Policy Landscape

Senate Raises Debt Ceiling; Democrats Face Tight Deadline to Pass Build Back Better Act by Christmas

DC monuments night

The Senate approved a procedural bill last night to raise the national debt ceiling without the risk of a Republican filibuster. The House and Senate plan to consider a subsequent bill within days that will increase the debt limit by more than $30 trillion, thereby avoiding a national default and delaying the next fiscal cliff until after the November midterm elections. (Wall Street Journal | Punchbowl News | Reuters, Dec. 9)

Hurdles Await BBB Act 

  • The expected increase to the debt limit will also allow Senate Democrats to focus on the House-passed $1.7 trillion Build Back Better (BBB) Act.

  • Senate Majority Leader Chuck Schumer (D-NY) and House Speaker Nancy Pelosi (D-CA) this week predicted that Congress will pass the social and climate package before Christmas. However, numerous hurdles could push congressional action on the BBB Act into 2022. (The Hill, Dec. 8)

  • Today, the Congressional Budget Office reported that the BBB Act would add $3 trillion to the federal deficit over the next 10 years if its major provisions are made permanent.

  • Senate Energy Committee Chairman Joe Manchin (D-WV), below, is one of the key Democratic centrist swing votes needed to pass the BBB Act under budget reconciliation rules, which allow Congress to pass legislation with only 51 votes in the Senate.

    Senator Joe Manchin (D-WV)
  •  Manchin reiterated his reluctance to vote for the package this week, stating "the unknown" of inflation "is much greater than the need" for Democrats to move on their climate and social spending bill now. (Marketwatch, Dec. 8 and Wall Street Journal, Dec. 7)

  • Additionally, the Senate parliamentarian is reviewing the BBB Act to determine if it conforms to reconciliation rules, which require that all the bill’s provisions directly impact the federal budget. (Indivisible, The Senate’s Byrd Rule)

  • Another significant hurdle is whether potential changes to the BBB bill can resolve existing policy differences among Democrats on the state and local tax deduction (SALT), Medicare expansion and immigration. (CQ and BGov, Dec. 9)

  • If the Senate passes a bill with changes, it likely will need to go back to the House for another vote before it reaches President Biden’s desk. (Roundtable Weekly, Nov. 19) 

BBB and CRE 

Chicago building glass reflection

  • The current BBB bill – when compared to the President’s budget and the bill passed by the House Ways and Means Committee in September – reflects major progress on a number of tax issues important to real estate and prioritized by The Real Estate Roundtable. (Roundtable Weekly, Oct. 29)

  • The current bill would not limit like-kind exchanges, increase the 20% capital gains tax, or cap eligibility for the 20% pass-through business income deduction. It also does not include changes in the tax treatment of carried interest or repeal the step-up in basis of assets at death. The key tax issues in the bill are addressed in a Roundtable comparison of the tax-related provisions in the BBB package.

  • Clean energy tax credits make up the most significant portion of the BBB Act’s climate policies. The Roundtable on Nov. 16 sent a letter to congressional tax writers detailing five recommendations that would improve green energy tax provisions in the BBB Act affecting real estate. (Roundtable Weekly, Nov. 19) 

The BBB Act’s potential impacts on tax and climate policy issues of importance to CRE will be topics for discussion at The Roundtable’s Jan. 25-26 State of the Industry Meeting in Washington, DC.  

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Capital and Credit

House Passes Legislation to Transition Away From LIBOR With Solution for “Tough Legacy” Contracts

Libor transition to SOFR image

Legislation passed by the House of Representatives on Dec. 8 would protect trillions in “tough legacy” contracts that use the London Interbank Offered Rate (LIBOR) as a reference rate for financial transactions. The Real Estate Roundtable and a broad coalition of industry groups have long-supported this protective measure. (Industry Coalition letter, Dec. 7 and Bloomberg, Dec. 8)


  • House lawmakers approved the Adjustable Interest Rate (LIBOR) Act (H.R. 4616) by a vote of 415-9, sending the bill to the Senate as the use of LIBOR faces retirement in 2023. Banks will not be able to issue new loans or other financial contracts using LIBOR as of Jan. 1, 2022. (Wall Street Journal, Dec. 3)

  • LIBOR is currently used in outstanding financial contracts – including commercial real estate debt, mortgages, student loans and derivatives – worth an estimated $223 trillion. (Roundtable Weekly, July 30)

 Tough Legacy Issues Addressed

  • The House bill includes provisions that address the transition of the most troublesome LIBOR-based contracts – referred to as “tough legacy” – to a replacement benchmark when LIBOR sunsets. These contracts have insufficient fallback language or include provisions that cannot be amended.

  • The bill also provides a safe harbor for market participants switching existing LIBOR-referencing financial contracts to a replacement benchmark for debt instruments, such as the Secured Overnight Financing Rate (SOFR).  The bill also includes a federal preemption.

  • The Real Estate Roundtable and 17 national trade groups also previously submitted letters April 14 and July 27 to House Financial Services Committee policymakers in support of legislation to address “tough legacy” contracts during the transition away from LIBOR. 

The House bill provides that when LIBOR reaches its final replacement date (June 30, 2023), all contracts with no adequate fallback provisions for an alternative benchmark substitute will be replaced with SOFR. 

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Beneficial Ownership

Biden Administration’s Proposal to Combat Money Laundering May Require New Real Estate Reporting Requirements

FinCEN logo

The Biden Administration on Dec. 6 announced it is seeking public comment about a proposed anti-money laundering rule that may result in increased reporting requirements about certain commercial real estate transactions. (Bloomberg, Dec. 6 and GlobeSt, Dec. 7)

Impact on Real Estate 

  • The Treasury Department’s Financial Crimes Enforcement Network (FinCEN) issued its Advance Notice of Proposed Rulemaking (ANPRM) this week to seek input on how to craft the new rule. “Broadly speaking, FinCEN has serious concerns with the money laundering risks associated with the commercial real estate sector,” according to the ANPRM. (FINCEN Fact Sheet: Beneficial Ownership Information Reporting, Dec. 7)

  • Two senior administration officials discussed the proposed rulemaking and its potential impact on the real estate industry during a media call on Dec. 6. One official stated, “We’re very focused on asking a number of questions around ways that any approach that we take towards this additional regulation can be used to minimize the regulatory burdens on the real estate sector.” (White House Background Press Call, Dec. 6)

  • The FINCEN initiative is part of a government-wide effort announced by the White House on Monday called the United States Strategy on Countering Corruption. (Washington Post, Dec. 7) 

FINCEN Concerns 

Anti Money-Laundering visual

  • Real estate transactions involving bank loans or other financing are less susceptible to money laundering because regulated financial institutions are required to report suspicious activity to FinCEN. When real estate is purchased with all cash, it can be nearly impossible to trace the beneficial owners behind shell companies often used in the transaction.

  • Currently, title insurance companies are required to report to FINCEN the identities of persons behind shell companies used in all-cash purchases of residential real estate costing over $300,000 that are located in one of a dozen metropolitan areas. (Bloomberg, Dec. 6)

  • Biden administration officials this week said the new rule could expand that reporting requirement beyond existing geographic areas to cover the entire U.S. – and potentially apply a new regulation to commercial real estate. (White House Background Press Call, Dec. 6). 

CRE Industry Response 

  • The Real Estate Roundtable and three other national real estate organizations on May 5, 2021 submitted detailed comments to FINCEN on several implementation concerns related to a proposed federal registry with beneficial ownership information. (Roundtable Weekly, Dec. 9)

The new ANPRM is open for comment until February 7, 2022. A response to FINCEN will be one of the topics discussed on Jan. 25 during The Roundtable's Real Estate Capital Policy Advisory Committee (RECPAC) meeting in Washington, DC. 

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Homeland Security

Real Estate Preparedness Exercise on Adverse Weather and Hostile Events Scheduled for Jan. 20, 2022

REISAC logo x475

The Real Estate Roundtable’s Homeland Security Task Force and the Real Estate Information Sharing and Analysis Center (RE-ISAC) invite member organizations to participate in a Virtual Preparedness Exercise on Jan. 20, 2022.

  • One exercise will address winter weather preparedness to examine critical dependencies related to water, power and communications/IT. Another exercise will focus on hostile events in local areas that do not directly target a member’s facility.  One recent example of such an event involved an armed suspect incident in Boston that shut down activity in a four-block radius during a seven-hour standoff.

  • Government officials and other industry ISACs will also participate in the Jan. 20 event, scheduled for 2:00-3:30 pm ET.  Please RSVP no later than January 14 to Liz Hoopes and indicate if you prefer to participate in a weather preparedness or hostile events group.

  • Additionally, HSTF has recently worked with government officials to produce a one-page reference on “flash mob” retail theft to assist businesses in recognizing potential preparatory actions for future criminal activity.

For more information, please contact Roundtable Senior Vice President Chip Rodgers.

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Roundtable In The News

Roundtable President and CEO Jeffrey DeBoer Recognized as One of the “Top Lobbyists” in Washington, DC

Jeffrey DeBoer Real Estate Roundtable

Real Estate Roundtable President and CEO Jeffrey DeBoer, above, was recognized this month as one of the Top Lobbyists in Washington, DC by the influential policy news publication The Hill.

  • A variety of industry representatives were acknowledged in the annual list as “the people who wielded their clout and knowledge most effectively on behalf of their clients.”

  • The publication also noted, “The ranks of policy experts and influencers run deep in Washington, but these are the players who stand out for delivering results for their clients in the halls of Congress and the administration.”

  • The Roundtable’s DeBoer commented, “My inclusion on The Hill’s annual list reflects the effectiveness of our entire organization. I am proud to work with the industry’s best – its leaders represented on our board of directors, our national real estate organization partners and The Roundtable’s highly-effective advocacy staff,” DeBoer added.

The Roundtable’s next meeting on January 25-26 in Washington, DC will address its 2021 policy agenda during business and policy advisory committee meetings.

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