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.

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.