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New forecasts that the federal government may be unable to pay its bills by the first half of September have put pressure on policymakers to raise the nation's debt ceiling before Congress departs for summer recess – or face the prospect of a national default. If the debt limit is not increased to meet the nation's financial obligations, the government could miss payments to federal employees for salaries and pensions, debt service to foreign lenders, and potentially interest payments on the federal debt.

As The Real Estate Roundtable marks its 20th anniversary, its members have re-elected Debra A. Cafaro (Chairman and Chief Executive Officer, Ventas, Inc.) as Chair, while approving its Board of Directors for the 2020 fiscal year (July 1, 2019 - June 30, 2020). The election results were announced by Roundtable President and CEO Jeffrey DeBoer during the organization's Annual Meeting earlier this month in Washington.

The Supreme Court of the United States (SCOTUS) issued a landmark property rights decision on June 21, ruling that the federal courts are open to decide landowners' claims for a Fifth Amendment "taking" of property by local regulatory agencies. In Knick v. Township of Scott , the nation's highest court reversed a 1985 precedent that had forced property owners to first bring takings lawsuits in state courts, which acted as "gatekeepers" to block the claims from ultimately getting to federal court.

The House Ways and Means Committee yesterday passed legislation to extend a host of expired and expiring tax credits through 2020 by a vote of 25-17. Among the bills advanced to the House floor for consideration is the Taxpayer Certainty and Disaster Tax Relief Act of 2019 (H.R. 3301), which includes a deduction for energy efficient commercial buildings (Section 179D). (House Ways and Means, Markup of Tax Legislation). Committee Chairman Richard Neal (D-MA) said in his opening statement that extenders would provide "needed certainty for businesses making use of tax provisions that expired in 2017 and 2018, as well as some set to expire this year."

FY2020 Roundtable Board of Directors Effective July 1

The Real Estate Roundtable this week urged Commerce Department Secretary Wilbur Ross to reject calls from domestic producers of fabricated structural steel (FSS) to change the rules governing how trade subsidies or dumping are calculated – and to consider how potential tariffs on FSS from Canada and Mexico could have a significant impact on jobs and growth in U.S. real estate. ( Roundtable comment letter , June 27) The Commerce Department, in conjunction with the U.S. International Trade Commission (USITC), is conducting an antidumping and countervailing duty investigation into imported FSS from Canada, China and Mexico. (Commerce Department announcement, Feb. 26 and ITC initial report on FSS, March 2019)

President Donald Trump signed an executive order Tuesday creating a White House Council on Eliminating Regulatory Barriers to Affordable Housing. ( White House Executive Order , June 25). Secretary of Housing and Urban Development (HUD) Ben Carson will chair the council, which will engage State, local, and tribal leaders to identify and remove obstacles that impede economic growth and the development of new affordable housing. ( White House video of the signing, June 25)

A hearing on The Reauthorization of the Terrorism Risk Insurance Program before the Senate Banking Committee was held on June 18 as the Coalition to Insure Against Terrorism (CIAT)—including The Real Estate Roundtable—submitted comments urging Congress to pass a long-term reauthorization of the Terrorism Risk Insurance Act (TRIA).

Major changes to New York City's rent regulations passed in Albany last week have drawn attention to a nationwide resurgence of rent control laws considered by cities and states across the nation. ( Wall Street Journal , June 14). The law signed by Governor Andrew Cuomo on June 14 directly impacts about 40 percent of New York City's apartment stock and expands rent stabilization to counties across the state. The law generally freezes "stabilized" NYC apartments from ever moving to market rental rates. (New York Times,June 12 and June 17).

The House Financial Services Committee on June 12 unanimously approved legislation that would reauthorize the National Flood Insurance Program (NFIP) for five years; spur the availability of private flood insurance; reduce costs for lower-income policyholders; and require updated flood zone maps for coverage. (Wall Street Journal, June 12). Next, the House of Representatives will consider the measure although the timing of a possible vote is not clear. (Section-by-Section Committee Bill Summary) The NFIP has operated under a series of temporary extensions since 2017. On June 6, President Trump signed a disaster relief bill that extended the program until Sept. 30, the end of the fiscal year.

The House Financial Services Committee this week passed the Corporate Transparency Act of 2019 ( H.R. 2513 ), which would require corporations and limited liability companies (LLCs) to report their beneficial owners to the Treasury Department's Financial Crimes Enforcement Network (FinCEN). The bill – introduced by Reps. Carolyn Maloney (D-NY) and Peter King (R-NY) – would shift the FinCEN reporting requirements from banks to the business community, requiring every business with fewer than 20 employees to register their beneficial owners with FinCEN. ( Roundtable Weekly , May 24) H.R. 2513 would also mandate that businesses update beneficial ownership information with any changes (home or business address, driver's license change, change in ownership) within 60 days, and annually for the life of the business. Failure to comply with these reporting requirements would be a federal crime with civil penalties of up to $10,000 and criminal penalties of up to three years in prison.

Roundtable Chair Debra A. Cafaro (Chairman & CEO, Ventas, Inc.) launched 2019 Annual Meeting by recognizing the organization's 20th anniversary of effective industry advocacy efforts and its newly-released FY2019 Annual Report.

The House Ways and Means Committee on June 4 held a Members' Day Hearing to address tax legislative priorities for the remainder of the year – including technical corrections to the Tax Cuts and Jobs Act (TCJA) that would correct a drafting error affecting qualified improvement property (QIP). Numerous other tax priorities are also expected to crowd the congressional agenda, including expired or expiring tax provisions; repeal of the state and local tax deduction cap; the national debt limit; and budget spending caps. A coalition of businesses and trade groups, including The Real Estate Roundtable, urged all members of Congress in April to cosponsor the Restoring Investment in Improvements Act (H.R. 1869 / S. 803) – a bill that would correct the QIP drafting error. The legislation would give qualified improvement property a 15-year depreciation period and restore its eligibility for accelerated bonus depreciation. (QIP Policy Comment Letter and Roundtable Weekly, April 26)

Installation of certain communications equipment on leased property to enable expansion of wireless networks should not be allowed without owner consent. That is the message submitted on June 3 to the Federal Communications Commission (FCC) by an industry coalition that includes The Real Estate Roundtable. (Joint Industry Comments to FCC). The coalition's comments come as the FCC considers whether to expand its interpretation of federal law regarding consumer home antennas, spurred by the development of 5G technology for the next generation of advanced communications equipment.

The Treasury Department yesterday issued proposed tax regulations clarifying the scope and operation of the foreign pension fund exemption from the Foreign Investment in Real Property Tax Act of 1980 (FIRPTA). (Federal Register, June 7) The proposed rules appear to be overwhelming positive and likely to resolve most, if not all, of foreign investors' remaining concerns. FIRPTA imposes U.S. capital gains tax on the sale of a U.S. repeal property interest by a foreign investor. FIRPTA results in a discriminatory tax on foreign investment in US real estate and infrastructure that does not apply to any other asset class. The FIRPTA regime is an anti-competitive outlier that deflects global capital to other markets.

The Real Estate Roundtable yesterday asked the U.S. Treasury Department and IRS to reduce the risk of market disruption by clarifying the tax treatment of financial contracts that replace the expiring London Inter-bank Offered Rate (LIBOR) with a substitute reference rate. Over $200 trillion of LIBOR contracts are outstanding, including roughly $1.3 trillion of commercial real estate debt. (Roundtable LIBOR letter, June 6) The United Kingdom's Financial Conduct Authority (FCA), which regulates LIBOR, announced in 2017 that it is phasing out the global borrowing index by the end of 2021. LIBOR will need to be replaced in both new agreements and innumerable existing legacy contracts.

On the eve of a May 22 White House meeting to discuss a national infrastructure improvement package, President Trump sent a letter to Democratic congressional leaders requesting they first approve his trade deal with Canada and Mexico before taking up infrastructure legislation. (Bloomberg, May 21) "Before we get to infrastructure, it is my strong view that Congress should first pass the important and popular [United States-Mexico-Canada Agreement (USMCA)] trade deal," Trump wrote. "Once Congress has passed USMCA, we should turn our attention to a bipartisan infrastructure package," he added.

With sweeping tax code changes enacted last month now in effect, both chambers of Congress are returning to a packed legislative to-do list and looming policy deadlines – including the expiration of the latest round of government funding on Jan. 19.

The Real Estate Roundtable is saddened by the recent passing of real estate industry veteran Joe Stettinius.

Commercial real estate industry leaders continue to acknowledge positive conditions in the economy and current real estate markets, while expressing some caution about 2019, according to The Real Estate Roundtable’s Q1 2018 Economic Sentiment Index released yesterday.