Category: News

2021 Policy Agenda (entire agenda)

Intro

Tax Policy 

Capital & Credit

Energy & Climate

Infrastructure & Housing

Homeland Security

The Presidential Inaugural Committee has announced it is hosting a memorial to illuminate buildings in cities and towns across the country next Tuesday evening, as part of a series of online and virtual events for the Biden-Harris inauguration.  The building illumination is intended as a “national moment of unity and remembrance” in honor of the American people who have fallen to COVID-19.  (Inaugural Committee fact sheet and Building Owner Participation Form)

• The nationwide memorial to illuminate buildings will start at 5:30 p.m. EST on Tuesday, January 19, 2021. The lighting ceremony will then roll westward from time zone to time zone, taking place at 5:30 pm local time in each zone.
• The Inaugural Committee has requested support from Roundtable members to participate in the memorial to honor those who died from the coronavirus. Participation in the event is voluntary. 
• Building owners and managers willing to illuminate their assets are asked to complete this short Google docs form to be submitted to the Inaugural Committee.
• The Committee also requests that owners and managers who participate in the event record or photograph their building illuminations to share on social media platforms.
• Further questions can be emailed directly to the Presidential Inaugural Committee at publicengagement@bideninaugural.org.
• The ceremony will be timed with a lighting around the Lincoln Memorial Reflecting pool in Washington, D.C., and the ringing of bells in churches and towns nationwide to commemorate the moment of remembrance.

Roundtable members who opt to participate on January 19 are kindly requested to inform our staff by email (Duane Desiderio, Senior Vice President and Counsel, ddesiderio@rer.org) and (Abigail Grenadier, Communications Director, agrenadier@rer.org).  We would like to keep track of the building square footage participating in this voluntary event and our organization’s collective involvement.

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The Roundtable and 12 national real estate organizations this week congratulated President-elect Joe Biden and Vice President-elect Kamala Harris on their historic election and submitted detailed policy recommendations to the incoming administration in the areas of COVID-19 relief, sustainability, housing, immigration, tax policy, and infrastructure, as well as others.

• The industry’s Dec. 16 letter acknowledges the many economic and social challenges confronting the country as President-elect Biden and Vice President-elect Harris prepare to take office, including the national response to COVID-19. The letter and supporting policy memo were also sent to every congressional office on Capitol Hill.
• The economic impact of commercial real estate is far-reaching, wrote the organizations.  America’s commercial real estate is worth between $14.4 and $17 trillion, and directly supports 13.6 million jobs. The ownership and transfer of real estate generates over 70% of local tax revenue. Pension funds, schools, and charities have invested nearly $800 billion in real estate. 
• The submission describes how struggles caused by COVID-19 are affecting real estate-related workers and putting pressure on small businesses, financial institutions, property values, retirement savings, and local governments. At the same, time, the organizations noted how the real estate industry is contributing to the reopening process and is prepared to help lead the economic recovery. “We pledge the support, collaboration, and collective ‘on the ground’ experience of our members so that, together, we can get past the immediate crisis and continue building healthy communities for generations of Americans,” wrote the 13 organizations.  
• The organizations’ letter offers several recommendations for COVID-19 relief (direct relief, state and local fiscal assistance, rental assistance, liability safeguards, debt restructurings, and others) as well as recommendations aimed at long-term challenges (pandemic risk insurance, infrastructure investment, retrofitting aging buildings to optimize energy efficiency, housing affordability, immigration reform, etc.). The recommendations are then described in greater detail in the supporting policy memo accompanying the letter. 
• “We also recognize that the pandemic has magnified systemic inequalities, and are committed to ‘build back better’ in a manner that addresses the disproportionate hardships endured by minority and low-income households and communities from the fallout of COVID-19,” the organizations stated. 
• The letter emphasized that the industry is committed to a “nonpartisan approach to public policy” that is “focused on contributing data and fact-based analysis that improves policymakers’ understanding of how their decisions will affect real estate, jobs and communities, and the overall economy.” 

The industry’s policy agenda, and its anticipated initiatives with the new Administration and Congress, will be a focus on Jan. 26-27 at The Roundtable’s State of the Industry Meeting and Policy Advisory Committee Meetings (all virtual). 

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The need for commercial real estate companies to have greater access to Federal Reserve lending facilities during the ongoing pandemic was addressed during an August 7 hearing before the bipartisan Congressional Oversight Commission – a five-person panel tasked with monitoring the use of coronavirus aid funds.  (New York Times, August 8)

• The panel focused on the shortcomings of the Fed’s Main Street Lending Program (MSLP), a $600 billion loan facility established in March as part of the Coronavirus Aid, Relief and Economic Security (CARES) Act to assist mid-market businesses respond to the negative impact of COVID-19.

• The MSLP is administered by the Federal Reserve Bank of Boston, whose president, Eric Rosengren, testified before the Commission on the MSLP and other credit facilities.

• Rosengren explained the MSLP is structured to assist businesses that are too small to raise money by issuing bonds and stocks, yet too large to qualify for the Small Business Administration’s (SBA) Paycheck Protection Program loans. (AP, August 7)

• Banks who participate in the program must make loans for at least $250,000, with strict requirements, and loans cannot be approved for highly indebted companies. (Roundtable Weekly, August 7)

• Hotels that pursue loans using the Fed’s MSLP must adhere to restrictive criteria based on Earnings Before Interest, Taxes, Depreciation and Amortization (EBITDA).  (Reuters / Yahoo News, Aug 12)

• “This program is designed as a cash flow program, so it’s designed for a business that expects to be able to pay off the debt,” Rosengren said. (Roll Call, August 7)

MSLP and CRE

Rep. French Hill (R-AR), below, a member of the Commission, asked Rosengran if there are discussions at the Fed “to expand a different Main Street facility that would be more of an asset-based loan rather than a cash flow loan?”

• Rosengran responded, “I know there are discussions about asset-based financing and some of the difficulties experienced, for example, in commercial real estate. So, there have been ongoing discussions about this, but there is no term sheet that is imminent.” (Watch hearing video and read testimony)
• Another Commission member, Sen. Pat Toomey (R-PA), said, “I want to underscore a point that Congressman Hill raised … about considering asset based facilities. I think you’re very well aware there are some real challenges in the commercial mortgage backed security market right now, in particular, the hotel subset of the commercial mortgage backed sector is experiencing some real difficulties. Do you have any thoughts on whether we ought to stand up a facility specifically designed, it would be designed generally for the broad category of real estate I think and other categories that would be more suitable for an asset based lending than they are for an EBITDA constraint?”
• Rosengran answered, “Yes, so an asset program would differ from what we have for Main Street. Most of that type of lending has a much longer maturity than five years. So as though these are five-year loans with a balloon payment at the end of the five years, that’s probably not appropriate for example, for retail or for commercial real estate such as hotels. So the nature of that program would be quite different. I know there is work being done thinking about how asset based can be addressed, including through the SBA.”
• He added, “So I think there are a number of proposals that are being considered. I’m certainly aware that there are many concerns in the commercial real estate industry and those concerns will get even worse if the pandemic gets worse.”  (Watch hearing video and read testimony)

MSLP Revisions

Senate Banking Committee Chairman Mike Crapo (R-ID), below, and House Committee on Financial Services Ranking Member Patrick McHenry (R-NC) on August 10 wrote to Fed Chairman Jay Powell and Treasury Secretary Steven Mnuchin about utilizing the MSLP to support businesses and their employees struggling with the pandemic’s impact. 

• The congressional committee leaders proposed utilizing the remaining funds appropriated by Congress for the Exchange Stabilization Fund “to expand MSLP and support more businesses.”
• Sen. Crapo also submitted a letter to Treasury Secretary Mnuchin and Fed Chair Jay Powell encouraging the expansion the Main Street Lending Program (MSLP) by setting up an asset-based lending program and commercial real estate program.  (Sen. Crapo’s letter, July 31)
• Four other U.S. senators recently wrote to Mnuchin and Powell with several recommendations on reforming the Fed’s MSLP credit facilities.  (Senators’ letter, Aug. 4)

• “Many banks seem disinterested in the program because they either wish to retain more than 5 percent of a profitable loan or they have no interest in retaining any stake at all in an unprofitable loan,” according to Sens. Mike Braun (R-IN), John Cornyn (R-TX), Kelly Loeffler (R-GA) and Thom Tillis (R-NC).
• A coalition of nine real estate industry groups, including The Real Estate Roundtable, on July 21 submitted a set of recommendations to the Senate Banking Committee aimed at improving the Fed’s MSLP for commercial real estate owners and tenants.  (Real estate coalition letter,  July 21 and Roundtable Weekly,  July 24)

The Fed’s efforts to support commercial real estate businesses and their employees struggling with the pandemic – especially in the hospitality and retail sectors – will be a focus of discussion during The Roundtable’s September 22 Virtual Fall Meeting.

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