With the One Big Beautiful Bill Act (OBBBA) now enacted, attention in Washington has turned to appropriations for fiscal year 2026. Programs important to real estate—like HUD’s rental assistance program, and EPA’s ENERGY STAR program—are navigating the annual federal spending process, as Congress must pass legislation by September 30 to avoid a government shutdown.  (Roll Call, July 18)

HUD Programs

• The House Appropriations Committee passed a bill on Tuesday to fund HUD in FY’26. (Bill text | Summary). The measure will next proceed to the full House of Representatives for a vote. (Press Release, July 17)

• Under the bill, HUD would get about $67.8 billion in discretionary funds, a $939 million decrease compared to FY 2025.

• Section 8 project-based rental assistance would receive a $237 million increase over FY 2025 levels, totaling $17.127 billion. According to the committee, the funding would support full renewal of contracts for roughly 1.2 million households.

• This stands in stark contrast to President Trump’s FY 2026 “skinny budget” released in May, which proposed a $26.7 billion (43%) reduction to Section 8. (Bipartisan Policy Center, June 11)

• Despite the funding gains for rental assistance, the bill includes a 26% cut to HUD staffing—raising concerns about the agency’s capacity to manage and deliver programs efficiently. (PoliticoPro, July 9)

EPA Programs

• A separate House appropriations subcommittee also passed a bill on Tuesday to fund EPA for FY’26. (Bill text | Summary). The bill proposes no specific cuts to ENERGY STAR. The program receives strong support from RER in partnership with a broad coalition of national real estate, manufacturing, retail, and technology industry groups. (Roundtable Weekly, June 6).

• The measure proposes $2.27 billion for EPA’s environmental programs in FY’26, representing a 29% cut compared to current fiscal year funding. (Summary)

Supreme Court Ruling Upholds Agency Reorganizations

• Ultimate FY’26 spending levels will be impacted by agencies’ internal plans to reorganize and eliminate programs. An 8-1 decision by the U.S. Supreme Court last week allows the Trump administration to move forward with large-scale staff reductions and structural overhauls across 19 federal departments. (Reuters, July 9)

• The high Court’s ruling states that any specific reorganization effort could be deemed illegal, while confirming the President’s general authority to direct agencies to develop “RIF and Reorganization Plans” by September 30 in accord with a “DOGE” Executive Order and White House memo both issued in February.

• Moving forward with EPA’s planned restructuring, Administrator Lee Zeldin on Thursday announced further reorganization by consolidating finance and administrative offices, changing enforcement and Superfund offices, and continued workforce reductions through early retirements and layoffs. (PoliticoPro, July 17)

• Reports thus far of Zeldin’s plans do not identify any planned cuts to ENERGY STAR or the larger division in which it is housed at the agency.

• Advocacy by RER and coalition partners to the administration and Congress explains that ENERGY STAR’s continued success as a non-regulatory, public-private partnership depends on sufficient staff and budget resources to implement the program.

What’s Next

• Rescissions: Congress may consider further efforts to rescind unspent prior-year funding, similar to the bill passed this week and now heading to the President’s desk clawing-back $9 billion in previous funds for foreign aid and public media. (POLITICO, July 18). 

• More Tax Legislation?: According to the House speaker’s top tax aide, Congress may pursue a bipartisan tax package, additional retirement policy changes, and a follow-up reconciliation bill informally dubbed “2 Big 2 Beautiful.” (Tax Notes, July 17)

• Section 899: Republican tax leaders Rep. Jason Smith (R-MO) and Sen. Mike Crapo (R-ID) have signaled they may reintroduce the Section 899 retaliatory tax if negotiations to exempt U.S. companies from OECD Pillar 2 taxes fail, potentially in a second reconciliation bill (Tax Notes, July 17). However, Germany’s Finance Minister Lars Klingbeil reaffirmed his country's commitment to implementing Pillar 2 of the global minimum tax, despite widespread uncertainty following recent U.S. tariff announcements and the G7 carveout exempting American companies. (PoliticoPro, July 18)

• FY’26 Appropriations: Senate Majority Leader John Thune has not yet decided whether to bring a government funding bill to the floor next week but aims to pass at least one funding package before the Senate’s August recess. (PoliticoPro, July 17) If congress does not pass FY’26 spending legislation by September 30, it could default to a stop gap “continuing resolution” and extend FY’25 levels to keep the government running.

• Agency Restructurings: Reorganizations plans prompted by DOGE efforts will continue to be unveiled before and after Labor Day.

RER will continue to monitor all developments on matters of tax, appropriations, and federal agency reorganizations relevant to real estate.

The Real Estate Roundtable (RER) and a coalition of national trade associations submitted a joint letter on July 14 to Treasury Secretary Scott Bessent, urging the Financial Stability Oversight Council (FSOC) to rescind its 2023 interpretive guidance and reinstate the Council’s 2019 framework for designating nonbank financial companies.

Coalition Letter

• The 2023 guidance significantly alters FSOC’s designation process, removing procedural safeguards such as cost-benefit analysis and coordination with a company’s primary regulator. (Letter, July 14)

• The letter warns that FSOC’s shift away from an activities-based approach creates regulatory uncertainty that could chill capital formation, disrupt access to credit, and hinder innovation in risk management. (Pensions & Investments, July 14)

• The letter signed by RER, the U.S. Chamber of Commerce, Mortgage Bankers Association, American Investment Council, and others, calls on FSOC to withdraw the 2023 guidance, refocus on systemic activities rather than specific firms, and restore due process protections.

Congressional Hearing

• During a July 16 House Financial Services Committee hearing: “Dodd-Frank Turns 15: Lessons Learned and the Road Ahead,” members debated the law’s enduring legacy and the potential overreach of FSOC. (Press Release, July 15)

• Lawmakers expressed concern that the 2023 guidance could revive pre-Dodd-Frank regulatory “blind spots” by enabling opaque designations that sidestep traditional supervisory processes. (PoliticoPro, July 16)

• Committee Vice Chair Rep. Bill Huizenga (R-MI), also raised concerns, and introduced the prospect of curbing FSOC’s authority (American Banker, July 15)

• At the hearing, lawmakers critically examined the expansive regulatory bureaucracy created by the law and its structural impact on CRE lending. Federal Reserve and FDIC data show that small and midsize banks (assets under $250B) now account for a majority of all CRE lending, particularly construction and land development loans. Exempted from some of Dodd-Frank’s most burdensome provisions, smaller lenders are stepping in to fill the gap left by larger banks scaling back amid accelerating debt maturities. (GlobeSt. July 16)

• Some members also highlighted the need to restore bipartisan consensus around the Council’s systemic risk role, especially as market complexity grows.

The Fed

• The Fed’s independence was also in the spotlight this week as President Trump floated—but ultimately backed off removing Fed Chair Jerome Powell, citing frustration over interest rate policy and the central bank’s headquarters renovation. (PoliticoPro, July 17)

• Tensions over the Fed’s future rattled markets, with bond yields spiking and CRE leaders cautioning against politicizing monetary policy. (GlobeSt., July 17 | Axios, July 17)

• JPMorgan Chase CEO Jamie Dimon warned that “playing around with the Fed” could carry serious consequences for U.S. financial credibility. (WSJ, July 15)

The Fed’s next policy meeting is scheduled for July 29–30. Policymakers are expected to keep interest rates steady at 4.25% to 4.5%—marking the fifth consecutive meeting without a change since the central bank paused rate cuts in December. (Reuters, July 17 | Axios, July 18)

Bipartisan lawmakers this week discussed reforms aimed at reducing barriers to housing development and increasing supply during a congressional hearing on the nation’s housing shortage.

Key Takeaways

• The House Financial Services Subcommittee on Housing and Insurance’s hearing, titled “HOME 2.0: Modern Solutions to the Housing Shortage,” highlighted the crucial need to expand the supply of affordable housing. (Committee Memo)
  
  
• “This is a basic supply and demand issue,” said Rep. Mike Lawler (R-NY). “We are seven and a half million units underbuilt nationwide. We need to build more housing. Period.”
  
  
• Modernizing the HOME Investment Partnership (HOME) Program, administered by the U.S. Department of Housing and Urban Development (HUD), was also a prominent focus of the hearing. HOME is a flexible and effective federal tool that empowers states and localities to build, buy, and rehabilitate affordable housing.
  
  
• Subcommittee Chairman Mike Flood (R-NE) cited four major cost drivers—lengthy environmental reviews, "Build America, Buy America" rules, Davis-Bacon wages, and Section 3 mandates—as the “four horsemen of the housing apocalypse” hindering the HOME Program.

• Ranking Member Emanuel Cleaver (D-MO) similarly called for modernizing the HOME Program, highlighting the inefficiencies created by the “massive number of rules” placed on developers building safe, decent, and affordable housing.
  
  
• Eric Oberdorfer, Director of Policy and Legislative Affairs at the National Association of Housing and Redevelopment Officials (NAHRO), also noted the importance of the low-income housing tax credit (LIHTC), which is often used in conjunction with the HOME program to finance affordable housing.

RER Advocacy

• The Real Estate Roundtable (RER) has consistently emphasized that America’s affordability crisis is driven by chronically low housing production. Tackling this shortfall requires a national transformation in housing policy that makes it easier to build housing of all types.
  
  
• Changes made by the One Big Beautiful Bill (OBBB) Act signed this month, including expansions to the LIHTC, are projected to support the development of up to 1.2 million affordable rental units over the next decade. (Roundtable Weekly, July 11)
  
  
• RER strongly supports key reforms discussed at this week’s hearing, including easing Davis-Bacon prevailing wage requirements, which place inordinately high costs on construction projects and inhibit access to federal loan and other housing construction incentives, and the HOME Program (Roundtable Weekly, April 2024, May 2023).

• In May, RER joined a coalition of 15 national real estate organizations urging the Labor Department to repeal and revise its 2023 Davis-Bacon rule, citing outdated wage classifications that inflate project costs by up to 20% and discourage participation in federally funded housing. (Roundtable Weekly, May 23)

• Other RER-backed proposals, such as the bipartisan Revitalizing Downtowns and Main Streets Act of 2025 (H.R. 2410) and Housing Affordability Act (S.1527), would go a long way toward expanding supplies of affordable housing. (Roundtable Weekly, May 23)

RER will continue to champion policies to bolster the availability of safe and affordable housing. See our fact sheet on the topic for more information.