Category: News

Pandemic Aid, Biden Administration Agenda and Other National Policy Issues Addressed in Roundtable Discussions

Posted on by Trey Jackson

DC-JF-JD-2021-SOI-x475w

The Real Estate Roundtable’s 2021 State of the Industry (SOI) meeting this week featured discussions with three incoming Senate Committee chairs who oversee banking, energy, housing, and tax legislation – along with other national leaders on a wide range of policy matters. The Roundtable’s policy advisory committees also met virtually to discuss these matters as well as the Biden Administration’s COVID response initiatives, the prospects for legislating in a 50-50 Senate, and homeland security concerns in the aftermath of the January 6 attack on the Capitol. (Watch all SOI videos on The Roundtable’s YouTube Channel.)

  • Roundtable Chair Debra Cafaro (Chairman and CEO, Ventas, Inc.) launched the SOI meeting on Jan. 26, acknowledging the health, economic and equality crises that have engulfed the nation over the past year. (video)
  • Cafaro also emphasized how The Roundtable was one of the first industry groups to denounce the attack and suspend political support for any members of Congress not interested in seeking bipartisan solutions to the nation’s significant challenges. (Roundtable Weekly, January 15)
  • Cafaro was joined by Roundtable Chair-Elect John F. Fish (Chairman & CEO, SUFFOLK) and Roundtable President and CEO Jeffrey DeBoer (photo above) in announcing that the organization’s 2021 National Policy Agenda will soon address issues in the areas of tax, capital and credit, energy and climate, homeland security, infrastructure and housing.

Policy Issues & Featured Speakers

The SOI meeting attracted nearly 300 participants and included the following speakers: 

Senator Joe Manchin (D-WV)

  • Sen. Sherrod Brown (D-OH) – Incoming Chairman of the Senate Banking, Housing and Urban Affairs Committee – spoke about the national eviction moratorium and ensuring citizens have access to affordable housing (video). [Roundtable President and CEO testified before the Senate Banking Committee in Sept. 2020 about policy recommendations that could encourage a national recovery from the economic effects of the pandemic.]
  • Sen. Joe Manchin (D-WV), photo above – Incoming Chairman of the Senate Energy and Natural Resources Committee – is one of the key centrist Senators who is expected to play a significant role in forging bipartisan legislation in the 117th Congress, as the Biden Administration moves swiftly on its pandemic aid plan and clean energy initiatives to boost job creation. (video)
  • Sen. Ron Wyden (D-OR) – Incoming Chairman of the Senate Finance Committee – will have a principal role on Capitol Hill on tax, trade, and spending. He welcomed fact-based reports showing the link between real estate, the pandemic and tax policy. (video)
  • Dr. Scott Gottlieb – 23rd Commissioner of the U.S. Food and Drug Administration – spoke with Roundtable Chair Debra Cafaro on the emergence of vaccines, concerns about coronavirus variants, and the prospects for fuller re-opening of the economy.
  • Penny Pritzker – 38th Secretary of Commerce (2013-2017), Founder and Chairman of PSP Partners and former Roundtable Board Member – provided her insight on leadership, international trade agreement, the climate crisis and racial inequity. (video)
  • Steven Pearlstein – Business and Economics Columnist, The Washington Post – discussed the challenges ahead for bipartisan policymaking in a split Senate with The Roundtable’s Board of Directors, reflecting his recent column, “Five (somewhat) upbeat predictions for 2021.” (video)

Roundtable Policy Advisory Committees

SPAC x475w image 1-27-20

The Roundtable’s policy advisory committee meetings analyzed national issues impacting CRE in detail with the following high-level congressional and agency staff:

  • Research and Real Estate Capital Policy Advisory Committees (RECPAC)
    Rep. French Hill (R-AR) provided his insights on the 117th Congress from his perspective as a member of the House Financial Services Committee. Additionally, D. Michael Van Konynenburg (Eastdil Secured), Brian Kingston (Brookfield) and Michael Bilerman (Citi) provided their perspectives on the market cycle. (video)
  • Tax Policy Advisory Committee (TPAC)
    Tax legislative priorities affecting CRE were a focus of a discussion moderated by Russ Sullivan (Brownstein Hyatt Farber Schreck) with Tiffany Smith, chief tax counsel for Senate Finance Committee Democrats and Andrew Grossman, chief tax counsel for House Ways and Means Committee Democrats. (video)
  • Homeland Security Task Force (HSTF) and Risk Management Working Group (RMWG)
    This joint meeting was briefed on potential post-inauguration threats from a representative of the FBI’s Counterterrorism Division. Additionally, Brian Michael Jenkins, a senior adviser to the president of the RAND Corporation, addressed the attack on the U.S. Capitol and the implications for real estate.
  • Sustainability Policy Advisory Committee (SPAC), photo above
    U.S. Energy Information Administration speakers updated SPAC on the Commercial Building Energy Consumption Survey (CBECS), the only federal data that takes stock of U.S. commercial real estate. Environmental, Social, and Corporate Governance (ESG) trends were also discussed, as well as the need for voluntary federal standards to help unify a patchwork of state and local laws addressing buildings and their carbon footprint. (video)

Next on The Roundtable’s FY2021 meeting calendar is the Spring Meeting on April 20. This virtual meeting is restricted to Roundtable-level members only.

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Senate Finance Committee Approves Janet Yellen as Treasury Secretary; BisNow Webinar Features Roundtable’s DeBoer on Industry Policy Agenda and Biden Administration

Posted on by Trey Jackson

Janet Yellen during Senate Finance Committee confirmation hearing

The Senate Finance Committee on Jan. 22 voted unanimously to advance President Biden’s nomination of Janet Yellen for Treasury secretary to the full Senate for a vote. Yellen, who formerly served as chair of the Federal Reserve, would become the first woman to hold the position. (The Hill, Jan. 22) 

  • Yellen testified before the committee earlier this week that “the world has changed,” encouraged policymakers to “act big,” and addressed fiscal relief, potential tax increases and the growing budget deficit. (Bloomberg and Wall Street Journal, Jan. 19)
  • “Neither the President-elect, nor I, propose this relief package without an appreciation for the country’s debt burden,” she said. “But right now, with interest rates at historic lows, the smartest thing we can do is act big. In the long run, I believe the benefits will far outweigh the costs, especially if we care about helping people who have been struggling for a very long time.” (Yellen testimony, Jan. 19)
  • In follow-up written Q&A with the committee, Yellen addressed a wide variety of policy issues including tax policy and climate change. Among her answers in the document:

    “Both the President and I believe we can turn the threat of climate change into an opportunity to boost our economy and reinvigorate old and new industries to create high paying middle class jobs across America. President Biden has a comprehensive plan to invest in the United States, create a clean energy economy, and address the crisis of climate change. I am focused on the President’s agenda, including investments in the clean energy economy, to address climate change and create good paying jobs and energy efficiency technologies, as well as clean electricity standards that will achieve carbon-pollution-free electricity by 2035.”

  • Yellen also said she planned to start a new Treasury “hub” that would examine financial system risks arising from climate change and on related tax policy incentives, POLITICO’s Zachary Warmbrodt reports.
  • Sen. Ron Wyden (D-OR), who is poised to chair the tax-writing Senate Finance Committee, said in a statement after the hearing, “As we continue to deal with the worst economic crisis in a century, it’s critically important that she be leading the Treasury Department as soon as possible.” 

Roundtable’s DeBoer & Policy Priorities 

Jeffrey DeBoer, upper left, during Bisnow Webinar

Real Estate Roundtable President and CEO Jeffrey DeBoer commented in the media this week on the Biden Administration and policy priorities ahead.  

  • In Commercial Property Executive’s Jan. 22 article, Industry Responds as Biden Kicks Off Tenure (cpexecutive.com), DeBoer states, “There are many serious issues facing the nation, but job number one is winning the ongoing battle against the health and economic consequences of the pandemic.”  He added, “In addition, we expect robust debate and activity around housing availability, infrastructure and immigration reform and expanding opportunities for all Americans.”
    • The Roundtable and 12 national real estate organizations on Dec. 16, 2020 congratulated Joe Biden and Kamala Harris on their historic election and submitted detailed policy recommendations to the incoming administration on COVID-19 relief, sustainability, housing, immigration, tax policy infrastructure, and other policy issue areas. (Roundtable Weekly, Dec. 18, 2020)
      • The industry letter acknowledges the many economic and social challenges confronting the country and the Biden Administration, including the national response to COVID-19. The letter and supporting policy memo were also sent to every congressional office on Capitol Hill.
      • DeBoer also participated in Jan. 19 BisNow webinar with Roundtable Member Steven Witkoff, Chairman & Chief Executive Officer of Witkoff, and W. Edward (Ed) Walter – Global Chief Executive Officer of the Urban Land Institute and current co-chair of The Roundtable’s Research Committee – that focused on future economic stimulus proposals from the Biden Administration and industry priorities.
      • DeBoer said, “What Biden has suggested already is very positive. We need to go bold and big. So when we look at this next wave of legislation, we’re going to be looking for how does it distribute the vaccine because until that occurs it is going to be difficult for cities and states and businesses to regain their footing. We have also worked hard on the concept of rent assistance and we have urged that impacted businesses also be able to get some rental assistance.”
      • He added, “We are also very hopeful that in the next bill we can get some additional clarity on liability concerns for businesses. And going forward, we’re concerned that for leasing and refinancing, there may be a need to have a program along the lines of what was established after 9-11 for terrorism insurance. There may be a need for a pandemic risk insurance federal program that would allow people to help mitigate the risk of a future pandemic and that insurance would be available to any kind of business.” 

      The Roundtable’s policy agenda and the Biden Administration’s proposals will be discussed during both The Roundtable’s business meeting and policy advisory committee meetings during the organization’s State of the Industry Meeting on Jan. 26-27 (all virtual).

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      Roundtable Members Participate in Nationwide Illumination of Buildings to Honor COVID-19 Victims

      Posted on by Trey Jackson

      Denver's City and County Building was lit as part of the

      Real Estate Roundtable members on Jan. 19 joined other building owners and operators around the nation to illuminate private and public buildings in a “national moment of unity and remembrance” to honor those Americans who have fallen to COVID-19. (Photo: Denver’s City and County Building, credit: Patricia Duncan )

      • Dozens of Roundtable member organizations responded to a request for participation from the Presidential Inaugural Committee.  Their building illumination efforts coincided with a lighting ceremony 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.
      • The Roundtable on Jan. 19 issued the following statement about the memorial event, which was held as part of the inauguration of President Joseph R. Biden and Vice President Kamala D. Harris:
        • “The Real Estate Roundtable encourages all Americans to support the peaceful transfer of power to the new Biden-Harris Administration, and urges that the 117th Congress unify across party lines to address the critical health, economic and social challenges now facing the American people. 
        • “This evening, in association with the inauguration of the Biden-Harris administration, our nation will recognize the nearly 400,000 fellow citizens who have died over the past year due to COVID-19.” 
        • “Building owners are proud to join national policy makers, religious leaders, business figures and others commemorating tonight’s event by lighting many of our buildings nationwide as part of the #COVIDMemorial.”
        • “The Roundtable is committed to work positively with our elected officials to help our nation stabilize and rebuild from the severe hardships caused by the pandemic — and to do so in a manner that affirms and more fully realizes the ideals of equality and opportunity upon which our great nation is founded.”

      Photo compilations of illuminated buildings in towns and cities nationwide who participated in the tribute were posted on media outlets such as Axios, the San Jose, CA publication The Mercury News and ABC News.

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      Inauguration Activities to Include Nationwide Illumination of Buildings to Honor COVID-19 Victims; Roundtable Members Asked to Participate

      Posted on by Trey Jackson

      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 Real Estate Roundtable Suspends Political Support to Members of Congress Who Objected to Electoral College Certification

      Posted on by Trey Jackson

      The Real Estate Roundtable announced on Tuesday that it “will suspend all political contributions to Members of Congress whose votes attempted to subvert the validly expressed will of the American people in selecting Joe Biden and Kamala Harris as the nation’s next president and vice president.” (Roundtable statement, Jan. 12)

      • The Jan. 12 statement continued, “In the time since this armed insurrection, we have become even more appalled and our anger is amplified by the dismissive reaction of many of our national leaders, beginning with the votes cast by a band of Senators and Representatives who continue to fuel baseless claims of election fraud by refusing to certify the clear results of last November’s election.”
      • The Roundtable’s statement suspending political support follows its denunciation last week of the January 6 attack on the Capitol and its commitment to “support[ ] efforts to bring about more measured tone and civility in policy debates at all levels of government, and policy actions that are balanced and sustainable.”
      • In the Jan. 8 statement, Real Estate Roundtable President and CEO Jeffrey DeBoer also noted, “We will continue to work with policymakers representing the full spectrum of political views. However, we do not intend to help advance initiatives proposed by policy makers uninterested in seeking bipartisan consensus.” (Roundtable Weekly, Jan. 8) 
      • GlobeSt reported on The Roundtable’s suspension of certain political contributions, noting that “the industry—as well as the larger business community—has not only voiced disgust with what happened but backed those sentiments with hard actions.”
      • CoStar reported, “While Trump’s business is now a focus of the fallout, the politically focused repercussions are still coming. The Washington., D.C.-based Real Estate Roundtable, commercial real estate’s most prominent national lobbying group, suspended all political contributions to members of Congress” who objected to certifying the vote of the Electoral College.

      Industry and Private Sector Response

      • According to The Real Deal, (TRD) Nareit stated, “As a result of these recent events… Nareit’s political action committee, REITPAC, will immediately suspend political contributions to all members of Congress who voted to deny certification of electoral votes cast by the Electoral College.”
      • TRD also reported that the National Multifamily Housing Council (NMHC) stated it has paused all PAC disbursements, not only those connected with legislators who objected to the electoral votes and that NMHC added, “We will undertake a thorough review of our strategy for the 117th Congress.”
      • The Mortgage Bankers Association told the publication, “MBA has decided to pause disbursements from its political action committee, MORPAC, and will undertake a careful review with our member leadership of our giving strategies for the 117th Congress.” (The Real Deal, Jan. 15)
      • International Council of Shopping Centers (ICSC) CEO Tom McGee announced on Jan. 11 that the organization will be “suspending all ICSC PAC donations for the next three months.” McGee stated that “during this historically challenging period…the focus of politicians should be on governing and uniting our nation, not campaigning and raising money.”
      • The National Association of REALTORS (NAR) on Jan. 6 stated, “We urge for calm and fully support the U.S. Capitol Police and the National Guard to restore safety to the city of Washington, D.C.”  On Jan, 12, The Hill reported that NAR “paused its federal political disbursements and will monitor events in Washington in the days and weeks ahead.”
      • Cushman & Wakefield told The Washington Post this week, “Cushman & Wakefield has made the decision to no longer do business with The Trump Organization.”
      • Axios (Jan. 14) summarized the corporations that have “cut off political donations after the Capitol siege – including Marriott International, which will “pause donations ‘to those who voted against certification of the election.’”

      The repercussions of the political transition and the industry’s 2021 policy agenda will be a focus of discussion during The Roundtable’s Jan. 26-27 State of the Industry Meeting (virtual attendance).

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      Mob Storms Capitol as Congress Certifies Electoral College Vote; Roundtable Denounces Violence, Urges Unity

      Posted on by Trey Jackson

      Capitol Building Stormed 1-6-21 image

      The violent mob attack on the U.S. Capitol Jan. 6 by pro-Trump supporters as Congress debated the Electoral College’s final votes shook the nation to its core this week, resulting in Democratic leadership calling for a second impeachment proceeding or invocation of the 25th amendment to immediately remove the president, whose term expires on Jan. 20. 

      • Real Estate Roundtable President and CEO Jeffrey DeBoer issued the following statement:
      • “The Real Estate Roundtable strongly denounces the armed violent protestors, and their baseless election claims, who stormed the U.S. Capitol this week. The mob chaos was contrived to inflict great damage on our democracy. A member of the Capitol Hill police died bravely defending others against the attack. Thankfully, democracy again defeated anarchy.
      • “Those involved in plotting, acquiescing or participating in this despicable act are not patriots. They are violent lawbreakers and must be treated as such. This chaotic, seditious mob also could have inflicted serious damage to America’s fight against the deadly pandemic – a crisis that has already taken over 400,000 lives and caused enormous economic hardships.
      • “As we all continue to work to overcome the challenges of the pandemic we must also unify to make sure that this week’s violence is not repeated. The Real Estate Roundtable pledges to do its part. We commit to supporting efforts to bring about more measured tone and civility in policy debates at all levels of government, and policy actions that are balanced and sustainable. We intend to continue to analyze policy based on its benefit to jobs, community and opportunity. We will continue to work with policymakers representing the full spectrum of political views. However, we do not intend to help advance initiatives proposed by policy makers uninterested in seeking bipartisan consensus,” DeBoer said. 
      • Congress certified the Electoral College vote results hours after the storming of the Capitol, and planning for the Jan. 20 inauguration of President-elect Joe Biden and Vice President-elect Kamala Harris is underway.  
      • The Capitol has not been attacked since 1814 when British troops burned federal buildings in Washington, D.C. during the War of 1812.

      The Roundtable’s State of the Industry Business Meeting and Policy Advisory Committee Meetings will address the ramifications of the political transition on Jan. 26-27 (all meetings will be held virtually). 

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      Congress Passes Pandemic Relief Aid and FY’2021 Funding in Overwhelmingly Bipartisan Fashion; “Omnibus” Includes Important Measures for CRE

      Posted on by Trey Jackson

      U.S. Capitol Dome with flag

      Congress passed a multi-trillion “omnibus” bill Dec. 21 that provides approximately $900 billion in coronavirus relief, as well as $1.4 trillion to fund government operations through Sept. 30. (Text of the 5,550-plus page bill )

      • The legislation is the culmination of months of bipartisan negotiations to further stimulate the COVID-era economy. It will also keep the federal government operational for the rest of the current fiscal year. The Senate approved the legislation on a 92-6 vote, and the House on a 359-53 vote. 

      • “The size of the deal approximates the 2009 stimulus act that Congress passed at the beginning of the Obama administration – and sits on top of the much larger stimulus bill” known as the CARES Act, the $2.2 trillion legislation that President Trump signed last spring.  (New York Times editorial (Dec. 20). See also Roundtable Weekly, March 27) 
      • “The COVID-19 relief package is welcome news to help America’s families, businesses, and communities cope with the pandemic in the midst of the holiday season,” said Roundtable President and CEO Jeffrey D. DeBoer. “With vaccinations underway, this bipartisan package provides hope for a robust economic recovery in 2021 – and is a bridge for the real estate industry to work with President-elect Biden and Vice President-elect Harris on additional measures to push health and economic solutions forward.”  

      • A broad coalition of national real estate organizations endorsed many of the components included in the emergency COVID measure, through a Dec. 16 letter and supporting policy memo sent to the Biden-Harris transition team. (Roundtable Weekly, Dec. 18)  These include direct assistance to families and workers in the form of “stimulus checks” and expanded unemployment benefits; funding for states to distribute coronavirus vaccines; a new round of Paycheck Protection Program (PPP) loans for qualifying small businesses; and an emergency assistance fund to help households that have suffered economic hardship during the pandemic meet their monthly rent and utility bill obligations. 

      • “While there remains much work to do in the coming weeks and months, this effort is clearly a step in the right direction and will come as welcome news for so many households facing financial distress,” said National Multifamily Housing Council President Doug Bibby, and National Apartment Association President and CEO Bob Pinnegar, in a joint statement.  “We are heartened that the legislation includes such critical resources that will allow those impacted by COVID and resulting economic stress to meet their financial obligations, including rent.”     

      Summaries provided by various Congressional offices regarding the $900 billion COVID-19 relief package include:

      Matters of particular interest to the real estate sector are summarized below.  Additionally, a Roundtable summary PDF can be downloaded.

      Direct relief to families, individuals, and the unemployed: $286 billion

      • “Stimulus checks”: $166 billion
        • $600 per individual earning up to $75K per year ($1200 under CARES Act)
        • $1200 per couple earning up to $150K per year 
        • $600 for each dependent child
        • For example, family of four receives $2400 assistance

      • Additional Unemployment Benefits: $120 billion
        • $300 boost in weekly unemployment insurance to supplement existing state and federal unemployment benefits (CARES Act provided $600/week boost)
        • From December 26, 2020 until March 14, 2021 
        • Available to “gig” workers and the self-employed
      Paycheck Protection Program (PPP) “Round 2”: $284.5 billion
      • Extends PPP through March 31, 2020
      • Borrower eligibility more limited than CARES Act “Round 1.”  Small business must have:
        • 300 or fewer employees, and
        • 25% revenue loss for any quarter in 2020 (compared to same quarter in 2019)
        • 501(c)(6) organizations now eligible – but not lobbying organizations (501(c)(3)s)
      • Loan amount is generally 2.5-times payroll (same as CARES Act) – with max loan amount of $2 million (CARES Act was $5 million)
        • Loan amount formula is increased to 3.5-times payroll for qualifying small businesses in the restaurant and hospitality industries (NAICS Code 72)
      • Round 2 borrower must have exhausted initial Round 1 PPP loan
      • Expedited forgiveness for loans up to $150K 
      • “60/40 Rule” remains in effect.  That is, no more than 40% of loan proceeds can be used for rent and other non-payroll items.
      • Expanded “allowable uses” for Round 2 PPP loans.
        • COVID-related expenses like PPE purchases, indoor air quality improvements, workplace protection measures
        • Repair property damage from recent social unrest
        • Costs associated with outdoor dining
        • Round 1 allowable uses still apply: payroll, benefits, rent, mortgage, utilities
      • “Passive real estate” remains ineligible for PPP loans.  New law codifies SBA’s “ineligibility rule” at 13 CFR 120.110 for purposes of “passive real estate.”
      • Codifies that “publicly traded companies” are prohibited from accessing PPP loans 
      • PPP and Tax Issues:
        • Forgiven PPP loans are not treated as taxable income
        • Business expenses paid with forgiven PPP loans are tax deductible (a reversal of Treasury guidance and retroactive to enactment of the CARES Act in March)
      COVID Vaccine Distribution, Testing, Tracing: $69 Billion. Includes – 
      • $9 billion for CDC and states to distribute vaccines
      • $22 billion directly to states for testing, tracing, and “COVID mitigation” 

      Transportation Assistance: $45 billion. Includes – 

      • $15 billion: Airline workers
      • $14 billion:  Mass transit agencies
      • $10 billion: State highway agencies
      • $2 billion: Airports and airport concessionaires
      • $1 billion: Amtrak 

      Residential Rent Assistance, Eviction Moratorium: $25 billion

      • CDC’s current federal eviction moratorium extended one month (through Jan 31, 2021)
      • Funds available through December 31, 2021
      • Covers household rent past due, coming due, and utility bills
        • Assistance not to exceed 12 months of payments, with a limit up to three months for prospective rent.  Household can apply for additional assistance depending on availability of funds.
      • States/localities receive “grants” from U.S. Treasury, apportioned based on Social Security formula.
      • Households apply to state/local for assistance.  Landlords can help household apply. 
      • Assistance paid directly to landlord.
      • Households at 50% AMI are “prioritized” for assistance; no household over 80% AMI can receive assistance.
      • Renter must have experienced “financial hardship” due to COVID, or is “at risk” of homelessness. 
      • State/local grantee only considers the household’s monthly income at the time the household applies for assistance, or total income for calendar year 2020. 
      • State/local grantee “shall ensure” “to the extent feasible” that any emergency rental assistance here does not duplicate other Federal rent assistance (e.g., Section 8)
      • Emergency rental assistance is not income for tax purposes.
      • No provisions regarding allowable forbearance on mortgage payments by property owner (as in CARES Act).
       

      Shuttered Theaters and Live Venues: $15 billion 

      • Small Business Administration grants available to eligible live venues, independent movie theaters, museums
      • Maximum grant amount is $10 million
       

      Unwinding the Federal Reserve’s Emergency Lending Facilities

      • Winds down the 13(3) emergency lending facilities created under the CARES Act (the Main Street Lending Program for mid-size businesses, and three other facilities aimed to boost purchases of municipal and corporate bonds)
      • These 13(3) program cannot be re-opened or duplicated in the future by the Fed without Congressional authorization
      • $429 billion in unspent CARES Act funds intended for Fed facilities repurposed to offset the overall $900B package
      • Fed retains more flexibility over the Term Asset-Backed Securities Loan Facility (TALF), initially launched during the 08-09 financial crisis to jumpstart the economy and increase banks’ liquidity. TALF supports the issuance of CMBS and other asset-backed debt securities. This bill closes TALF, but the Fed can re-start this facility in the future as emergency economic conditions may arise.
      • More details on the cessation of the CARES Act 13(3) programs as reported in The Hill (Dec. 20). 
       

      Real Estate-Related Tax Relief and Tax Extenders

      • Reduces the cost recovery period for residential rental property placed in service before 2018 to 30 years under the alternative depreciation system (relevant to owners of multifamily housing who elect out of the new TCJA limits on the deductibility of business interest)
      • Minimum 4% credit amount for low-income housing tax credit projects that involve the rehabilitation and renovation of affordable housing (in recent years, the 10-year credit for qualifying projects has fluctuated between 3.15% and 3.97%)  
      • Temporary reinstatement of the full 100% deduction for business meals expenses (food and beverages) in 2021 and 2022
      • 6-month extension and expansion of the employee retention tax credit for businesses that retain their employees despite government-ordered shutdowns or steep declines in business revenue (>20%) 
      • Permanent extension of the enhanced deduction for energy-efficient commercial buildings (section 179D)
      • 5 year extension of the new markets tax credit, tax incentives for Empowerment Zones, and the tax exclusion for mortgage debt forgiveness on a principal residence
      • 2-year extension of the tax credit for residential solar property and other residential renewable energy improvements tax (section 25D)
      • 1-year extension of the $2,000 tax credit new energy efficient homes (section 45L), the deductibility of mortgage insurance premiums, and the tax credit for energy efficient improvements (e.g., windows, insulation, roofing, doors) to owner-occupied homes (section 25C)
       

      Troubled Debt Restructurings (TDRs)

      • CARES Act’s TDR provisions extended until January 1, 2022. (ABA Banking Journal, Dec. 21)
      • Extension provides an additional year of relief from accounting and disclosure requirements on loan modifications made in response to the COVID-19 pandemic.
         
      • The Roundtable and other real estate groups recently requested an extension to the TDR relief period  “to offer prudent relief to commercial real estate owners who have been acutely affected by the pandemic.” (Roundtable Weekly, Nov. 13)
       

      What’s Not Included in the $900 billion package 

      • Liability protections for businesses, non-profits, schools, hospitals
      • Federal aid to state and local governments for general revenue shortfalls (but aid for vaccine distribution provided as noted above) 
       

      Omnibus Appropriations Bill for FY 2021

      • $1.4 trillion in federal spending through end of FY’2021 (Sept. 30, 2021)
      • EB-5 Regional Center investment visa program extended until June 30, 2021 – with no legislative reforms at this time

      The omnibus and its impact on The Roundtable’s 2021 policy agenda will be a focus of discussion during The Roundtable’s State of the Industry Meeting and Policy Advisory Committee Meetings Jan. 26-27 (all virtual).

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      Real Estate Industry Congratulates Incoming Biden Administration, Offers Policy Recommendations

      Posted on by Trey Jackson

      13 real estate groups - logos

      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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      Roundtable’s Q4 Sentiment Index Shows CRE Execs Optimistic Despite Serious Market Challenges; Walker Webcast Focuses on the Future of Urban Real Estate

      Posted on by Trey Jackson

      Commercial real estate executives expressed a modest increase in optimism about market conditions despite serious COVID-related challenges, according to The Real Estate Roundtable’s Q4 Economic Sentiment Index released this week. (Roundtable news release, Dec. 2)

      • A majority of respondents to the survey also noted that general conditions one year from now will be either “somewhat better” or “much better” than today. 
      • “Nearly every sector of the commercial real estate industry is facing serious economic challenges due to the overall impact of the pandemic. High unemployment, closed businesses, travel reductions and more have ripped into otherwise healthy real estate portfolios, creating challenges for all building owners in meeting their payroll, utility, tax and debt service obligations. Overall industry low leverage, general market balance, and functioning capital markets are positive influences that – when coupled with growing good news regarding vaccines – results in an increased optimism on part of industry leaders,” said Real Estate Roundtable President and CEO Jeffrey DeBoer. 
      • DeBoer also said,  “That optimism is dependent however on urgently-needed additional COVID relief from Washington and on the rapid testing and availability of effective vaccines. Federal lawmakers and regulators must support further assistance to bridge people and businesses into a post-COVID economy. Help is needed quickly for local governmental budgets, as well as for people and businesses negatively economically impacted by the pandemic. And some protection from unnecessary lawsuits must be provided to businesses to spur a more robust transition back to workplaces. ” 

      The Roundtable’s Q4 Sentiment Index topline findings include:

      • The Sentiment Index registered a score of 44, an increase of two points from the third quarter of 2020. Respondents continued to express optimism about future conditions, and many noted increasingly positive trends in their own portfolios. Participants from the hospitality and retail sectors were understandably less optimistic, but felt market dynamics were strong enough that successful recoveries were possible.
      • Respondents referenced stronger markets for industrial and multifamily properties, while retail and hospitality properties were perceived as challenging in this environment. Dynamics in the office sector remain uncertain for most participants as work from home policies have created an uncertain future operating environment.
      • Lower leverage and continued forbearance have combined to allow owners to retain their positions, despite distress within their portfolios. As a result, owners are resistant to realizing discounted asset prices while buyers are seeking discounts as steep as 30% within the hospitality industry.
      • Most respondents cited accessible capital markets for high quality assets, and an increase in debt as well as equity availability. Many also noted the real estate market in general has lower levels of leverage than seen in the last downturn.

      Future of Urban Real Estate

      Walker Webcast with Mark Parrell and Owen Thomas image

      On this week’s Walker Webcast, Roundtable Member Willy Walker (Chairman & CEO, Walker & Dunlop) discussed the pandemic’s impact on urban centers with Roundtable Board Member Owen Thomas (CEO, Boston Properties) and Roundtable Member Mark J. Parrell (President & CEO, Equity Residential Investments). 

      • Thomas commented, “It’s all about the virus. CEOs increasingly are understanding the problems with all remote work. Cultures are getting stretched and it is difficult to do more creative and strategic work, to procure new customers when everyone is working remotely. Companies want to get their employees back to work but companies are also very concerned about liability. What’s going to change all that around is health security.”
      • He added, “We have to get people back to the offices, back to the big cities for the overall economy to recover.”
      • Parrell noted, “When we think about our urban centers, there are places like New York that have been around 400 years and they’ve been resilient over time. (During) the last two decades in New York, up to the pandemic, the quality of life improved so much. These cities are capable of recovery, but good leadership is required. It will be very important that these cities be led by both public and private minded individuals who, like the Partnership for New York for example, are trying to put the city back together and on its feet. Once the cities re-energize, renters will return.”
      • Parrell added, “I do think there’s going to be a migration back into city centers, based initially on price and on activation as the vaccine gets broadly distributed.”

      The pandemic’s ongoing impact on CRE and the policy response will be a focus of discussion during The Roundtable’s virtual State of the Industry Business Meeting and policy committee advisory committee meetings on January 27-28, 2021.

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      Broad Business Coalition to Seek National Program Aimed at Limiting Future Impact of Major Economic Interruptions, Including Pandemics

      Posted on by Trey Jackson

      The economic damage from future business interruption events – such as pandemics and other national emergencies – needs to be limited and managed with a new national business continuity insurance program, according to a broad business coalition launched this week that represents more than two dozen industries and over 50 million workers.

      • The Business Continuity Coalition (BCC), which includes The Real Estate Roundtable, announced on Oct. 28 that it aims to develop a public/private business continuity insurance program with policymakers and other stakeholders. Such a program would enable employers, in the event of a government-ordered shutdown, to keep payrolls and supply chains intact; help limit job losses and furloughs; reduce stress on the financial system; and speed economic recovery when government-imposed limitations on operations are lifted. (BCC launch news release)
      • The BCC membership is comprised of organizations from the hospitality, restaurant, entertainment, gaming, communications, and broadcasting industries, as well as the apartment, healthcare, industrial, office, and retail real estate sectors. (See full list of BCC members)
      • Roundtable President and CEO Jeffrey DeBoer commented, “The need for a future national program that supports readily available business continuity insurance is clearly needed as the American business community, including commercial real estate, continues to adapt to the economic damage brought on by the pandemic.”
      • He added, “Businesses are making the health of workers and customers their top priority as they face interruptions, closures and attempts at reopening. The Business Continuity Coalition will work with lawmakers in applying lessons learned from present challenges toward future solutions so that the nation can collectively bridge any future economic interruption gap with the support of a congressionally-approved national program.”

      Nov. 19 Hearing on Pandemic Insurance

      Rep. Steve Stivers remote interview

      DeBoer on Sept. 25 discussed prospects for developing and enacting a federal pandemic risk-business continuity insurance program with Rep. Steve Stivers (R-OH), above, in a remote interview.  (Video of the discussion)

      • “We’ve seen business interruption insurance not being willing to cover any pandemics. I think you’re going to start to see lenders … requiring some type of pandemic coverage in their loan covenants in the coming years” Stivers said.
      • He added, “I think we need to make sure that if this ever happens again and the government shuts down the economy, [Congress] holds people harmless and businesses harmless in the future.” (Video of the discussion)
      • Carolyn B. Maloney (D-NY), who also serves on the subcommittee, said, “Congress needs to be proactive in helping businesses protect themselves from economic losses as a result of pandemics, which, as we’ve seen, can be devastating to businesses of all sizes.” (BCC)
      • The subcommittee played a key role in last year’s seven-year extension of the Terrorism Risk Insurance Act (TRIA).
      • According to the BCC, there are a number of successful models that can provide guidance in structuring a business continuity insurance program. Among them are TRIA, originally enacted following the 9/11 attacks and the War Damage Corporation developed during World War II. (BCC news release, Oct. 28)

      BCC Steering committee members include the American Resort Development Association, Building Owners and Managers Association, Fox Corporation, Independent Film & Television Alliance, International Council of Shopping Centers, Motion Picture Association, NAIOP – Commercial Real Estate Development Association, Nareit, National Association of Realtors, National Restaurant Association, Sony Pictures Entertainment, The Real Estate Roundtable, and ViacomCBS.

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