Author: abigail_grenadier

New Lumber Tariffs Spark Housing Affordability Concerns

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The Trump administration announced new trade measures this week aimed at building materials. The plan imposes a 10% duty on imported softwood lumber and a 25% tariff on kitchen cabinets and vanities—set to rise to 50% in 2026. The added cost burden threatens to ripple through the housing market, raising barriers to affordability at a time of heightened demand. (White House, Sept. 29) (NYT, Oct. 2)

State of Play

  • The new tariffs come on top of existing surcharges, marking a sharp escalation in trade measures against foreign suppliers of housing and construction products. (GlobeSt. Oct. 1)
  • President Trump’s tariff proclamation found that current wood imports “are weakening our economy, resulting in the persistent threats of closures of wood mills and disruptions of wood product supply chains” and putting at risk the United States’ ability “to meet demands for wood products that are crucial to the national defense and critical infrastructure.” (White House Action, Sept. 29)
  • Analysts warn that the tariffs could exacerbate the housing shortage by slowing construction, and, combined with earlier steel and aluminum tariffs, undermine the momentum that Fed rate cuts might otherwise provide. (NYT, Oct. 2)
  • The U.S. imports roughly one-third of the lumber it consumes because domestic production cannot meet demand. Canada supplies nearly 85% of U.S. lumber imports. (NAHB, Sept. 30)

CRE & Affordable Housing

  • Tariffs may present several challenges for commercial real estate, including increased construction costs, potential project delays, and heightened uncertainty among investors. (CBRE, March 19 | Roundtable Weekly, April 4)
  • “These new tariffs will create additional headwinds for an already challenged housing market by further raising construction and renovation costs,” said National Association of Home Builders (NAHB) Chairman Buddy Hughes.
  • Builders caution the measures will add to affordability pressures for renters and homebuyers already facing tight supply. (CRE Daily, Oct. 1)
  • Last month, it was reported that President Trump may declare a national housing emergency this fall. (Roundtable Weekly, Sept. 12)
  • As part of the broader effort to address the nation’s housing shortage, property conversions are gaining momentum. Manhattan alone launched 4.1 million square feet across 15 projects through August 2025, the fastest pace since 2008, according to a recent Cushman & Wakefield report. (GlobeSt., Oct. 2)
  • RER urges federal policymakers to support incentives for these transformative projects, helping to meet the nation’s growing housing demand. (RER Annual Report – Housing 2025)

RER will continue to engage with policymakers to reduce regulatory burdens and eliminate other obstacles that are impeding development and expand America’s housing infrastructure.

Treasury Issues Guidance on Rural Opportunity Zone Investments

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The Treasury Department and Internal Revenue Service (IRS) this week issued Notice 2025-50, providing guidance on Opportunity Zone (OZ) investments in rural areas under the One Big Beautiful Bill (OB3) Act. The notice designates 3,309 census tracts—about 38% of the OZ map—as rural, giving investors and developers clarity on how the new rules apply. (IRS, Sept. 30)

New Guidance

  • Rural definition: Any census tract outside a city or town with a population greater than 50,000—and not an adjacent urbanized area—qualifies as rural. (BisNow, Oct. 1)
  • 3,309 tracts designated: The notice identifies 3,309 rural OZ census tracts, representing about 38% of all OZs designated in 2018.
  • Lowered improvement threshold: Effective July 4, 2025, real estate projects in rural OZs must meet a more manageable 50% substantial improvement test—down from 100%—to qualify for OZ tax benefits. The substantial improvement test governs the level of new investment required, relative to the cost of the property.
  • The guidance applies only to the current OZ map. Treasury said definitions for future OZ designations, which will take effect in 2027, will be addressed separately. (PoliticoPro, Sept. 30)
  • The latest guidance enhances certainty for investors and developers seeking to expand housing and economic opportunity in rural America.

Roundtable Advocacy

  • The Real Estate Roundtable (RER) has long championed OZs as a transformative tool to drive economic growth and increase affordable housing in underserved communities. (Roundtable Weekly, April 4)
  • RER members have used OZ capital nationwide to finance multifamily housing, mixed-use developments, and life sciences facilities that support job creation and local tax revenues.
  • At the American College of Real Estate Lawyers (ACREL) Annual Meeting recently, RER President and CEO Jeffrey DeBoer and SVP & Counsel Ryan McCormick addressed the enhanced role of OZs in revitalizing communities. (Watch Video)
  • This week, RER’s Opportunity Zone Working Group met virtually with staff from Sen. Tim Scott (R-SC) office, the leading Congressional sponsor and advocate of OZs, to discuss next steps in the implementation of the OZ reforms and enhancements.

Why It Matters

  • Since 2017, OZs have spurred more than $120 billion in investment—much of it directed toward new housing, helping to expand supply, create jobs, and revitalize economically distressed areas.  (RER Annual Report 2025)
  • Housing impact: OZs accounted for 20% of all new multifamily units in 2023, up from 8% when the program began. (ULI, Sept. 22)
  • Economic impact: OZ incentives nearly doubled housing production in designated tracts from 2019 to 2024, generating more than 313,000 new residential addresses at relatively low fiscal cost. (Economic Innovation Group, March 11)

RER’s Tax Policy Advisory Committee (TPAC) and Opportunity Zone Working Group will continue to evaluate OZ changes, address technical issues, and ensure the industry’s voice is heard as Treasury and IRS implement the new law.

Government Shutdown: What It Means for CRE

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The federal government shut down on Wednesday—the first lapse since 2019—with no deal in sight. Both chambers are at an impasse after dueling stopgap funding bills failed again this week. (AP News, Oct. 2)

State of Play

  • Senate Democrats blocked Republicans’ “clean” Nov. 21 continuing resolution (CR). Republicans rejected Democrats’ version that included extending enhanced Affordable Care Act subsidies and reversing Medicaid cuts.
  • Senate Majority Leader John Thune (R-SD) and Minority Leader Chuck Schumer (D-NY) may meet Friday in their first one-on-one since the standoff began. Another round of votes is planned for Friday. (Punchbowl News, Oct. 2)
  • If Democrats block the GOP plan again, Majority Leader Thune is expected to adjourn the Senate until Monday, canceling Saturday votes, and force another vote on Monday. (Punchbowl News, Oct. 2)

CRE Impact

  • NFIP: The National Flood Insurance Program (NFIP) cannot issue new policies or renewals during the shutdown, threatening thousands of real estate transactions. The Real Estate Roundtable (RER) supports a long-term, sustainable NFIP reauthorization to avoid recurring market disruptions. (Roundtable Weekly, Sept. 19)
  • Senate Banking Committee Chair Tim Scott (R-SC) “remains committed” to funding the program and is “optimistic” Democrats will join Republicans to prevent a lapse in coverage during peak hurricane season, his spokesperson said. (Politico, Sept. 30)
  • Energy: The ENERGY STAR program has halted partner application processing, product list updates, and specification releases—stalling efficiency certifications important to building owners and tenants. Meanwhile, it remains unclear how the shutdown will affect EPA Administrator Lee Zeldin’s broader reorganization and regulatory timeline. (PoliticoPro, Sept. 30, Oct. 1 | NAHB, Oct. 1)
  • Housing: HUD is unable to access certain funds used to prevent evictions in its Tenant-Based Rental Assistance Program. Affordable housing initiatives also face delays due to the furloughing of program staff. (Politico, Sept. 30)
  • Construction: Fallout from the shutdown is also reverberating through the construction sector, where contractors warn that halting federal projects will ripple into private markets by raising costs and eroding confidence. (UtilityDive, Oct. 1)
  • Tax Policy & Treasury: Despite the shutdown, Treasury has said it will continue implementing President Trump’s tax law and deregulatory agenda, relying on multi-year funding streams. Its tax policy office will remain active, advancing the president’s tax cuts and regulatory rollbacks. Other Treasury operations—including debt management, collections, and oversight of financial markets will also continue. (PoliticoPro, Sept. 29)
  • “Government shutdowns and temporary extensions of essential programs like the NFIP create avoidable uncertainty that disrupts real estate markets and undermines economic confidence,” said RER President & CEO Jeffrey DeBoer. “Congress should act responsibly by providing long-term solutions that protect communities and the American people, encourage investment, and sustain growth.”

As the shutdown continues, mounting strain on real estate transactions, insurance coverage, and investment planning will intensify pressure on Congress to resolve the impasse.

New Visa Bill Addresses Construction Worker Shortage; White House Unveils “Trump Cards”

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Rep. Lloyd Smucker (R-PA) this week reintroduced the Essential Workers for Economic Advancement Act (H.R. 5494), bipartisan legislation aimed at expanding visa opportunities to address labor shortages in construction, hospitality, and other sectors. (Rep. Smucker Press Release)

Why It Matters

  • The Essential Workers bill proposes a new H-2C visa program for critical jobs that do not require a college degree but are essential to business operations and U.S. economic growth. (Coalition Statement, Sept. 17)
  • “Job creation and job preparation must go hand-in-hand,” Rep. Smucker said. “Investing in opportunities to strengthen our workforce and grow our economy is a win-win for American workers and businesses.” (Rep. Smucker Press Release)
  • There is an estimated shortage of 500,000 construction workers. Without additional labor, efforts to build more housing and address the nation’s affordability crisis will remain stalled. (Associated Builders and Contractors, Jan. 24)

Roundtable View

  • The Real Estate Roundtable (RER) commended the legislation.
  • “Now that the administration has controlled the emergency at the border, we need to address the nation’s affordable housing emergency—and we must build more supply to get out of it,” said Jeffrey D. DeBoer, RER President and CEO.
  • DeBoer continued: “The labor shortage is exacerbating the housing shortage … Congress should develop policies to increase our supply of construction workers so they can build all types of homes in communities across the country. The bipartisan Essential Workers for Economic Advancement Act is exactly the kind of smart response we need.” (Rep. Smucker Press Release, Sept. 23)
  • At the recent 2025 C5 + CCIM Global Summit in Chicago, DeBoer also remarked that a targeted construction visa program is essential to expand the labor force and increase housing supply.
  • 21 other business groups support the bipartisan Essential Workers bill, including the American Hotel & Lodging Association, Associated General Contractors of America, Business Roundtable, Leading Builders of America, and the National Association of Home Builders.

Trump “Gold Card”

  • On Sept. 19, 2025, the White House released an Executive Order, fact sheet, and website announcing Gold and Platinum “Trump Cards.” These programs are intended to grant permanent residency in the U.S. for immigrants with high net worth.
  • The Secretaries of Commerce, State, and Homeland Security will coordinate and establish a program within 90 days that expedites “green cards” issued under the EB-1 and EB-2 visa categories for foreign nationals who make a “significant financial gift to the Nation.”
  • Gold Card Website: TrumpCard.gov outlines new residency options tied to multimillion-dollar “gifts” to the U.S. to obtain a Gold Card ($1 million), Corporate Gold Card ($2 million), or Platinum Card ($5 million).
  • Following the EO’s release, RER developed a fact sheet summarizing what we currently know about the Trump Card program – and how it may interact with the EB-5 “regional center” program, which provides visas for foreign investors in infrastructure, real estate, and other U.S. development projects. (RER Fact Sheet)
  • EB-5: The “regional center” program rests on firm statutory foundation through 2027 under the EB-5 Reform and Integrity Act, enacted by Congress in 2022. EB-5 dates back to the 1990s and is the most established investor visa pathway with a proven record of creating jobs for U.S. workers. (Forbes, Sept. 22)
  • H-1B changes: The administration also announced that a $100,000 fee would accompany new applications for H-1B visas for highly-skilled workers— intensifying debate between critics who argue foreign workers displace Americans and business leaders who view overseas talent as vital to U.S. competitiveness. (Axios, Sept. 20 | The Hill, Sept. 23)
  • At a Sept. 19 press conference, Commerce Secretary Howard Lutnick said the new visa programs and HB-1 fee could raise over $100 billion, which President Donald Trump pledged the government will use toward tax cuts and debt reduction. (Tax Notes, Sept. 23)

RER Advocacy

  • In March, RER sent a letter to Sec. Lutnick, endorsing the “Gold Card” proposal, and reiterating the real estate industry’s longstanding support for the EB-5 program. (Roundtable Weekly, March 14)
  • As RER’s letter emphasized, the “Gold Card” and EB-5 must work in tandem to achieve multiple objectives: attract top global talent, drive foreign investment to the U.S., and create jobs for American workers. (Letter, March 11)

RER will continue to advocate for common sense immigration policies that prioritize national security while also boosting U.S. economic growth, productivity, and housing supply.

Government Shutdown Deadline Nears

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Congress has less than a week to keep the government open as an Oct. 1 shutdown looms. (Punchbowl News, Sept. 24)

State of Play

  • House GOP plan: A continuing resolution (CR) through Nov. 21 that would also extend the National Flood Insurance Program (NFIP). Senate Democrats blocked it. (Politico, Sept. 25)
  • Democratic plan: A shorter CR to Oct. 31 that adds priorities such as Affordable Care Act subsidies and reversing Medicaid cuts. Senate Republicans blocked it. (Punchbowl News, Sept. 23)
  • GOP leaders frame their plan as a clean extension to buy time to keep the government open while negotiations continue. Democrats say Republicans are ignoring urgent needs.
  • On Wednesday, President Trump canceled a planned meeting with Senate Democratic Leader Chuck Schumer (D-NY) and House Democratic Leader Hakeem Jeffries (D-NY), rejecting their push to include healthcare funding in a deal to avert a shutdown. (AP News, Sept. 23)
  • In a social media post, he said no meeting with Democratic leaders “could possibly be productive.”
  • Rep. Jeffries also scheduled a caucus call on Friday to discuss “the path forward,” and a follow-up meeting in Washington on Sept. 29, despite the House being out of session. (Roll Call, Sept. 24)

Government Funding & CRE

  • Without congressional action, the NFIP will lapse on Sept. 30. Another short-term extension would be its 34th in eight years.
  • The Real Estate Roundtable (RER) supports a sustainable, long-term NFIP reauthorization with appropriate reforms. A robust program is essential for residential markets, catastrophe insurance capacity, and the broader economy.
  • The CR would also let the Department of Housing and Urban Development (HUD) use funds to prevent evictions in the Tenant-Based Rental Assistance program. (PoliticoPro, Sept. 17)

Senate Democratic Leaders say they won’t support any House-passed funding bill unless GOP leaders negotiate, while Republicans argue there’s nothing to discuss—casting next week’s vote on a “clean” CR as the only path forward. (The Hill, Sept. 25)

OB3 Act Ends “Phantom Income” Tax Penalty on Condominium Development

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A new PwC analysis highlights the significance of tax accounting reforms in the One Big Beautiful Bill (OB3) Act, which end a long-standing burden on condominium developers—a change long advocated by The Real Estate Roundtable.

Why It Matters

  • The OB3 Act expands eligibility for the completed contract method (CCM) of accounting, allowing residential condominium projects to defer income recognition until projects are substantially complete. (PwC Study, Sept. 18)
  • This reform aligns tax liability with actual receipts and ends the problem of phantom income that often arises when condo units are pre-sold to buyers prior to completion. The change closely tracks standalone legislation, the Fair Accounting for Condominium Construction Act, long championed by RER. (RER Annual Report, July 2025)
  • Mixed-use projects with a substantial residential component can also qualify if 80% or more of the costs are tied to dwelling units. (PWC Study, Sept. 18)
  • Prior tax rules forced developers to use the percentage-of-completion method (PCM), requiring them to pay taxes on projected profits before projects were completed or units were sold.
  • PwC notes the expansion “opens the door” for general contractors and subcontractors to benefit, particularly in high-cost urban markets where new housing is most needed.

Roundtable Advocacy – Condominium Construction

  • Since 2015, RER has sought to promote housing construction by repealing the discriminatory tax accounting rule that unfairly creates phantom income for condo developers.
  • New condominium developments can take years to complete. Developers often market units and collect deposits to secure financing, but contractual restrictions typically limit access to those funds until closing.
  • Recent sponsors of the Fair Accounting for Condominium Construction Act have included Rep. Vern Buchanan (R-FL) in the House and Sen. Todd Young (R-IN) in the Senate.

RER will continue advocating for policies that encourage capital formation, housing construction, and rational taxation of real estate.

Fed Cuts Rates in Welcome Move for CRE

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On Wednesday, the Federal Reserve reduced its benchmark interest rate by 25 basis points, marking the first rate cut since December 2024. Central bank officials also projected two additional rate reductions this year, citing growing concerns about labor market softening and economic headwinds.

Fed’s Decision

  • The Fed’s move brings its target federal funds rate to a range of 4 percent to 4.25 percent, aligning with expectations on Wall Street. (CNBC, Sept. 17)
  • Fed Chair Jerome Powell emphasized that while inflation remains above the 2 percent target, rising signs of labor market weakness justify a more accommodative stance.
  • Governor Stephen Miran, confirmed to the Fed Board on Monday, cast the lone dissent in favor of a steeper half-point cut.
  • The central bank’s latest projections signal two more rate cuts before year-end, though the “dot plot” of officials’ individual expectations varied considerably.

Housing Impact

  • Mortgage rates have responded quickly to the Fed’s decision, falling to 6.17 percent as of Thursday—the lowest level in nearly a year. (Fortune, Sept. 18)
  • However, mortgage rates remain elevated compared to pre-pandemic levels, leaving many prospective homebuyers priced out. Home values remain roughly 50 percent higher than at the start of the decade. (AP News, Sept. 18)
  • Chair Powell acknowledged that monetary policy alone cannot solve the nation’s housing affordability crisis. “There’s a deeper problem here, that’s not a cyclical problem that the Fed can address, and that is just a pretty much nationwide housing shortage,” he said. (CNN, Sept. 17)
  • The Real Estate Roundtable (RER) continues to advocate for bipartisan solutions that increase housing supply and reduce regulatory barriers to new development, such as the Road to Housing Act (S. 2651) and the Revitalizing Downtowns and Main Streets Act (H.R. 2410).

Implications for CRE

(L-R): Jef Conn, Jeffrey DeBoer, and Shannon McGahn
  • The Fed’s rate cut comes soon after the release of RER’s Q3 2025 Sentiment Index, which reflected cautious optimism among CRE executives. The Index rose 13 points from last quarter to a score of 67, as signs of stabilization and sector-specific growth have started to emerge. (Roundtable Weekly, Sept. 5)
  • Interest rate cuts could provide a modest tailwind for CRE markets, although some property types remain under pressure.
  • Further reductions in borrowing costs into 2026 could support more robust valuations and transaction activity. (Multifamily Dive, Sept. 17)
  • At the 2025 C5 + CCIM Global Summit in Chicago this week, RER President & CEO Jeffrey DeBoer joined Shannon McGahn (Executive Vice President and Chief Advocacy Officer, National Association of REALTORS®) and Jef Conn (Industrial & Office Specialist, Coldwell Banker Commercial Capital Advisors) on a panel to discuss the bipartisan nature of the nation’s affordable housing crisis.
  • DeBoer emphasized the need for a construction visa program to expand the labor force and build more supply, along with policies such as YIMBY legislation, property conversion incentives, and permitting reforms to help address the crisis.

The Fed’s next rate decision is scheduled for Oct. 29, with the final FOMC meeting of the year set in early December.

Government Funding Deadline Looms as NFIP Nears Expiration; RER Hosts Town Hall

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Senate Democrats on Friday blocked a House-passed stopgap spending bill that would have funded federal agencies for seven weeks, setting the stage for a potential Oct. 1 government shutdown.

  • The measure failed on a 44-48 vote, with only Sen. John Fetterman (D-PA) joining Republicans in support of the proposal, which had cleared the House earlier in the day by a narrow 217-212 vote. (The Hill, Sept. 19)
  • Senate Majority Leader John Thune (R-S.D.) said the Senate will reconsider the vote when lawmakers return from recess. (Roll Call, Sept. 19)
  • Earlier in the week, House Republicans introduced their continuing resolution (CR) to keep federal agencies open through Nov. 21, while Democrats countered with a plan extending funding only until Oct. 31. (Punchbowl News, Sept. 18)
  • Lawmakers may not return until Sept. 29, leaving less than 48 hours to avert a shutdown. (Punchbowl News | PoliticoPro, Sept. 19)

Government Funding & CRE

  • The House GOP bill would also extend the National Flood Insurance Program (NFIP) until Nov. 21. Without congressional action, the NFIP will expire on Sept. 30. If approved, the House GOP’s proposal would mark the NFIP’s 34th short-term extension in eight years.
  • Lawmakers from both parties have long called for an overhaul, and signaled interest in pursuing longer-term reforms to the program.
  • Policymakers in both chambers have signaled interest in pursuing longer-term reforms to NFIP. Chair of the Senate Banking Securities, Insurance and Investment Subcommittee, Mike Rounds (R-SD) said he expects “some reforms that can occur” this fall to put the program on a stronger financial footing. (PoliticoPro, Sept. 18)
  • The rising cost of insurance premiums due to the growing number of billion-dollar natural disasters reinforces the importance of the NFIP.
  • The Real Estate Roundtable (RER) has long supported a sustainable, long-term NFIP reauthorization with appropriate reforms. A robust program is essential for residential markets, catastrophe insurance capacity, and the broader economy.
  • The funding bill would also allow the Department of Housing and Urban Development (HUD) to use available funds to prevent evictions of households served by the Tenant-Based Rental Assistance program. (PoliticoPro, Sept. 17)

RER Town Hall

  • RER hosted a virtual Town Hall this week, “How Today’s Political Climate Impacts Real Estate,” with Politico’s Jonathan Martin (Politics Bureau Chief and Senior Political Columnist)
  • The discussion was led by RER Chair Kathleen McCarthy (Global Co-Head of Blackstone Real Estate), RER President and CEO Jeffrey DeBoer, and RER policy staff.
  • Martin shared his outlook on the 2026 and 2028 elections, the messaging challenges facing both parties, and shifting party identities.
  • He cautioned that a short-term government shutdown remains “more likely than not” as both parties seek leverage over Medicaid cuts and health care tax credits.

RER members also engaged in policy discussions on a number of policy priorities, including the implementation of the OB3 Act, Section 899 “revenge tax” concerns, Opportunity Zones, clean energy tax incentives, housing finance reform, and the future of TRIA.

Congressional Democrats Reintroduce Bill to Tax Unrealized Gains

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Senate Finance Committee Ranking Member Ron Wyden (D-OR) introduced the bicameral Billionaires Income Tax Act this week with support from 20 Senate Democrats. The legislation mirrors the version first introduced by Sen. Wyden in 2023, and would tax the appreciation of wealthy individuals’ assets. Identical legislation was introduced in the House by Reps. Donald Beyer (D-VA) and Steve Cohen (D-TN). (PoliticoPro, Sept. 17)

Billionaires Income Tax Act (BITA)

  • Under BITA, tradable, liquid assets would be marked-to-market and taxed annually on their appreciation, while illiquid assets would be subject to a “deferral recapture” tax when sold—or if certain other currently nontaxable events occur, such as death, a transfer to a trust, or a like-kind exchange. (Bill text | Press release | One-pager, Sept. 17)
  • The bill would apply to taxpayers with more than $100 million in annual income or more than $1 billion in assets for at least three consecutive years. (PoliticoPro, Sept. 17)
  • The legislation is not limited to future appreciation of assets. It would also apply to accumulated, unrealized gains at the time of enactment. Tax on these built-in gains could be paid over five years.
  • Additional rules would govern unrealized losses, as well as assets held in partnerships.

Roundtable View      

  • Real Estate Roundtable (RER) President and CEO Jeffrey DeBoer said: “Taxing unrealized gains would upend over 100 years of federal taxation, require an unprecedented IRS intrusion into household finances, and create harmful unintended consequences. Deferring taxes until assets are sold supports entrepreneurs while encouraging long-term investment and productive risk-taking. This proposal lacks broad policy support, carries considerable risk, and should be rejected.”
  • Past attempts at wealth taxes in other countries have also collapsed—largely abandoned due to administrative problems, lack of public support, and minimal impact on income distribution (Roundtable Weekly, 2023)

Roundtable Spotlight

  • At the American College of Real Estate Lawyers (ACREL) Annual Meeting this week, RER’s Ryan McCormick (SVP & Counsel) and DeBoer highlighted how the One Big Beautiful Bill (OB3) Act supports jobs, economic growth, investment, and avoids harmful tax changes. They also discussed the nation’s housing shortage and the future of Fannie Mae and Freddie Mac.
  • Longtime and revered RER President’s Council member Jay Epstien received the Fred Lane Award for his lifetime of contributions to the real estate legal profession at the ACREL meeting.

McCormick was also a featured speaker on the Engineered Tax Services webinar this week to discuss the OB3 Act and its wide-ranging implications for commercial real estate, including permanent extensions of 100 percent expensing, Opportunity Zone incentives, affordable housing credits, and other key provisions. (Watch ETS Webinar)

RER and Coalition Urges TRIA Reauthorization

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The Coalition to Insure Against Terrorism (CIAT) submitted a letter this week to the House Financial Services Housing and Insurance Subcommittee ahead of its Sept. 17 hearing on “The Reauthorization of the Terrorism Risk Insurance Act of 2002 (TRIA).” The letter urged lawmakers to act well in advance of TRIA’s scheduled expiration on Dec. 31, 2027. (Letter, Sept. 15 | Watch Hearing)

Why It Matters

  • TRIA has been reauthorized four times—in 2005, 2007, 2015, and 2019—and is set to expire in 2027.
  • The coalition letter warned that letting the program lapse would trigger “a period of profound economic slowdown, posing a very real threat to our economic and homeland security.” (Letter, Sept. 15)
  • House Financial Services Housing and Insurance Subcommittee Chair Mike Flood (R-NE) said Wednesday he intends to propose a clean, eight-year reauthorization of TRIA. (PoliticoPro, Sept. 17 | Press Release, Sept. 17)
  • Without TRIA, businesses from real estate and banking to hospitality and sports, could face significant financing challenges if terrorism insurance becomes unavailable or unaffordable. (Letter, Sept. 15)
  • The program has never been triggered, but for nearly two decades has provided the commercial real estate industry with a crucial backstop against losses from external threats.
  • An RER survey cited in the letter found that more than $15 billion in property transactions stalled or were cancelled in the 14 months between 9/11 and TRIA’s passage, underscoring the economic damage caused by the absence of terrorism insurance.

Hearing Highlights

  • Members of the committee stressed the need to reauthorize TRIA, highlighting its role in sustaining a functioning insurance market and protecting the broader economy.
  • “TRIA’s value is not just in direct responses to terrorism events. The program makes it easier to have an operating market where entities can purchase insurance that covers terrorism risk, and a well-functioning insurance market makes it possible for entities of all kinds to purchase insurance against terrorism risks,” Subcommittee Chair Flood said.
  • House Financial Services Committee Chairman French Hill (R-AR) said, “It’s crucial we take the necessary steps to reauthorize TRIA in addition to enhancing the program’s operations to better protect our economy and strengthen our national security.” (Press Release, Sept. 17)
  • During the hearing, Rep. Ritchie Torres (D-NY) underscored the stakes, stating that without TRIA there would be no financing—or far less financing—of projects. “Without TRIA, there would be no operational terrorism risk insurance market, and without TRIA, few businesses in America could survive a catastrophic terrorist event,” Rep. Torres said. (Watch Hearing)
  • Michelle Sartain (Marsh McLennan), testified during the hearing that TRIA “has been a model public-private partnership,” remains essential for insuring against catastrophic risks, and warned that uncertainty around reauthorization would ripple through the economy, affecting hiring and investment. (Insurance Journal, Sept. 17)

Background on TRIA

  • Enacted in November 2002, TRIA was created in the wake of 9/11 to stabilize insurance markets after private insurers began excluding terrorism coverage from policies.
  • The program provides a system of shared public and private compensation for certain insured losses from a certified act of terrorism.
  • TRIA operates at virtually no cost to taxpayers, thanks to its recoupment mechanism, and continues to ensure market stability amid persistent threats.

RER’s Advocacy

  • Since 9/11, RER has been at the forefront of efforts to secure terrorism risk coverage for American businesses.
  • RER also helped establish CIAT, a broad coalition of commercial insurance consumers formed immediately after 9/11 to ensure that businesses could obtain comprehensive and affordable terrorism insurance. (CIAT Talking Points on TRIA Reauthorization)

RER will continue to work with CIAT and policymakers to ensure a long-term reauthorization of TRIA before its scheduled expiration in 2027.