensure safety and soundness but how it would affect mortgage rates." (CNN, March 13)
  

Opportunity Zones Study

• A new working paper from Economic Innovation Group provides the first quantitative evidence that Opportunity Zones (OZs) have significantly increased housing supply in designated communities. (Economic Innovation Group, March 11)
  

• The study found that the OZ incentive has nearly doubled the number of new housing units in these areas, generating more than 313,000 new residential addresses between 2019 and 2024.
  

• The authors also found that this new housing came at a low fiscal cost per unit, suggesting that OZs are proving to be one of the most effective tools in the federal housing policy toolkit.
  
  
• RER has long championed (OZs) as a transformative tool to stimulate economic growth and increase the supply of affordable housing in low-income areas. By creating tax incentives for investments in designated low-income census tracts, OZs have channeled investment into areas most in need.
  
  
• RER has called on Congress to improve and extend the program, which is set to expire along with other key provisions of the TCJA at the end of this year.
  

Sustained recovery and resolution of the affordability crisis will require continued policy reform, increased housing supply, and greater collaboration between the public and private sectors. RER remains committed to working with policymakers to implement solutions that address both immediate needs and long-term challenges in the housing market.