- White House Looks to Reset and Downsize Build Back Better Act; Roundtable Meeting to Address National Issues With Leading Policymakers
- White House Details Initial Implementation of $1.2 Trillion Federal Infrastructure Spending Package
- Blackstone Commits $1 Billion to Private Sector Affordable Housing Program
White House Looks to Reset and Downsize Build Back Better Act; Roundtable Meeting to Address National Issues With Leading Policymakers
President Joe Biden acknowledged in a Jan. 19 news conference that his nearly $2 trillion social and climate package, the Build Back Better (BBB) Act, needs to be pared down in the face of stalled negotiations in the 50-50 Senate. "I think we can break the package up, get as much as we can now, come back and fight for the rest later," Biden said, noting there are some areas of agreement with key Democratic Sens. Joe Manchin of West Virginia and Kyrsten Sinema of Arizona. (CQ and BGov, Jan. 20)
- Biden and congressional Democratic leaders may pursue one revamped legislative package – instead of several separate bills – as the November mid-term elections grow closer. Democrats have pushed the BBB Act under restrictive budget reconciliation rules, which allows consideration of one bill that could pass with a simple majority in the evenly divided Senate. (Wall Street Journal and CNBC, Jan. 19)
- Climate measures are emerging as a top priority for inclusion in a smaller bill. Manchin, chair of the Senate Energy and Natural Resources Committee, has signaled his support for that aspect of the BBB package. (CNN, Jan. 5 and New York Times, Jan. 20)
- White House National Economic Council Director Brian Deese yesterday said that certain BBB proposals, including clean energy measures are “doable” and could pass Congress. “The clean energy provisions in this bill will not only make it easier and cheaper to deploy clean energy and address the climate crisis, it will reduce energy costs,” Deese said. (BGov and Bloomberg, Jan. 20)
- If the Senate ultimately passes some revised version of the BBB Act that changes the House-approved version (H.R. 5376), the bill would need to go back to the House for another vote before it reaches President Biden’s desk. (Roundtable Weekly, Nov. 19, 2021)
Roundtable Support for Clean Energy Measures
- The Roundtable has supported the BBB Act’s climate measures, which include a suite of clean energy tax credits and incentives amounting to $300 billion. (Roundtable Weekly, Jan. 7)
- The Roundtable sent a letter to Congressional tax writers on Nov. 16, 2021 detailing five recommendations aimed at improving the green energy tax provisions affecting real estate. (Roundtable letter, Nov. 16)
BBB, ESG and More
- Next week, key policymakers will discuss what’s next for the BBB plan with Roundtable members during the organization’s Jan. 25-26 Virtual State of the Industry Meeting (SOI). The featured speakers will include:
- Sen. John Thune (R-SD), who holds the second highest position in Senate Republican leadership;
- Sen. Amy Klobuchar (D-MN), member, Joint Economic Committee and Senate Commerce Committee;
- Sen. Catherine Cortez Mastro (D-NV), member, Senate committees – Finance, Banking, and Energy;
- John Kerry, President Biden’s Special Envoy for Climate and former Secretary of State; and
- Larry Summers, former Secretary of the Treasury and former Director of the White House National Economic Council.
- Mr. Summers’ discussion will include the growing importance of environmental, social and corporate governance (ESG) issues for private sector businesses.
- One policy example of the growing influence of ESG factors is a proposed rule expected soon from the Securities and Exchange Commission (SEC) on new reporting disclosures quantifying financial risks related to climate. (Roundtable Weekly, Oct. 1, 2021 and Wall Street Journal, Jan. 19, 2022)
- BlackRock CEO Larry Fink, above, this week explained the need for businesses to make ESG an essential part of their decision-making process in his annual letter to CEOs. His letter states, “As stewards of our clients’ capital, we ask businesses to demonstrate how they’re going to deliver on their responsibility to shareholders, including through sound environmental, social, and governance practices and policies.” (New York Times and Washington Post, Jan. 18)
The Roundtable’s SOI Meeting will also address market conditions and feature detailed policy advisory committee presentations in the areas of sustainability, tax, homeland security and capital and credit.
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White House Details Initial Implementation of $1.2 Trillion Federal Infrastructure Spending Package
The disbursement of $1.2 trillion in federal infrastructure investment approved by Washington policymakers two months ago is moving forward – in careful coordination with federal agencies, state and local partners – according to recent announcements by President Biden and White House Infrastructure Implementation Coordinator Mitch Landrieu, above. (News conference transcript and video, Jan. 18)
Improving Infrastructure Assets
- The bipartisan infrastructure law enacted in November includes measures to improve infrastructure assets via public-private partnership efforts, streamline the federal permitting process, and improve key federal energy data that supports Environmental Protection Agency building labels. (Roundtable Weekly, Nov. 12, 2021 and White House Executive Order on Catalyzing Clean Energy Industries and Jobs Through Federal Sustainability, Dec. 8, 2021)
- Real Estate Roundtable Chair John Fish (Chairman and CEO, Suffolk) commended the bipartisan effort and called the legislative package “an historic opportunity to position our nation for sustainable growth and greater economic prosperity.” (Roundtable Statement, Nov. 8, 2021)
- Former New Orleans Mayor Mitch Landrieu now leads a task force of federal agency officials charged with implementing the infrastructure law through a combination of direct federal grants and competitive bidding. (White House Infrastructure Implementation Fact Sheet, Jan. 14)
- A White House fact released today lists 25 available or soon-to-be-available sources of funding that local governments – particularly cities – can compete or apply for directly.
- The White House also plans to release a comprehensive guidebook of all available funding from the bipartisan infrastructure law in the coming weeks.
- Landrieu on Jan. 4 sent a request to all the nation's governors, urging them to appoint their own infrastructure implementation coordinators to work on the smooth disbursement of funds over the next several years, in coordination with both federal agencies and state and local leaders.
- Landrieu noted during his Jan. 18 White House news conference that the $1.2 trillion disbursement involves 14 federal agencies. He also said federal talks are also underway with Amtrak and that “the Northeastern Corridor … needs immediate attention.” (News conference transcript and video)
Specific Programs Impacting CRE
President Biden on Jan. 14 discussed a variety of recently announced infrastructure projects and funding commitments with Infrastructure “Czar” Landrieu. (White House Remarks and Infrastructure Implementation Fact Sheet, Jan. 14 and Competitive Infrastructure Funding Opportunities for Local Governments Fact Sheet, Jan. 21).
- The following five programs are among the many agency-specific infrastructure projects enabled by the bipartisan infrastructure law that are positive for local communities and commercial real estate:
- The U.S. Department of Energy (DOE) launched the “Building a Better Grid” Initiative, which will catalyze the nationwide development of new and upgraded high-capacity electric transmission lines by deploying more than $20 billion in federal financing tools. (DOE news release, Jan. 12)
- The U.S. Department of Transportation (DOT) and Federal Highway Administration announced $27 billion in funding to replace, repair, and rehabilitate thousands of bridges across the country. (Wall Street Journal and ABC News, Jan. 14)
- DOT Secretary Pete Buttigieg and DOE Secretary Jennifer Granholm formed a Joint Office of Energy & Transportation focused on building a national network of 500,000 electric vehicle chargers. (Department of Energy news release, Dec. 14, 2021 and White House EV Charging Action Plan, Dec. 13, 2021)
- The Federal Aviation Administration (FAA) announced $3 billion for 3,075 airports across the country to upgrade critical infrastructure.
- The Environmental Protection Agency (EPA) announced a $1 billion investment to initiate cleanup and clear the backlog of 49 previously unfunded Superfund sites and accelerate cleanup at dozens of other sites across the country. (EPA news release, Dec. 20, 2021)
- Additionally, Labor Secretary Marty Walsh discussed in an interview today with The Hill how he is focused on implementing the infrastructure law and launching a new program called the Good Jobs Initiative. Walsh emphasized the need for "workers at all different levels of construction” and stated, “I think we’re going to need additional housing in our country in the next five to 10 years, we’re going to have lots more development going on in our country.” (The Hill, Jan. 21)
The various infrastructure improvement programs and their impact on the economy, commercial real estate and local communities will be a focus of discussion during The Roundtable’s Jan. 25-26 Virtual State of the Industry Meeting and its policy advisory committee meetings.
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Blackstone Commits $1 Billion to Private Sector Affordable Housing Program
Blackstone on Jan. 14 announced a $1 billion commitment to help address affordable housing challenges often faced by low-to-moderate-income families in historically under-represented communities. Blackstone’s single-family rental company Home Partners of America will expand their private sector program called Choice Lease, which offers qualified applicants below market rents and paths to homeownership without government subsidies. (Bloomberg, Jan. 14)
An Affordable Housing Solution
- Kathleen McCarthy, above, Global Co-Head of Blackstone Real Estate and Real Estate Roundtable Board Member, said, “The lack of housing supply is a national crisis. We are proud to support Home Partners’ mission of addressing housing access and affordability while also providing underserved populations with a new path to homeownership. Blackstone’s scale and long-term capital make a program like this possible.” (GlobeSt, Jan. 18)
- Home Partners intends to use the Blackstone funds for purchasing approximately 4,000 homes over the next two years that will benefit eligible individuals and families facing challenges to homeownership, including lower credit scores and lack of savings. (News release, Jan. 14)
- Bill Young, co-founder and CEO of Home Partners of America, said, "Our Choice Lease program is providing a critical service to many who would not otherwise be able to access the housing market. We are grateful that our partners at Blackstone have provided the support needed to implement this initiative. We have a unique opportunity to drive change that will help these groups access quality homes while providing a clear and transparent path to homeownership."
- Bloomberg reports that Home Partners buys a home on behalf of its Choice Lease client, and rents it back on a series of one-year leases. Blackstone confirmed that throughout the lease, the tenant has the option to purchase the house at any time.
- Choice Lease’s rental and purchase options, as well as free financial education and counseling programs, come as a housing shortage pushes rents and purchase prices higher throughout the United States. (National Mortgage Professional, Jan. 17)
- Choice Lease is intended for households who earn 80% or less of the area median income. The program also offers residents rental rates 10% lower than market rates – and caps a home’s eventual purchase price at a 3.5% annual increase. (Information on the Choice Lease Program and Chicago Agent Magazine, Jan. 17)
- Home Partners has implemented Choice Lease in four metropolitan areas, including Atlanta and Phoenix, and is expanding the program to thirteen other markets. (Bloomberg, Jan. 14)
The affordable housing shortage is one of the most important and complex political problems in America, and The Roundtable continues to work with our national real estate organization partners to jointly advocate for policies that will help to enhance the supply of safe, affordable housing.
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