Roundtable Leaders and National Policymakers Highlight Key Industry Issues
A wide range of policy issues were addressed by Roundtable leaders, Members of Congress and Administration officials during this week’s Roundtable Spring Meeting, including: infrastructure; housing availability and financing; tax proposals; building energy and climate related matters; and pandemic risk insurance. (For issue detail please see The Roundtable’s 2021 National Policy Agenda)
- Roundtable Chair Debra Cafaro (Chairman and CEO, Ventas, Inc.) launched the meeting on April 20 with Roundtable Chair-Elect John F. Fish (Chairman & CEO, SUFFOLK) and Roundtable President and CEO Jeffrey DeBoer.
- Chair Cafaro noted, “We convene at a time imbued with optimism and renewal, as we are fortunate to have an accelerated vaccine rollout, an improving economy and stabilizing markets.”
- She also acknowledged the vital, positive role that The Roundtable membership has played in addressing many of today’s national challenges, including rebuilding and expanding infrastructure; expanding housing opportunities; creating jobs and training workers for a changing economy. “Roundtable members have been at the forefront of advocating for these important policies since the onset of the COVID-19 pandemic,” Cafaro said.
- Roundtable Chair-Elect Fish stated, “Unintended consequences can occur when big national policy changes are proposed, so it is more important than ever that the real estate industry offer its expertise to help policymakers as they look to enact reform and propose new, important initiatives. The Roundtable is indeed engaged, and will remain so, in major policy issues impacting the industry.”
- Roundtable President and CEO DeBoer emphasized the need for ongoing interaction with policymakers in Washington as the policy agenda and congressional rosters change. He stated, “Our Roundtable policy advisory committees continue to remain active in keeping policymakers and regulators up to date on the evolving marketplace and our policy agenda. We always take a fact-based approach from the point of view of the asset, showing how it is sustainable, supports jobs for the community and contributes to overall economic growth,” DeBoer stated.
- The Roundtable’s Fall Business Meeting included virtual visits from the following guests:
- Senate Majority Leader Chuck Schumer (D-NY)
- Secretary of Transportation Pete Buttigieg, above
- Secretary of Commerce Gina Raimondo
- White House National Economic Council Director Brian Deese
- Senator Jacky Rosen (D-NV)
- Following the business meeting, members from the House and Senate attended several smaller breakout sessions with Roundtable attendees to discuss national policy issues in a more informal exchange of views.
Next on The Roundtable's meeting calendar is the all-member June 15-16 State of the Industry Meeting, which will be held virtually via Zoom.
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GOP Senators Outline Infrastructure Plan; Biden Announces U.S. Emissions Goal at Global Summit
Senate Republicans on April 22 unveiled a five-year, $568 billion infrastructure proposal as a counteroffer to President Joe Biden’s eight-year, $2.2 trillion plan. (Republican infrastructure framework and press conference)
Contrasting Infrastructure Plans
- The GOP plan, crafted by a group led by Senate Environment and Public Works Committee Ranking Member Shelley Moore Capito (R-WV), at podium in photo, adheres to a more narrow definition of infrastructure than the Democrats' proposal. (CQ and CNBC, April 22)
- The Republican proposal is focused on transportation, but also targets broadband and water projects. Details about how to fund the plan are vague, referencing unspecified user fees and spending unused money from prior COVID-19 relief bills. (Republican infrastructure framework and Politico Pro, April 22)
- Funding for Biden's multitrillion dollar “hard infrastructure” plan, by contrast, would rely on an increase in corporate taxes and further address electrical vehicles and “clean energy” assets. The Administration is expected to unveil its “American Families Plan” next week – an extensive framework supporting “human infrastructure” investments that would be paid for, at least partially, through tax increases on wealthy individuals. (Roundtable Weekly, April 2)
- Meanwhile, a group of 58 bipartisan lawmakers called the Problem Solvers Caucus on April 23 released a report that proposes several possible fee increases to pay for infrastructure spending. The caucus report includes options to impose a vehicle-miles traveled tax from electric vehicles – and proposes indexing gas and diesel taxes to inflation, highway construction costs, fuel-economy standards, or some combination. (Caucus report and Wall Street Journal, April 23)
- President Biden held a historic “virtual” climate summit yesterday and today with 40 world leaders to build global commitments to slash greenhouse gas emissions and ramp-up renewable energy development. (New York Times, April 22 and White House Fact Sheet, April 23)
- Biden committed the U.S. to cut its emissions in half by 2030 (relative to a 2005 baseline) – a pledge that would “dramatically reshap[e] key sectors of the economy.” (Wall Street Journal, April 23). The Biden Administration considers its climate commitments a “core part of [its] $2.2 trillion infrastructure plan,” essential to embrace new technologies, and necessary for the U.S. to out-compete China. (POLITICO, April 22)
- An open letter signed by 400+ businesses and investors support Biden’s 2030 target, calling it “ambitious and attainable.” The CEOs for Bank of America and Citibank appeared at the summit, as the financial sector faces increasing pressure to “play its biggest role yet in greening the global economy.” (Axios, April 22)
Energy Tax Bill
- Senate Finance Committee Chairman Ron Wyden (D-OR) on April 21 reintroduced legislation that would consolidate and refocus a range of existing energy tax incentives directed at buildings, clean electricity, transportation and conservation.
- The Clean Energy for America Act would provide performance-based tax incentives for energy efficient homes and commercial buildings – with the value of the tax incentives increasing as more energy is conserved. (Text of the legislation, one-page summary of the bill and a section-by-section summary.)
- Similar to the previous version of the legislation, the bill would also address Section 179D – the enhanced deduction for energy-efficient commercial buildings – by creating a sliding scale based on the percent of energy efficiency achieved above the most recent ASHRAE 90.1 standard.
- A business coalition led by The Roundtable supports the E-QUIP Act (H.R. 2346), which proposes “accelerated depreciation” for high-performance equipment installed in commercial and multifamily building. The coalition is urging policymakers to include this measure as part of any “green tax” package that may be folded into larger infrastructure spending legislation. (Roundtable Weekly, April 2)
The Senate Finance Committee will discuss energy tax policy and climate change at an April 27 hearing entitled "Climate Challenges: The Tax Code’s Role in Creating American Jobs, Achieving Energy Independence, and Providing Consumers with Affordable, Clean Energy."
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Roundtable-Backed Corporate Diversity Bill Passes House Committee
A bill supported by The Real Estate Roundtable that would require public companies to report on the diversity of their corporate boards and executive officers was approved Tuesday by voice vote in the House Financial Services Committee. (Committee mark-up, April 20)
- The Improving Corporate Governance Through Diversity Act (H.R. 1277) is sponsored in the House by Rep. Gregory Meeks (D-NY), left in photo, and in the Senate by Sen. Bob Menendez (D-NJ), right in photo. (Roundtable Weekly, Feb. 27)
- The bill would amend the 1934 Securities Exchange Act to require issuers of securities that must file annual reports to disclose in proxy statements:
- Data on the racial, ethnic, and gender composition of their executive officers, board of directors, and board nominees;
- Whether any director, board nominee, or executive officer is a veteran; and
- Plans or strategies to promote diversity at the board and executive levels.
- The Roundtable supports the Meeks-Menendez bill along with other groups including Nareit, NAIOP, International Council of Shopping Centers, Real Estate Executives Council (REEC), and the U.S. Chamber of Commerce. (Meeks news release, Feb. 23, 2021)
- The Roundtable joined other national organizations in a letter urging Financial Services Committee leaders to advance the legislation. The April 20 letter stated, “gender, racial, and ethnic diversity on corporate boards of directors … is important to institutional investors and other stakeholders, as well as to good corporate governance.”
- The full House is expected to vote in the coming weeks on the measure, which passed in the last session of Congress but stalled in the Senate (Roundtable Weekly, July 31, 2020). Now that the Senate is under Democratic control, the Meeks-Menendez bill has a higher likelihood of passing in both chambers.
- In related news, The Roundtable’s Equity, Diversity and Inclusion (ED&I) Committee is coordinating with the Real Estate Executive Council (REEC) on efforts to promote the hiring of more minority- and women-business enterprises (MWBEs) in real estate’s “supply chain” of vendors and contractors.
The Roundtable is a “Founding Diversity Partner” in a REEC national program to improve diversity, racial equality, and inclusivity across the commercial real estate industry. (Roundtable Weekly, Feb. 5)
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House Again Passes Cannabis Reform Legislation Providing a Safe Harbor to CRE Owners
A Roundtable-supported bill that would allow federally regulated banks to provide mortgage and financial services to state-licensed, cannabis-related businesses (“CRBs”) without the threat of federal penalties passed the House April 19 on a strong bipartisan vote.
The SAFE Banking Act
- The Secure and Fair Enforcement (SAFE) Banking Act [H.R. 1996 (117)] would provide commercial property owners a safe harbor if they lease space to a CRB, whose mortgages would not be subjected to corrective action by a bank.
- The SAFE Banking Act, which has been introduced in every Congress since 2013 by Rep. Ed Perlmutter (D-CO), passed the House multiple times in the last Congress – both as a stand-alone measure and as an addition to coronavirus relief legislation.
- Rep. Perlmutter commented on the passage this week, “After years of bringing up this issue, I feel optimistic about the path forward for the SAFE Banking Act and, more broadly, reforms to our federal cannabis laws.” (Perlmutter news release, April 19)
- The Real Estate Roundtable is a long-standing supporter of the SAFE Act. Roundtable President and CEO Jeffrey DeBoer noted in March 2019 letter to policymakers that the legislation, “… clarifies that banks could not take adverse action on a loan to a real estate owner solely because that owner leases property to a legitimate CRB. The measure also protects sellers and lessors of real estate and other CRB ‘service providers’ by clarifying that proceeds from legitimate marijuana-related transactions do not derive from unlawful activity, and thus do not provide a predicate for federal criminal money laundering.” (Perlmutter news release, March 18, 2021 and Roundtable letter, March 25, 2019)
- The legislation is supported by a wide variety of other organizations, including the National Association of State Treasurers and Governors from 21 states and territories. (Perlmutter news release, April 19)
- The Roundtable also advocates that Congress should provide fuller protections to real estate business through legislation that clarifies state-compliant cannabis transactions are not illegal federal “trafficking” – and do not produce unlawful proceeds under money laundering statutes.
Cannabis and CRE
- Forty-seven states and DC currently legalize marijuana to varying degrees. Yet use, possession, and sale remains illegal under federal law. (National Council of State Legislatures, April 5, 2021)
- The growing trend in cannabis decriminalization is having an increasing impact on the commercial real estate industry, according to recent member survey released this month by the National Association of Realtors (NAR publication Marijuana & Real Estate: A Budding Issue)
The estimated value of the U.S. cannabis industry is $17.7 billion, a substantial amount of which remains unbanked. As of January 2021, the legal cannabis industry supports 321,000 jobs across the country. (Perlmutter news release, April 19)
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