Author: abigail_grenadier

The Department of Labor Proposes 401(k) Alternative Investment Rule

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The Department of Labor (DOL) proposed a new rule this week that would make it easier for 401(k) plans to offer investment options with exposure to alternative assets, including private equity, real estate, digital assets, and other nontraditional products—if fiduciaries follow a prudent, process-based framework. The proposal stems from President Trump’s Aug. 7, 2025 Executive Order directing regulators to expand access to alternative assets in defined contribution retirement plans. (DOL News Release, March 30)

Proposed Rule

  • The proposed rule would clarify fiduciary duties under the Employee Retirement Income Security Act (ERISA) and establish a safe harbor for selecting designated investment alternatives, including asset allocation funds that contain alternative assets. (PoliticoPro, March 30)
  • DOL says the rule is intended to reduce regulatory uncertainty and litigation risk that have discouraged plan sponsors from offering broader exposure to private markets and other alternatives in 401(k) plans, even though such investments are not expressly prohibited today.
  • Under the proposal, fiduciaries would need to evaluate factors such as performance, fees, liquidity, valuation, benchmarks, and complexity through an objective and analytical process. (DOL News Release, March 30)

Background

  • While alternative investments have long played a role in defined-benefit plans such as pensions, fiduciary obligations and litigation concerns have made it more difficult to include them in participant-directed defined contribution plans like 401(k)s.
  • Since the Executive Order, regulators and administration officials have signaled growing support for expanding access to alternative investments—including real estate—while emphasizing the need for appropriate guardrails. (Reuters, March 30)

What to Watch

  • The proposal would mark a meaningful shift in the federal government’s approach to alternative investments in retirement plans, particularly by replacing a more cautious posture with a framework centered on fiduciary process rather than asset-class restrictions. (CNBC, March 30)
  • The rule could have important implications for real estate and other alternative asset managers if it leads to broader access to private-market exposure through participant-directed retirement plans.
  • The proposal does not endorse any specific asset class, and fiduciaries would still be expected to determine whether a particular investment is appropriate for plan participants.

What’s Next

  • The proposal is subject to a 60-day public comment period, with DOL signaling it hopes to finalize the rule by year’s end.

Comments are due on June 1, 2026.  RER is working on comments and welcomes input from members. 

Research Continues to Reinforce Case Against Build-to-Rent Provision in Housing Bill

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As the 21st Century ROAD to Housing Act remains in limbo in the House, new research is strengthening the case for removing the Senate bill’s build-to-rent (BTR) provision. The findings suggest the provision could curb housing supply without improving affordability.

State of Play

  • At the center of the debate is Section 901, which would require newly built single-family rental homes developed by large institutional investors to be sold to after seven years. (Roundtable Weekly, March 27 | The Atlantic, March 30)
  • Industry groups, researchers, and The Real Estate Roundtable (RER) warn that the mandate would disrupt a growing source of housing supply, raise serious constitutional concerns, and potentially trigger years of litigation involving property owners, tenants, and the federal government. (Roundtable Weekly, March 13 |  CNBC, March 29)

New BTR Research

  • Other recent studies are reinforcing concerns about the provision. A new AEI analysis found the bill’s investor restrictions could reduce supply and hurt lower-income families. (AEI study, March 27)
  • An Urban Institute case study found that single-family rental investors have developed renovation and property-management capabilities that could help rehabilitate more homes and expand the supply of affordable housing. (Urban Institute Case Study, March 30)

Roundtable & Industry Advocacy

  • RER and a broad real estate coalition have spent weeks urging lawmakers to preserve the bill’s pro-supply provisions while removing or revising Section 901, warning that the seven-year sale requirement would effectively eliminate build-to-rent housing production. (Roundtable Weekly, Jan. 9 | Jan. 16 |  Jan. 23 | Feb. 27| March 6 | March 13 | March 20 | March 27) (Letter, March 5 | Letter, March 13)
  • That case was reinforced again last week in an open letter from housing researchers, who said the mandate would undermine a growing source of supply and is especially unworkable because many BTR communities are not designed to be sold unit by unit. (Letter, Mar. 26 | MultifamilyDive, Mar. 31)

New Cost Pressures

  • Rising aluminum prices are adding new strain to an already challenging development environment, pushing construction costs higher and threatening project viability.
  • “The conflict in the Middle East is further driving up materials prices and making construction that much less affordable and many projects that much less financially viable,” said Anirban Basu, the chief economist for Associated Builders and Contractors. (PoliticoPro, March 27)
  • The pressure comes on top of elevated rates, tariff uncertainty, and labor shortages that have already slowed homebuilding and weighed on new investment. (PoliticoPro, March 27)

What’s Next

  • Congress is in recess until April 13, leaving the package’s next steps uncertain for now.

RER will continue urging Congress to protect the bill’s supply-focused provisions while removing language that would make it harder to build rental housing.

Roundtable and Coalition Support ENERGY STAR Transition to the Department of Energy

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The Real Estate Roundtable (RER) joined a broad coalition of organizations representing the consumer products, manufacturing, real estate, and retail sectors this week to support the Department of Energy’s (DOE) new role as lead federal agency for ENERGY STAR, following the recent Memorandum of Agreement with the Environmental Protection Agency (EPA). (RER News Release, March 31 | Memorandum of Agreement, March 3)

ENERGY STAR Coalition Letter

  • In a coalition letter sent this week to DOE, the groups said they look forward to collaborating with the agency to ensure an effective transition that maintains and evolves the voluntary ENERGY STAR public-private partnership. (Letter, March 30 | PoliticoPro, March 31)
  • The coalition emphasized that DOE is well-positioned to lead a modernized ENERGY STAR program that continues to provide consumers and businesses with access to efficient products and buildings with the performance they have come to expect from the ENERGY STAR brand.
  • The letter also reaffirmed strong support for keeping ENERGY STAR within the federal government. (Letter, March 30)
  • “Our longstanding partnership with the federal government’s ENERGY STAR program remains a top priority as DOE assumes the lead implementation role,” said RER’s President & CEO Jeffrey D. DeBoer. “DOE has the data, talent, lab research, and other resources to run all facets of ENERGY STAR efficiently and effectively. Down the years, ENERGY STAR for buildings has saved families and businesses hundreds of billions of dollars in energy costs, and helps create greater capacity on the grid to boost economic growth. We will continue to partner in the evolution of ENERGY STAR to support the economic growth in our buildings, plants, and consumer products.” (RER News Release, March 31)
  • Congress provided approximately $33 million for ENERGY STAR to EPA in the FY’26 appropriations bill (H.R. 6938), signed into law on Jan. 23, preserving the program through Sept. 30 following earlier reports that it could be privatized or defunded. (Roundtable Weekly, Jan. 9 | Utility Dive, March 10) 
  • Additionally, the letter noted that the program has helped save families and businesses more than $500 billion in energy costs since 1992. (Letter, March 30)

Roundtable View

Tony Malkin (Chairman and CEO, Empire State Realty Trust, Inc.), chair of The Roundtable’s Sustainability Policy Advisory (SPAC) Committee.
RER’s Sustainability Policy Advisory Committee (SPAC) Chair Anthony E. Malkin (Chairman and CEO, Empire State Realty Trust, Inc.)
  • RER has long made the business case for ENERGY STAR and, with coalition partners, emphasized that it is a federal program required by law—not one that can be privatized or operated outside the U.S. government by agency decree. (Roundtable Weekly, Mar. 6)
  • Last year, RER joined dozens of industry groups in a letter to Congress to support the ENERGY STAR. The multi-industry letter cited federal statutes that compel ENERGY STAR to be a program run by federal agencies, with DOE and EPA authorized to assign program responsibilities between themselves. (Roundtable Weekly, Jun. 6, 2025). 
  • “DOE has always been a key part of the ENERGY STAR ecosystem and is ideally suited to assume the role as the program’s primary steward and ensure its vitality and progress forward,” said RER’s Sustainability Policy Advisory Committee (SPAC) Chair Anthony E. Malkin (Chairman and CEO, Empire State Realty Trust, Inc.).
  • “ENERGY STAR has long enhanced the profitability of buildings and established a voluntary reporting structure for real estate assets. It helps our industry attract investors from all over the world to the United States. ENERGY STAR works better than any other building energy ‘label’ on the market because it is grounded in quantifiable metrics and deploys standard software geared to save money on utility bills and avoid wasted energy,” added Malkin.
  • Malkin continued, “Our industry coalition with leading organizations in the real estate, manufacturing, consumer tech, and retail sectors will continue to advocate to Congress and the Executive branch the critical role ENERGY STAR plays to advance America’s energy dominance and global competitiveness.”

RER will continue working with policymakers and aligned stakeholders to help ensure a smooth and productive transition for ENERGY STAR.

NEWS: Real Estate Roundtable and Coalition Support ENERGY STAR Transition to the Department of Energy

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(WASHINGTON, D.C.) — The Real Estate Roundtable (RER) joined organizations which represent the consumer products, manufacturing, real estate, and retail sectors in support of the Department of Energy’s (DOE) new role as lead federal agency for ENERGY STAR, following the recent Memorandum of Agreement with the Environmental Protection Agency (EPA).

In a coalition letter sent this week to DOE, the groups said they look forward to collaborating with the agency to ensure an effective transition that maintains and evolves the voluntary ENERGY STAR public-private partnership.

“Our longstanding partnership with the federal government’s ENERGY STAR program remains a top priority as DOE assumes the lead implementation role,” said RER’s President & CEO Jeffrey D. DeBoer. “DOE has the data, talent, lab research, and other resources to run all facets of ENERGY STAR efficiently and effectively. Down the years, ENERGY STAR for buildings has saved families and businesses hundreds of billions of dollars in energy costs, and helps create greater capacity on the grid to boost economic growth. We will continue to partner in the evolution of ENERGY STAR to support the economic growth in our buildings, plants, and consumer products.”

The coalition emphasized that DOE is well positioned to lead a modernized ENERGY STAR program that continues to provide consumers and businesses with access to efficient products and buildings with the performance they have come to expect from the ENERGY STAR brand. The letter also reaffirmed strong support for keeping ENERGY STAR within the federal government.

“DOE has always been a key part of the ENERGY STAR ecosystem and is ideally suited to assume the role as the program’s primary steward and ensure its vitality and progress forward,” said RER’s Sustainability Policy Advisory Committee (SPAC) Chair Anthony E. Malkin (Chairman and CEO, Empire State Realty Trust, Inc.). “ENERGY STAR has long enhanced the profitability of buildings and established a voluntary reporting structure for real estate assets. It helps our industry attract investors from all over the world to the United States. ENERGY STAR works better than any other building energy ‘label’ on the market because it is grounded in quantifiable metrics and deploys standard software geared to save money on utility bills and avoid wasted energy.”

Malkin continued, “Our industry coalition with leading organizations in the real estate, manufacturing, consumer tech, and retail sectors will continue to advocate to Congress and the Executive branch the critical role ENERGY STAR plays to advance America’s energy dominance and global competitiveness.”

The letter noted ENERGY STAR has helped families and businesses save more than $500 billion in energy costs since 1992 and said the coalition stands ready to support a smooth, transparent, and comprehensive transition to DOE.

About The Real Estate Roundtable

The Real Estate Roundtable (RER) brings together leaders of the nation’s top publicly-held and privately-owned real estate ownership, development, lending, and management firms with leaders of major national real estate trade organizations to jointly address key national policy issues relating to real estate and its important role in the global economy.

The collective value of assets held by RER members exceeds $4 trillion. RER’s membership represents more than 3 million people working in real estate; 12 billion square feet of office, retail, and industrial space; over 4 million apartments; and more than 5 million hotel rooms. It also includes the owners, managers, developers, and financiers of senior, student, and manufactured housing—as well as medical offices, life science campuses, data centers, cell towers, and self-storage properties. RER’s policy news and more are available on the RER website

David Simon, Transformative Leader in Retail Real Estate

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The Real Estate Roundtable mourns the passing of David Simon, the longtime chairman, chief executive officer, and president of Simon Property Group, who died on March 22. Simon transformed his family’s business into the world’s leading retail property company and was one of the most influential figures in modern retail real estate. (WSJ | Simon Property Group Press Release, March 23)

Cost Recovery Reform to Spur New Housing Supply Gains Traction in Washington

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A new report from the influential Center for American Progress (CAP) suggests that allowing immediate expensing for new multifamily rental housing could spur a major increase in multifamily construction and bring down housing costs over the next decade. (CAP Report, March 11)

Report Findings

  • The CAP report found that immediate expensing for new multifamily rental housing, with a per-unit cap of $150K-$250K, could spur the creation of 706,000 to 1.06 million new homes over 10 years, at a cost of up to $206 billion. (PoliticoPro, March 12)
  • The researchers claim that faster cost recovery would lower the cost of capital, improve project cash flow, and help move more rental developments from infeasible to financeable.
  • The research also shows that full or partial expensing could increase housing supply at a lower cost per unit than many direct subsidy programs. (Tax Policy Center, March 17)
  • The researchers’ preferred approach would cap immediate expensing at $150,000 per unit, paired with a refundable credit option to address the fact that many real estate investors are tax-exempt or otherwise unable to use additional tax deductions. They estimate the proposal could produce roughly 755,000 new homes over a decade for about $154 billion.
  • The proposal also parallels last year’s One Big Beautiful Bill Act, which provided full expensing for new factories. The Tax Foundation called that change a step forward, but said its economic benefits would be limited because it is temporary and narrowly targeted. (Tax Foundation, Oct. 27, 2025)
  • The Tax Foundation published a reply to the CAP report that generally supports the approach while outlining a variety of cost recovery reform options for policymakers to consider, including: neutral cost recovery, and investment tax credit, tax deduction transferability, shorter asset lives, and partial expensing. (The Tax Foundation, Mar. 23)
  • The recent reports by the two influential think tanks are further evidence that policymakers are open to new approaches aimed at addressing housing affordability challenges.

On the Hill

  • Sen. Lisa Blunt Rochester (D-DE) introduced the Rental Housing Investment Act on March 12, which would allow builders to immediately deduct a portion of new multifamily construction costs rather than recover them over 27.5 years. (Sen. Rochester News Release, Mar. 12)
  • The bill would allow builders to immediately deduct up to $150,000 per unit in construction costs, with an enhanced deduction of up to $250,000 per unit for projects that include income-restricted units under long-term attainability commitments. The incentive would apply only to newly constructed multifamily rental housing. (USA Today, Mar. 11)
  • The measure is intended to support efforts to expand rental supply and address affordability pressures by improving the tax treatment of new multifamily development, as high interest rates and rising construction costs continue to weigh on housing production.

Property Conversions

  • Office conversions now account for nearly half of all future adaptive reuse projects. (CRE Daily, Mar. 25)
  • RentCafe reported that 90,300 apartments were in the conversion pipeline nationwide at the start of 2026, up 28% from 70,600 a year earlier, as the trend continues to gain momentum in both major and mid-sized markets. (RentCafe, Mar. 24)
  • New York leads the pipeline, followed by Washington, D.C., and Chicago. (Bisnow, March 26 | Cushman & Wakefield, Feb. 2026)
  • New research from Pew and Gensler highlights office-to-residential conversions, particularly lower-cost co-living microapartments in underused downtown buildings.  (Pew Research, Mar. 24)
  • Pew found the model could cut per-unit development costs by more than half in some markets and deliver nearly four times as many affordable homes per subsidy dollar compared to traditional studio development. (Pew Research, Mar. 24)
  • RER has strongly backed the bipartisan Revitalizing Downtowns and Main Streets Act of 2025 (H.R. 2410), which would create a market-based tax incentive for converting older commercial buildings to residential use to help expand housing and support the recovery of downtowns and neighborhoods still feeling the effects of the pandemic. (Roundtable Weekly, Mar. 2025)

RER will continue working with policymakers to advance tax and regulatory policies that encourage property conversions, reduce barriers to development, and help expand the nation’s housing supply.

Policymakers Continue Focus on Grid Reliability, Electricity Affordability 

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Congress and the White House are elevating questions around energy infrastructure, cost allocation, and the ability of the power sector to meet the needs of AI in a rapidly evolving economy.

Hearing Spotlights Grid Strain

  • On March 25, the Senate Energy and Natural Resources (ENR) Committee held a hearing on the state of the U.S. bulk power system. Lawmakers and witnesses pointed to growing strain from rising electricity demand, infrastructure delays, and reliability concerns. (Senate ENR Hearing, Mar. 25)
  • Witnesses agreed the U.S. is entering a new phase of electricity demand growth not seen in decades—driven by a combination of AI applications, domestic manufacturing, and electrification—creating both reliability risks and investment uncertainty. (Senate ENR Hearing, Mar. 25)
  • Lawmakers and witnesses suggested several solution pathways, including permitting reform to accelerate project approvals, expanded transmission buildout to relieve congestion, and improved interconnection processes to bring new generation online faster. (Senate ENR Hearing, Mar. 25)
  • Dr. Liza Reed (Niskanen Center) emphasized the central role of transmission, stating, “We need more energy and transmission to move that energy,” and warning that “a shortage of grid capacity is the primary barrier to the cost-effective and swift deployment of AI in this country.” (Reed Testimony, Mar. 25)
  • As The Real Estate Roundtable’s (RER) Policy Guide on building performance standards states, the transition to a digital economy raises serious concerns about electricity availability, as “[v]ast swaths of the U.S. are at risk of running short of power.” (Roundtable Weekly, Oct. 11, 2024)

Executive Action

  • On March 20, the White House released its National Policy Framework for Artificial Intelligence, accelerating congressional attention on these issues by directly linking data center growth to energy policy. (White House AI Framework, Mar. 20)
  • The framework calls on Congress to “ensure that residential ratepayers do not experience increased electricity costs as a result of new AI data center construction and operation” while also urging policymakers to “streamline federal permitting for AI infrastructure construction and operation.” (White House AI Framework, Mar. 20)
  • The administration’s approach builds on its earlier ratepayer protection pledge, which requires major technology companies to provide or pay for their own power. White House officials have urged Congress to codify that commitment into law. (E&E News, Mar. 23)
  • Congressional leaders quickly signaled alignment with the framework. In a joint statement, House Republican leaders said Congress must “enact a national framework that unleashes the full potential of AI… and provides important protections for American families.” (E&E News, Mar. 23)
  • At the same time, divisions remain, with some lawmakers raising concerns about federal preemption and the broader scope of the proposal. (E&E News, March 23)

State of Play – Permitting Reform

  • Lawmakers have been advancing multiple legislative approaches to address permitting delays, transmission bottlenecks, and the growing energy demands of data centers.
  • Notably, the RER-backed, bipartisan SPEED Act (H.R. 4776,), which passed the House in December 2025, would provide permitting certainty, codify certain NEPA reforms, and streamline environmental reviews for energy infrastructure. (Roundtable Weekly, Dec. 19, 2025)
  • RER believes permitting reform is essential for advancing our economy’s energy transition. The current fragmented system of administrative reviews and approvals hinders the delivery of quick, low-cost, reliable electricity to our nation’s homes and commercial buildings. (Roundtable Weekly, Oct. 10, 2025)
  • Permitting reform talks remain active but unsettled. Bipartisan negotiations continue and some Republicans consider narrower reconciliation options, though procedural constraints and the GOP’s narrow majority leave the path forward uncertain. (E&E News, Mar. 26)

Data Centers

  • Separately, lawmakers have introduced a range of proposals addressing data center energy use and cost allocation.
  • Recently introduced bills would require federal studies on ratepayer impacts (H.R. 6529), expand FERC oversight (H.R. 8033), ensure large-load customers cover their electricity costs (H.R. 7977), and mandate dedicated power sources for new data centers (S. 3852)—reflecting growing congressional focus on preventing cost shifts to consumers. (E&E News, Mar. 23)
  • On March 25, Sen. Dick Durbin (D-IL) introduced the Data Center Water and Energy Transparency Act, which would require data center developers and operators to disclose energy and water use to state and local officials considering new projects. (Sen. Durbin Press Release, Mar. 25)
  • Meanwhile, Senators Elizabeth Warren (D-MA) and Josh Hawley (R-MO) joined in a letter to the Energy Department’s data gathering arm, urging the agency to “establish a mandatory annual reporting requirement for data centers and other large loads.” (Sens. Warren, Hawley press release |  The Verge, Mar. 26)

RER will continue to engage with members of Congress and the administration to advance policies that streamline project approvals, support efficient cost allocation, and enable the energy infrastructure needed to power the real estate sector and the broader economy.

House Weighs Next Move on ROAD to Housing Act

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The bipartisan 21st Century ROAD to Housing Act remains in limbo in the House, where lawmakers are still weighing how to reconcile the Senate-passed package with the chamber’s own housing bill. The Senate approved its version two weeks ago after combining House priorities with the upper chamber’s broader housing agenda, but House members have raised concerns about several provisions added or revised in the Senate package—most notably the bill’s treatment of build-to-rent (BTR) housing.

State of Play

  • The House and Senate remain at odds over how to advance the housing package after the Senate passed its bill with overwhelming bipartisan support earlier this month. (PoliticoPro, Mar. 23)
  • House Financial Services Ranking Member Maxine Waters (D-CA) urged House Democrats this week to support a formal conference committee, arguing that the final bill should restore House priorities and address stakeholder concerns—an apparent reference to the Senate bill’s restrictions on large institutional investors in single-family housing.
  • Rep. Mike Flood (R-NE) said Wednesday that Senate Banking and House Financial Services leaders need to meet to resolve key differences between the two packages.
  • Rep. Flood identified three major House concerns with the Senate bill: the need to preserve but revise the provision restricting institutional investors from purchasing single-family homes, the omission of environmental review changes for certain affordable housing programs, and the Senate’s inclusion of a temporary rather than permanent restriction on a Federal Reserve central bank digital currency. (PoliticoPro | Watch Rep. Flood Remarks, Mar. 25)

Build-to-Rent

  • The biggest sticking point remains the Senate bill’s requirement that rental homes developed by large investors be sold to individual homebuyers after seven years. (The Urban Institute, Mar. 17)
  • House Republicans have raised concerns that the provision could undercut new rental housing production, disrupt financing, and introduce significant long-term uncertainty into the market.
  • The Real Estate Roundtable (RER) has warned that the bill’s forced-sale structure raises serious constitutional concerns and could trigger years of litigation involving property owners, tenants, and the federal government.

New BTR Research

  • Based on a March 19 discussion with 146 BTR executives, developers, and capital partners, the firm reported this week that the Senate bill’s seven-year disposal requirement has already frozen capital and halted new development ahead of enactment. Some capital will not return even if the bill is altered, reflecting ongoing concerns about future policy risk. (John Burns Research & Consulting, Mar. 24)

RER Advocacy

  • RER and a broad real estate coalition have spent weeks urging lawmakers to preserve the housing bill’s supply-focused provisions while removing language that would force large investors to sell newly built single-family rental homes after seven years. (Roundtable Weekly, Jan. 9 | Jan. 16 |  Jan. 23 | Feb. 27| Mar. 6 | Mar. 13 | Mar. 20)
  • In March, RER joined a series of coalition letters urging senators to remove or revise Section 901, warning that the seven-year sale requirement would effectively eliminate the production of BTR housing. (Roundtable Weekly, Mar. 20) (Letter, Mar. 5 | Letter, Mar. 13)
  • That message was reinforced again this week in an open letter from housing policy researchers, who warned that the Senate-passed ROAD to Housing Act would undermine BTR housing, which represents a growing source of new supply in markets where housing is already out of reach for many households. (Letter, Mar. 26)
  • The researchers said BTR has helped expand the housing stock, particularly for middle-income renters seeking single-family-style housing, and cautioned that the bill’s seven-year sale mandate would disrupt the model’s economics and reduce future production.
  • The letter also noted that many BTR communities are not structured to be sold off unit-by-unit, making the requirement especially problematic in practice.

What’s Next

  • The House and Senate are out on recess and do not return to Washington until April 14, leaving the future of the broader housing package uncertain. (NYT, Mar. 25)

Whether lawmakers pursue a formal conference or a narrower compromise, RER will continue urging Congress to preserve the bill’s pro-supply provisions while removing language that would reduce rental-housing production and make it more difficult to meet the nation’s growing housing needs.

Fed Holds Rates Steady Amid Heightened Uncertainty and Inflation Risks

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The Federal Reserve’s Federal Open Market Committee (FOMC) voted this week to hold its benchmark interest rate steady at 3.5 percent to 3.75 percent, as policymakers weigh persistent inflation, geopolitical risks, and mixed economic signals.

Key Takeaways

  • Fed Chair Jerome Powell emphasized that the current stance on monetary policy is “appropriate” as the economy continues to expand at a solid pace. (Powell press conference, March 18)
  • Price pressures remain above target. The Fed’s preferred inflation gauge shows Personal Consumption Expenditures (PCE) rising 2.8 percent annually, with core inflation at 3.0 percent, reflecting ongoing impacts from tariffs and price increases for goods. (Powell press conference, March 18)
  • Labor market conditions have stabilized but softened at the margins. Job growth remains subdued while unemployment has held at 4.4 percent in recent months. (Powell press conference, March 18)

Policy Outlook

  • Fed officials reiterated that future rate decisions will remain “data dependent” and emphasized that monetary policy is not on a preset course. (Federal Reserve statement, March 18)
  • Markets now expect a later timeline for any additional easing. Current pricing points to late 2026 as the earliest likely window for another cut, given persistent inflation and broader global uncertainty. (CNBC, March 17)
  • Policymakers also signaled they will be cautious in reacting to short-term shocks. Recent energy price increases may lift headline inflation in the near term, but the Fed appears inclined to wait for clearer evidence before changing course. (Reuters, March 18)
  • Political pressure continues to surround the central bank, including renewed calls from President Trump for lower rates. Even so, Fed leaders have maintained that economic conditions, not politics, will guide policy decisions. (CNBC, March 17 | Reuters, March 18)
  • For commercial real estate, this environment continues to present challenges. Higher interest rates are weighing on valuations, constraining refinancing activity, and limiting transaction volume.

Congressional Hearing on Fed Independence and Debt Pressures

  • The House Financial Services Task Force on Monetary Policy, Treasury Market Resilience, and Economic Prosperity held a hearing this week titled, “Revisiting the Treasury-Fed Accord.” The discussion focused on the historical framework governing Fed independence, the risks of fiscal dominance, and whether updated coordination between the Treasury and the Fed is needed. (Press release, March 19)
  • Task Force Chairman Frank Lucas (R-OK) emphasized the need to clarify institutional boundaries, stating Congress should encourage “a formal dialogue between the Fed and Treasury on the appropriate boundaries of their authority… while reinforcing monetary policy independence.” (Press release, March 19)
  • Lawmakers and witnesses also warned that rising federal debt could pressure interest rates and inflation. As Thomas Hoenig, Distinguished Senior Fellow, The Mercatus Center at George Mason University, noted, continued deficits put “strain on the markets” and “upward pressure on interest rates.” (Press release, March 19)

RER will continue to track monetary policy developments and engage policymakers on the need for stable capital markets, access to credit, and policy solutions that support long-term economic growth and real estate investment.

Federal Regulators Release Revised Basel III Endgame Proposal

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The Federal Reserve, Federal Deposit Insurance Corporation (FDIC), and Office of the Comptroller of the Currency (OCC) on Thursday unveiled a substantially revised Basel III Endgame proposal, replacing the 2023 framework that drew broad industry opposition. (WSJ | Fed Board Memo, March 19)

State of Play

  • The revised proposal would reduce capital requirements for the largest U.S. banks by 2.4% overall. (PoliticoPro, March 19)
  • The package would also replace the dual-track capital framework for the largest banks with a single approach, revise the G-SIB surcharge, and lower risk weights for mortgages and mortgage servicing assets. (ABA Banking Journal, March 19)
  • Regulators said the changes are intended to align capital with risk better, preserve safety and soundness, and support lending and other financial intermediation activities across economic conditions. (Fed Board Memo, March 19)
  • The interagency proposal would raise capital requirements by an estimated 1.4% under the revised Basel framework, but that increase would be more than offset by a 3.8% reduction in the G-SIB surcharge for the largest U.S. banks, for a net 2.4% decline overall.
  • Midsize banks would be allowed to decrease their capital buffers by an average of 5.2%, including stress-test revisions, and smaller banks by 7.8%. (WSJ, March 19 | AAF, March 20)
  • Regulators said the revised framework would also better support traditional lending and reduce incentives for activity to migrate outside the regulated banking system, including through lower risk weights for mortgages and mortgage servicing assets. (OCC News Release, Mar. 19)

Why It Matters

  • For commercial real estate, the reset could ease regulatory pressure that threatened to constrain credit for real estate lending, mortgage activity, and other capital-intensive transactions.
  • “Lowering the amount of capital held by banks would give them more money to deploy into the economy, potentially boosting growth,” said Federal Reserve Vice Chair for Supervision Michelle Bowman, who led the central bank’s efforts to craft the proposal. (Fed Press Release, March 19)
  • House Financial Services Committee Chairman French Hill (R-AR) and Subcommittee on Financial Institutions Chairman Andy Barr (R-KY) said the agencies had moved toward a “more balanced Basel III framework,” adding that right-sized capital standards are critical to preserving lending capacity, competitiveness, and access to credit. (Reps. Hill, Barr Statement, March 19)

Roundtable Advocacy

  • The Real Estate Roundtable (RER) has consistently opposed the original Basel III proposal, citing its potential negative impact on available credit capacity for commercial real estate transactions, market liquidity, and economic growth. (Roundtable Weekly, Nov. 2023; Jan. 2024; Mar. 2024)
  • In December, RER and a coalition of leading business trade organizations urged prudential regulators to examine and modernize large bank capital requirements so they continue supporting consumers, businesses, and the broader U.S. economy. (Letter, Dec. 2) (Roundtable Weekly, Dec. 5)
  • The coalition letter underscored the negative economic impacts of inappropriately calibrated capital rules, highlighted risks to American competitiveness, and commended ongoing agency efforts to improve the framework. (Roundtable Weekly, Feb. 20)

The agencies will accept comments on the proposed rules until June 18, and RER’s Real Estate Capital Policy Advisory Committee (RECPAC) looks forward to members’ input as it prepares comments on the proposal.