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California Governor Gavin Newsom (D) on October 9 signed into law a statewide rent cap of 5 percent plus inflation, along with enhanced tenant eviction protections. California is now the third state in the nation – amid a growing list of other jurisdictions – to enact rent control laws in an attempt to address housing affordability problems.

The Treasury Department on Monday released proposed regulations to clarify the tax consequences of replacing the expiring London Inter-bank Offered Rate (LIBOR) in existing financial contracts, including real estate loans. The proposed rules largely align with Roundtable recommendations submitted over the summer.

Final regulations released by the Treasury Department last Friday and effective October 9 provide new tax guidance on the allocation of liabilities between partners in a real estate partnership. The new rules bring to a conclusion a regulatory project that started over six years ago.

A draft bill to reauthorize the Terrorism Risk Insurance Act (TRIA) for 10 years is expected to be the focus of next week’s House Financial Services Committee hearing “Protecting America: The Reauthorization of the Terrorism Risk Insurance Program.”

Societal trends and public policy issues affecting commercial real estate are featured in an Oct. 1 interview with Roundtable President and CEO Jeffrey DeBoer (left in photo above) during an episode of the podcast, “Through The Noise.”

The Real Estate Roundtable and more than 150 national trade associations urged Congress this week to reauthorize the Highway Trust Fund – the nation’s primary source for road and mass transit funds – ahead of its September 30, 2020 expiration.

The Trump Administration took a key step on Sept. 30 to release Fannie Mae and Freddie Mac from conservatorship by allowing them to retain a total of $45 billion in earnings annually.

House Financial Services Committee Chairwoman Maxine Waters (D-CA) yesterday announced an Oct. 16 subcommittee hearing that will focus on “Protecting America: The Reauthorization of the Terrorism Risk Insurance Program.”

A “Continuing Resolution” (CR) to fund the government at current levels through November 21 was approved by the Senate yesterday after House passage last week, sending the stopgap measure to President Trump for his signature. A senior White House official said President Trump will sign the CR, which avoids the threat of a government shutdown on October 1, the start of the government’s fiscal year. The measure includes funding for programs of importance to commercial real estate, including the EB-5 Immigrant Investor Regional Center Program and National Flood Insurance Program. (BGov, Sept. 26 and Roll Call, Sept. 23)

The Senate Energy and Natural Resources (ENR) Committee passed a bill on Wednesday that emphasizes voluntary measures and incentives to drive energy efficiency improvements in U.S. buildings, manufacturing, and other economic sectors. • The Energy Savings and Industrial Competitiveness (ESIC) Act (S. 2137) – sponsored by Senators Rob Portman (R-OH) and Jeanne Shaheen (D-NH) and long endorsed by The Real Estate Roundtable – was advanced by the panel, along with several other energy bills.

The House of Representatives on Sept. 11 passed the Secure and Fair Enforcement (SAFE) Banking Act [H.R. 1595 (116)] – a Roundtable-supported bill that would allow federally regulated banks to provide mortgage and financial services to state-licensed, cannabis-related businesses (“CRBs”) without the threat of federal penalties. (Wall Street Journal, Sept. 25) • The SAFE Banking Act would also provide protection from the threat of federal enforcement action for real estate owners, law firms and other businesses that provide services to state-approved CRBs.

A broad business coalition urged Congress in a September 17 letter to swiftly to pass a long-term reauthorization of the Terrorism Risk Insurance Act (TRIA), which is currently set to expire at the end of 2020.

The Treasury Department Treasury yesterday issued proposed regulations to comprehensively implement the Foreign Investment Risk Review Modernization Act of 2018 (FIRRMA), which seeks to more closely scrutinize certain investments and real estate transactions potentially affecting national security.

The Roundtable on August 21 wrote to Treasury Secretary Steven Mnuchin requesting regulatory relief from existing tax accounting rules that unfairly accelerate federal income tax liability for new condominium construction. • Current condo tax accounting rules require multifamily developers of condominium buildings with five or more residential units to recognize income and pay tax on their expected profit as construction is ongoing — well before pre-sale transactions are closed and full payment is due from the buyer. The existing rules create a mismatch of cash flow and tax liability. Home builders of single-family homes, townhouses and row houses are not subject to this accounting rule restriction.

California lawmakers passed legislation (AB 1482) September 11 that imposes a statewide cap limiting annual rent increases to 5% after inflation – the latest measure from a growing list of jurisdictions seeking to address housing affordability though rent regulations. California Governor Gavin Newsom (D) has said he will sign the bill. (New York Times, Sept. 11 and NMHC, Sept. 12) • In a state of nearly 40 million people, California’s rent control measure could affect an estimated 8 million residents of rental homes and apartments. (Realtor Magazine, Sept. 12). The 5% rent increase cap would not apply to housing built within the last 15 years or to single-family homes that are not corporate-owned.

The Senate’s Energy Subcommittee on Wednesday held a hearing that considered bipartisan legislation that would help further advance energy efficiency in U.S. buildings without federal regulations but through data-driven, voluntary measures. • The Senate panel assessed the Energy Savings and Industrial Competiveness (ESIC) Act (S. 2137), co-sponsored by Senators Rob Portman (R-OH) and Jeanne Shaheen (D-NH), along with nine other energy policy bills at the subcommittee’s Wednesday hearing. The Roundtable is a strong supporter of the Portman-Shaheen bill

On Thursday, Senate Finance Committee Ranking Member Ron Wyden (D-OR) presented and released a detailed white paper outlining his plan to reform the taxation of capital gains. (News Conference Video, Center for American Progress Action Fund, Sept. 12) • Entitled “Treat Wealth Like Wages,” the proposal is billed by the top Democratic tax-writer in the Senate as “a plan to fix our broken tax code, ensure the wealthy pay their fair share, and protect Social Security.” Sen. Wyden’s proposal would end the preferred tax rate for capital gains and impose annual mark-to-market taxation of capital assets for taxpayers above certain income thresholds.

The Senate Banking Committee's September 10 hearing on "Housing Finance Reform: Next Steps" focused on the Trump Administration's efforts to reform the U.S. housing finance system, including their proposal to overhaul the Government-Sponsored Enterprises (GSEs) Fannie Mae and Freddie Mac. Treasury Secretary Steven Mnuchin testified before the committee about the Administration's Housing Reform Plan released last week to revamp and recapitalize the GSEs before releasing them from conservatorship. The Administration’s goal is to reduce the federal government’s footprint in housing finance, increase the role of the private sector and private capital in the market and, eventually, return Fannie Mae and Freddie Mac to private shareholder ownership. Mnuchin testified that if Congress fails to act, the Administration will pursue an agreement with the GSEs' regulator, the Federal Housing Finance Agency (FHFA) to change the terms of the government's bailout agreements reached 11 years ago.

Lawmakers returned to Washington this week for their post-election “lame duck” session, facing a Dec. 7 government funding deadline that threatens a partial government shutdown.

Roundtable's DeBoer Comments on Energy Efficiency Bill at Senators Portman, Shaheen News Conference