News Type: Roundtable Weekly

David Simon, Transformative Leader in Retail Real Estate

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The Real Estate Roundtable mourns the passing of David Simon, the longtime chairman, chief executive officer, and president of Simon Property Group, who died on March 22. Simon transformed his family’s business into the world’s leading retail property company and was one of the most influential figures in modern retail real estate. (WSJ | Simon Property Group Press Release, March 23)

Cost Recovery Reform to Spur New Housing Supply Gains Traction in Washington

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A new report from the influential Center for American Progress (CAP) suggests that allowing immediate expensing for new multifamily rental housing could spur a major increase in multifamily construction and bring down housing costs over the next decade. (CAP Report, March 11)

Report Findings

  • The CAP report found that immediate expensing for new multifamily rental housing, with a per-unit cap of $150K-$250K, could spur the creation of 706,000 to 1.06 million new homes over 10 years, at a cost of up to $206 billion. (PoliticoPro, March 12)
  • The researchers claim that faster cost recovery would lower the cost of capital, improve project cash flow, and help move more rental developments from infeasible to financeable.
  • The research also shows that full or partial expensing could increase housing supply at a lower cost per unit than many direct subsidy programs. (Tax Policy Center, March 17)
  • The researchers’ preferred approach would cap immediate expensing at $150,000 per unit, paired with a refundable credit option to address the fact that many real estate investors are tax-exempt or otherwise unable to use additional tax deductions. They estimate the proposal could produce roughly 755,000 new homes over a decade for about $154 billion.
  • The proposal also parallels last year’s One Big Beautiful Bill Act, which provided full expensing for new factories. The Tax Foundation called that change a step forward, but said its economic benefits would be limited because it is temporary and narrowly targeted. (Tax Foundation, Oct. 27, 2025)
  • The Tax Foundation published a reply to the CAP report that generally supports the approach while outlining a variety of cost recovery reform options for policymakers to consider, including: neutral cost recovery, and investment tax credit, tax deduction transferability, shorter asset lives, and partial expensing. (The Tax Foundation, Mar. 23)
  • The recent reports by the two influential think tanks are further evidence that policymakers are open to new approaches aimed at addressing housing affordability challenges.

On the Hill

  • Sen. Lisa Blunt Rochester (D-DE) introduced the Rental Housing Investment Act on March 12, which would allow builders to immediately deduct a portion of new multifamily construction costs rather than recover them over 27.5 years. (Sen. Rochester News Release, Mar. 12)
  • The bill would allow builders to immediately deduct up to $150,000 per unit in construction costs, with an enhanced deduction of up to $250,000 per unit for projects that include income-restricted units under long-term attainability commitments. The incentive would apply only to newly constructed multifamily rental housing. (USA Today, Mar. 11)
  • The measure is intended to support efforts to expand rental supply and address affordability pressures by improving the tax treatment of new multifamily development, as high interest rates and rising construction costs continue to weigh on housing production.

Property Conversions

  • Office conversions now account for nearly half of all future adaptive reuse projects. (CRE Daily, Mar. 25)
  • RentCafe reported that 90,300 apartments were in the conversion pipeline nationwide at the start of 2026, up 28% from 70,600 a year earlier, as the trend continues to gain momentum in both major and mid-sized markets. (RentCafe, Mar. 24)
  • New York leads the pipeline, followed by Washington, D.C., and Chicago. (Bisnow, March 26 | Cushman & Wakefield, Feb. 2026)
  • New research from Pew and Gensler highlights office-to-residential conversions, particularly lower-cost co-living microapartments in underused downtown buildings.  (Pew Research, Mar. 24)
  • Pew found the model could cut per-unit development costs by more than half in some markets and deliver nearly four times as many affordable homes per subsidy dollar compared to traditional studio development. (Pew Research, Mar. 24)
  • RER has strongly backed the bipartisan Revitalizing Downtowns and Main Streets Act of 2025 (H.R. 2410), which would create a market-based tax incentive for converting older commercial buildings to residential use to help expand housing and support the recovery of downtowns and neighborhoods still feeling the effects of the pandemic. (Roundtable Weekly, Mar. 2025)

RER will continue working with policymakers to advance tax and regulatory policies that encourage property conversions, reduce barriers to development, and help expand the nation’s housing supply.

Policymakers Continue Focus on Grid Reliability, Electricity Affordability 

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Congress and the White House are elevating questions around energy infrastructure, cost allocation, and the ability of the power sector to meet the needs of AI in a rapidly evolving economy.

Hearing Spotlights Grid Strain

  • On March 25, the Senate Energy and Natural Resources (ENR) Committee held a hearing on the state of the U.S. bulk power system. Lawmakers and witnesses pointed to growing strain from rising electricity demand, infrastructure delays, and reliability concerns. (Senate ENR Hearing, Mar. 25)
  • Witnesses agreed the U.S. is entering a new phase of electricity demand growth not seen in decades—driven by a combination of AI applications, domestic manufacturing, and electrification—creating both reliability risks and investment uncertainty. (Senate ENR Hearing, Mar. 25)
  • Lawmakers and witnesses suggested several solution pathways, including permitting reform to accelerate project approvals, expanded transmission buildout to relieve congestion, and improved interconnection processes to bring new generation online faster. (Senate ENR Hearing, Mar. 25)
  • Dr. Liza Reed (Niskanen Center) emphasized the central role of transmission, stating, “We need more energy and transmission to move that energy,” and warning that “a shortage of grid capacity is the primary barrier to the cost-effective and swift deployment of AI in this country.” (Reed Testimony, Mar. 25)
  • As The Real Estate Roundtable’s (RER) Policy Guide on building performance standards states, the transition to a digital economy raises serious concerns about electricity availability, as “[v]ast swaths of the U.S. are at risk of running short of power.” (Roundtable Weekly, Oct. 11, 2024)

Executive Action

  • On March 20, the White House released its National Policy Framework for Artificial Intelligence, accelerating congressional attention on these issues by directly linking data center growth to energy policy. (White House AI Framework, Mar. 20)
  • The framework calls on Congress to “ensure that residential ratepayers do not experience increased electricity costs as a result of new AI data center construction and operation” while also urging policymakers to “streamline federal permitting for AI infrastructure construction and operation.” (White House AI Framework, Mar. 20)
  • The administration’s approach builds on its earlier ratepayer protection pledge, which requires major technology companies to provide or pay for their own power. White House officials have urged Congress to codify that commitment into law. (E&E News, Mar. 23)
  • Congressional leaders quickly signaled alignment with the framework. In a joint statement, House Republican leaders said Congress must “enact a national framework that unleashes the full potential of AI… and provides important protections for American families.” (E&E News, Mar. 23)
  • At the same time, divisions remain, with some lawmakers raising concerns about federal preemption and the broader scope of the proposal. (E&E News, March 23)

State of Play – Permitting Reform

  • Lawmakers have been advancing multiple legislative approaches to address permitting delays, transmission bottlenecks, and the growing energy demands of data centers.
  • Notably, the RER-backed, bipartisan SPEED Act (H.R. 4776,), which passed the House in December 2025, would provide permitting certainty, codify certain NEPA reforms, and streamline environmental reviews for energy infrastructure. (Roundtable Weekly, Dec. 19, 2025)
  • RER believes permitting reform is essential for advancing our economy’s energy transition. The current fragmented system of administrative reviews and approvals hinders the delivery of quick, low-cost, reliable electricity to our nation’s homes and commercial buildings. (Roundtable Weekly, Oct. 10, 2025)
  • Permitting reform talks remain active but unsettled. Bipartisan negotiations continue and some Republicans consider narrower reconciliation options, though procedural constraints and the GOP’s narrow majority leave the path forward uncertain. (E&E News, Mar. 26)

Data Centers

  • Separately, lawmakers have introduced a range of proposals addressing data center energy use and cost allocation.
  • Recently introduced bills would require federal studies on ratepayer impacts (H.R. 6529), expand FERC oversight (H.R. 8033), ensure large-load customers cover their electricity costs (H.R. 7977), and mandate dedicated power sources for new data centers (S. 3852)—reflecting growing congressional focus on preventing cost shifts to consumers. (E&E News, Mar. 23)
  • On March 25, Sen. Dick Durbin (D-IL) introduced the Data Center Water and Energy Transparency Act, which would require data center developers and operators to disclose energy and water use to state and local officials considering new projects. (Sen. Durbin Press Release, Mar. 25)
  • Meanwhile, Senators Elizabeth Warren (D-MA) and Josh Hawley (R-MO) joined in a letter to the Energy Department’s data gathering arm, urging the agency to “establish a mandatory annual reporting requirement for data centers and other large loads.” (Sens. Warren, Hawley press release |  The Verge, Mar. 26)

RER will continue to engage with members of Congress and the administration to advance policies that streamline project approvals, support efficient cost allocation, and enable the energy infrastructure needed to power the real estate sector and the broader economy.

House Weighs Next Move on ROAD to Housing Act

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The bipartisan 21st Century ROAD to Housing Act remains in limbo in the House, where lawmakers are still weighing how to reconcile the Senate-passed package with the chamber’s own housing bill. The Senate approved its version two weeks ago after combining House priorities with the upper chamber’s broader housing agenda, but House members have raised concerns about several provisions added or revised in the Senate package—most notably the bill’s treatment of build-to-rent (BTR) housing.

State of Play

  • The House and Senate remain at odds over how to advance the housing package after the Senate passed its bill with overwhelming bipartisan support earlier this month. (PoliticoPro, Mar. 23)
  • House Financial Services Ranking Member Maxine Waters (D-CA) urged House Democrats this week to support a formal conference committee, arguing that the final bill should restore House priorities and address stakeholder concerns—an apparent reference to the Senate bill’s restrictions on large institutional investors in single-family housing.
  • Rep. Mike Flood (R-NE) said Wednesday that Senate Banking and House Financial Services leaders need to meet to resolve key differences between the two packages.
  • Rep. Flood identified three major House concerns with the Senate bill: the need to preserve but revise the provision restricting institutional investors from purchasing single-family homes, the omission of environmental review changes for certain affordable housing programs, and the Senate’s inclusion of a temporary rather than permanent restriction on a Federal Reserve central bank digital currency. (PoliticoPro | Watch Rep. Flood Remarks, Mar. 25)

Build-to-Rent

  • The biggest sticking point remains the Senate bill’s requirement that rental homes developed by large investors be sold to individual homebuyers after seven years. (The Urban Institute, Mar. 17)
  • House Republicans have raised concerns that the provision could undercut new rental housing production, disrupt financing, and introduce significant long-term uncertainty into the market.
  • The Real Estate Roundtable (RER) has warned that the bill’s forced-sale structure raises serious constitutional concerns and could trigger years of litigation involving property owners, tenants, and the federal government.

New BTR Research

  • Based on a March 19 discussion with 146 BTR executives, developers, and capital partners, the firm reported this week that the Senate bill’s seven-year disposal requirement has already frozen capital and halted new development ahead of enactment. Some capital will not return even if the bill is altered, reflecting ongoing concerns about future policy risk. (John Burns Research & Consulting, Mar. 24)

RER Advocacy

  • RER and a broad real estate coalition have spent weeks urging lawmakers to preserve the housing bill’s supply-focused provisions while removing language that would force large investors to sell newly built single-family rental homes after seven years. (Roundtable Weekly, Jan. 9 | Jan. 16 |  Jan. 23 | Feb. 27| Mar. 6 | Mar. 13 | Mar. 20)
  • In March, RER joined a series of coalition letters urging senators to remove or revise Section 901, warning that the seven-year sale requirement would effectively eliminate the production of BTR housing. (Roundtable Weekly, Mar. 20) (Letter, Mar. 5 | Letter, Mar. 13)
  • That message was reinforced again this week in an open letter from housing policy researchers, who warned that the Senate-passed ROAD to Housing Act would undermine BTR housing, which represents a growing source of new supply in markets where housing is already out of reach for many households. (Letter, Mar. 26)
  • The researchers said BTR has helped expand the housing stock, particularly for middle-income renters seeking single-family-style housing, and cautioned that the bill’s seven-year sale mandate would disrupt the model’s economics and reduce future production.
  • The letter also noted that many BTR communities are not structured to be sold off unit-by-unit, making the requirement especially problematic in practice.

What’s Next

  • The House and Senate are out on recess and do not return to Washington until April 14, leaving the future of the broader housing package uncertain. (NYT, Mar. 25)

Whether lawmakers pursue a formal conference or a narrower compromise, RER will continue urging Congress to preserve the bill’s pro-supply provisions while removing language that would reduce rental-housing production and make it more difficult to meet the nation’s growing housing needs.

Fed Holds Rates Steady Amid Heightened Uncertainty and Inflation Risks

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The Federal Reserve’s Federal Open Market Committee (FOMC) voted this week to hold its benchmark interest rate steady at 3.5 percent to 3.75 percent, as policymakers weigh persistent inflation, geopolitical risks, and mixed economic signals.

Key Takeaways

  • Fed Chair Jerome Powell emphasized that the current stance on monetary policy is “appropriate” as the economy continues to expand at a solid pace. (Powell press conference, March 18)
  • Price pressures remain above target. The Fed’s preferred inflation gauge shows Personal Consumption Expenditures (PCE) rising 2.8 percent annually, with core inflation at 3.0 percent, reflecting ongoing impacts from tariffs and price increases for goods. (Powell press conference, March 18)
  • Labor market conditions have stabilized but softened at the margins. Job growth remains subdued while unemployment has held at 4.4 percent in recent months. (Powell press conference, March 18)

Policy Outlook

  • Fed officials reiterated that future rate decisions will remain “data dependent” and emphasized that monetary policy is not on a preset course. (Federal Reserve statement, March 18)
  • Markets now expect a later timeline for any additional easing. Current pricing points to late 2026 as the earliest likely window for another cut, given persistent inflation and broader global uncertainty. (CNBC, March 17)
  • Policymakers also signaled they will be cautious in reacting to short-term shocks. Recent energy price increases may lift headline inflation in the near term, but the Fed appears inclined to wait for clearer evidence before changing course. (Reuters, March 18)
  • Political pressure continues to surround the central bank, including renewed calls from President Trump for lower rates. Even so, Fed leaders have maintained that economic conditions, not politics, will guide policy decisions. (CNBC, March 17 | Reuters, March 18)
  • For commercial real estate, this environment continues to present challenges. Higher interest rates are weighing on valuations, constraining refinancing activity, and limiting transaction volume.

Congressional Hearing on Fed Independence and Debt Pressures

  • The House Financial Services Task Force on Monetary Policy, Treasury Market Resilience, and Economic Prosperity held a hearing this week titled, “Revisiting the Treasury-Fed Accord.” The discussion focused on the historical framework governing Fed independence, the risks of fiscal dominance, and whether updated coordination between the Treasury and the Fed is needed. (Press release, March 19)
  • Task Force Chairman Frank Lucas (R-OK) emphasized the need to clarify institutional boundaries, stating Congress should encourage “a formal dialogue between the Fed and Treasury on the appropriate boundaries of their authority… while reinforcing monetary policy independence.” (Press release, March 19)
  • Lawmakers and witnesses also warned that rising federal debt could pressure interest rates and inflation. As Thomas Hoenig, Distinguished Senior Fellow, The Mercatus Center at George Mason University, noted, continued deficits put “strain on the markets” and “upward pressure on interest rates.” (Press release, March 19)

RER will continue to track monetary policy developments and engage policymakers on the need for stable capital markets, access to credit, and policy solutions that support long-term economic growth and real estate investment.

Federal Regulators Release Revised Basel III Endgame Proposal

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The Federal Reserve, Federal Deposit Insurance Corporation (FDIC), and Office of the Comptroller of the Currency (OCC) on Thursday unveiled a substantially revised Basel III Endgame proposal, replacing the 2023 framework that drew broad industry opposition. (WSJ | Fed Board Memo, March 19)

State of Play

  • The revised proposal would reduce capital requirements for the largest U.S. banks by 2.4% overall. (PoliticoPro, March 19)
  • The package would also replace the dual-track capital framework for the largest banks with a single approach, revise the G-SIB surcharge, and lower risk weights for mortgages and mortgage servicing assets. (ABA Banking Journal, March 19)
  • Regulators said the changes are intended to align capital with risk better, preserve safety and soundness, and support lending and other financial intermediation activities across economic conditions. (Fed Board Memo, March 19)
  • The interagency proposal would raise capital requirements by an estimated 1.4% under the revised Basel framework, but that increase would be more than offset by a 3.8% reduction in the G-SIB surcharge for the largest U.S. banks, for a net 2.4% decline overall.
  • Midsize banks would be allowed to decrease their capital buffers by an average of 5.2%, including stress-test revisions, and smaller banks by 7.8%. (WSJ, March 19 | AAF, March 20)
  • Regulators said the revised framework would also better support traditional lending and reduce incentives for activity to migrate outside the regulated banking system, including through lower risk weights for mortgages and mortgage servicing assets. (OCC News Release, Mar. 19)

Why It Matters

  • For commercial real estate, the reset could ease regulatory pressure that threatened to constrain credit for real estate lending, mortgage activity, and other capital-intensive transactions.
  • “Lowering the amount of capital held by banks would give them more money to deploy into the economy, potentially boosting growth,” said Federal Reserve Vice Chair for Supervision Michelle Bowman, who led the central bank’s efforts to craft the proposal. (Fed Press Release, March 19)
  • House Financial Services Committee Chairman French Hill (R-AR) and Subcommittee on Financial Institutions Chairman Andy Barr (R-KY) said the agencies had moved toward a “more balanced Basel III framework,” adding that right-sized capital standards are critical to preserving lending capacity, competitiveness, and access to credit. (Reps. Hill, Barr Statement, March 19)

Roundtable Advocacy

  • The Real Estate Roundtable (RER) has consistently opposed the original Basel III proposal, citing its potential negative impact on available credit capacity for commercial real estate transactions, market liquidity, and economic growth. (Roundtable Weekly, Nov. 2023; Jan. 2024; Mar. 2024)
  • In December, RER and a coalition of leading business trade organizations urged prudential regulators to examine and modernize large bank capital requirements so they continue supporting consumers, businesses, and the broader U.S. economy. (Letter, Dec. 2) (Roundtable Weekly, Dec. 5)
  • The coalition letter underscored the negative economic impacts of inappropriately calibrated capital rules, highlighted risks to American competitiveness, and commended ongoing agency efforts to improve the framework. (Roundtable Weekly, Feb. 20)

The agencies will accept comments on the proposed rules until June 18, and RER’s Real Estate Capital Policy Advisory Committee (RECPAC) looks forward to members’ input as it prepares comments on the proposal.

IRS Relief Expands Real Estate’s Access to Bonus Depreciation Tax Benefit

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IRS building in Washington, DC

The IRS and Treasury Department this week issued new guidance allowing real estate companies to withdraw prior elections that had prevented many from fully benefiting from the One Big Beautiful Bill Act’s (OB3 Act) restored 100% bonus depreciation provision. Revenue Procedure 2026-17 outlines how taxpayers may revoke those elections under Section 163(j), clearing the way for broader use of immediate expensing across commercial real estate. (Bloomberg, March 18)

Why It Matters

  • The Real Estate Roundtable (RER) has urged Treasury to allow real estate owners who previously elected out of strict limitations on the deductibility of business interest to withdraw or amend those elections. This would enable them to fully benefit from the OB3 Act’s restored bonus depreciation benefit. (Roundtable Weekly, Feb. 6)
  • Under the Tax Cuts and Jobs Act of 2017 (TCJA), an electing real property trade or business (RPTOB) is exempt from the Section 163(j) limit on business interest deductibility, but must use the alternative depreciation system to recover the cost of its investment. As a result, electing RPTOBs are ineligible for bonus depreciation on leasehold and nonresidential interior property improvements.
  • Beginning in 2022, the Section 163(j) business interest limitation tightened, and starting in 2023, bonus depreciation began to phase out. Those two changes led many real estate owners to make the RPTOB election.
  • The OB3 Act reversed both provisions by restoring the original TCJA parameters for Section 163(j) and permanently extending 100% bonus depreciation. While that was a major positive development for new real estate investment, it left existing property owners locked into irrevocable RPTOB elections made under prior law.
  • Revenue Procedure 2026-17 addresses that problem by allowing taxpayers to retroactively withdraw an RPTOB election for taxable years 2022, 2023, or 2024. If a real estate owner withdraws the election under the revenue procedure, the owner is treated as if the election had never been made.
  • This change makes 100% bonus depreciation available to a much larger share of U.S. commercial real estate, ensures that property owners are not penalized for elections made under a tax regime that no longer applies, and should support additional capital formation.
  • The revenue procedure also provides guidance on the administrative steps for withdrawing an election, partnership filing requirements, and procedures for amending returns for intervening years.

RER Advocacy

  • In an Oct. 17, 2025, letter, RER wrote to Treasury urging guidance allowing real estate businesses to amend or revoke prior RPTOB elections to ensure the OB3 Act’s restored 100 percent bonus depreciation provision supports real estate investment, job creation, and economic growth. (Roundtable Weekly, Feb. 6)
  • The letter emphasized that clear implementing rules will help bonus depreciation “facilitate the modernization and repurposing of real estate assets,” including underutilized offices, shopping centers, hotels, and mixed-use properties. (Roundtable Weekly, Oct. 17)

Treasury’s action addresses a key transition issue created by the new law. It helps ensure that restored bonus depreciation can work as intended across a broader share of commercial real estate investment.

House Weighs Next Steps on ROAD to Housing Act as White House Issues Housing Executive Orders

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The Senate’s overwhelming passage of the bipartisan 21st Century ROAD to Housing Act last week has shifted attention to the House, where lawmakers are weighing how to reconcile the Senate bill with the House-passed housing package approved in February.  (PoliticoPro, March 17 | Politico, March 19)

State of Play

  • The House and Senate remain at odds over how to advance the 21st Century ROAD to Housing Act, with House Republicans threatening a formal conference to force negotiations while Senate leaders hope the House will ultimately accept the Senate-passed bill.
  • The Senate passed the bill 89-10 on March 12. They then sent it back to the House, which had already passed its own bipartisan housing package—the Housing for the 21st Century Act—by 390-9 on February 9.
  • The Senate-passed bill preserves much of the prior ROAD to Housing bill’s framework and includes several provisions intended to boost housing supply.
  • The Senate version also includes Section 901, which would restrict additional single-family home acquisitions by institutional investors that directly or indirectly own at least 350 homes and require owners to sell build-to-rent (BTR) homes within seven years or face an onerous penalty. The Section also provides unusually broad regulatory authority to the Treasury Department to address “market disruptions” and other situations that could create troubling future regulatory actions. (Roundtable Weekly, March 13 | Forbes, March 17)
  • House Financial Services Chairman French Hill (R-AR) told CNBC’s Squawk Box he is optimistic the House and Senate can work through differences in their housing bills, but stressed that the Senate text contains “some real problems” that need to be corrected. He pointed specifically to the build-to-rent provision requiring homes to be sold within seven years, which he said would undermine efforts to increase housing supply. (Watch Squawk Box CNBC, March 18)

Executive Orders – Housing

  • President Trump issued two executive orders aimed at boosting housing construction and expanding mortgage access, as the House and Senate work through differences over the ROAD Act. (EO Construction | EO Mortgage, March 13)
  • The administration said the orders are intended to reduce regulatory burdens, increase supply, and improve credit access for qualified borrowers. (WSJ, March 13)
  • The construction order, “Removing Regulatory Barriers to Affordable Home Construction,” directs federal agencies to revise or eliminate requirements related to environmental reviews, energy conservation standards for manufactured and federally financed housing, and historic preservation, while directing HUD and the White House Domestic Policy Council to develop best practices for state and local governments to increase housing supply and affordability. (EO Construction, Mar. 13)
  • The mortgage order, “Promoting Access to Mortgage Credit,” is intended to expand access to mortgage credit, particularly through community banks and smaller lenders. (EO Mortgage, March 13)
  • The EOs reinforce the administration’s broader housing message and overlap with parts of both congressional bills focused on cutting red tape, supporting community banks, and expanding supply. (PoliticoPro, March 13)

RER & Industry Advocacy

  • In March, RER joined a series of coalition letters urging senators to remove or revise Section 901, warning that the seven-year sale requirement would effectively eliminate the production of BTR housing. (BisNow, March 12) (Letter, March 5 | Letter, March 13)
  • Last week, RER President and CEO Jeffrey D. DeBoer sent senators an analysis warning that the bill’s forced-sale provision raises serious constitutional concerns and would likely trigger years of litigation. (RER Analysis, March 10)
  • DeBoer stated, “RER supports many provisions in the Senate-passed 21st Century ROAD to Housing Act that would help expand housing supply and reduce barriers to homeownership. But the bill’s forced-disposition provision for build-to-rent would discourage investment in new rental housing and raise serious constitutional concerns. As the House takes up the bill, RER urges lawmakers to remove that language and keep the focus on increasing housing supply and affordability. (NMHC & NAA Statement | NAHB Statement, March 12)

RER will continue urging lawmakers to preserve the bill’s pro-supply provisions while removing language that would reduce rental housing production and chill the capital formation needed to address the nation’s housing shortage.

In the News: Roundtable TPAC Chair Urges Treasury to Modernize Foreign Investment Tax Rules, Preserve U.S. Access to Foreign Capital

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A new Bloomberg op-ed by RER Tax Policy Advisory Committee Chair Joshua Parker (Founder, Chairman and Chief Executive Officer, Ancora) reinforces The Real Estate Roundtable’s (RER) push for Treasury to modernize Section 892 regulations without discouraging sovereign investment in U.S. real estate and other long-term assets. (Bloomberg Tax, March 11)

Op-Ed Highlights

RER Tax Policy Advisory Committee Chair Joshua Parker
  • Section 892 of the tax code generally exempts investment income earned by foreign governments, including sovereign wealth funds, from U.S. income tax. The 892 exemption does not apply, however, if the foreign government effectively controls the U.S. business or is deemed to be engaged in a commercial activity.
  • Parker writes that Treasury’s regulatory effort is “constructive and necessary,” but cautions that the rules must distinguish between legitimate investor stewardship and effective control of a business. (Bloomberg Tax, March 11)
  • The op-ed argues that Section 892 needs to catch up with major changes in capital markets, including the growth of private credit, direct lending, and co-investment strategies that were not significant features of the market when the statute was enacted.
  • Parker emphasizes that policymakers should not “sweep fundamentally different forms of investor participation into the same regulatory framework.
  • Responsible investors “must exercise fiduciary oversight, manage risk, and ensure disciplined capital deployment,” Parker adds. Customary minority protections such as consent rights, veto rights, and approval of extraordinary actions are forms of stewardship, not day-to-day business control.

Why It Matters

  • Since 2011, foreign governmental investors have invested more than $100 billion in U.S. commercial real estate. (Roundtable Weekly, Feb. 13)
  • Foreign capital invested in the U.S. has supported housing supply, infrastructure development, research facilities, and place-based economic growth. (Bloomberg Tax, March 11| RER Letter, Feb. 12)

RER Advocacy

  • In February, RER submitted a comment letter to Treasury Secretary Scott Bessent on the Section 892 regulations and proposed rules, urging clear grandfathering rules and changes to prevent disruptions to sovereign investment in U.S. real estate. (Letter, Feb. 12 | Roundtable Weekly, Feb. 27)

RER will continue engaging Treasury to ensure the final rules provide clarity for investors while avoiding unintended disruptions to U.S. real estate capital formation.

Senate Passes ROAD to Housing Act as Industry Urges Changes to BTR Language

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The Senate passed the bipartisan 21st Century ROAD to Housing Act on Thursday in an 89-10 vote, advancing one of the most significant federal housing packages in years and setting up the next phase of negotiations with the House. (Multi-Housing News, March 13 | BisNow, March 12)

State of Play

  • The Senate-passed bill preserves much of the prior ROAD to Housing bill’s framework and includes several provisions intended to boost housing supply. (Politico, March 12)
  • The package would streamline project reviews, raise FHA multifamily loan limits, support manufactured housing, and encourage additional housing development in designated Opportunity Zones. (Roundtable Weekly, March 6)
  • The final Senate text includes Section 901, which would restrict additional single-family home acquisitions by institutional investors defined as entities that directly or indirectly own at least 350 homes. (Multifamily Dive, March 12)
  • It also includes a seven-year forced disposition requirement that would require owners to sell build-to-rent (BTR) homes they develop to another private party or pay an onerous penalty. (PoliticoPro, March 10)
  • Real Estate Roundtable (RER) President and CEO Jeffrey D. DeBoer stated, “RER supports many provisions in the Senate-passed 21st Century ROAD to Housing Act that would help expand housing supply and reduce barriers to homeownership. But the bill’s build-to-rent forced disposition provision would discourage investment in new rental housing and raise serious constitutional concerns. As the House takes up the bill, RER urges lawmakers to remove that language and keep the focus on increasing housing supply and affordability. (NMHC & NAA Statement | NAHB Statement, March 12)
  • RER has warned that the bill’s treatment of BTR housing raises significant concerns under the Fifth Amendment Takings Clause and the Supreme Court’s decision in Kelo v. City of New London. (RER Analysis, March 10 | WSJ, March 9)
  • A federal law compelling one private party to sell property it owns directly to another private party, without government initiation of eminent domain proceedings, would be without precedent.
  • If enacted, the BTR language would almost certainly invite years of constitutional litigation involving property owners, renters, and the federal government.

Congressional Concerns

  • House Financial Services Chairman French Hill (R-AR) called the Senate vote an “important step,” while cautioning that lawmakers still need to “get the details right” and address concerns raised by House members. (Politico, March 12)
  • Sen. Brian Schatz (D-HI) criticized the investor language on the Senate floor, calling it a “drafting error” and warning it could undermine housing production. (Watch Schatz Speech, March 11)
  • “I will stipulate that there are a lot of good things in this bill that are kind of on the pro-housing supply side, but what we are about to do is essentially ban a specific kind of housing,” said Sen. Schatz. (Barrons, March 11 | NBC News, March 12)
  • Sen. Schatz also said the bill could interfere with LIHTC projects, including affordable single-family developments, if the language is not revised.
  • Rep. Mike Flood (R-NE) has also warned that the Senate bill’s BTR provision could “crush an industry” that produces roughly 50,000 homes a year. (PoliticoPro, March 11)

What the Research Shows

  • Analysis has reinforced the concern that restricting institutional capital may do little to improve affordability while creating new supply problems.
  • RER has consistently emphasized that expanding housing supply is the most effective path to improving affordability, as research shows affordability pressures are driven primarily by supply shortages, construction costs, and mortgage rates—not institutional ownership levels. (Roundtable Weekly, Jan. 9 | Jan. 16)
  • Recent analysis from AEI and Cato indicated that driving institutional capital out of housing is unlikely to improve affordability and may instead reduce investment, shrink supply, and leave Treasury with broad discretion over favored and disfavored forms of housing investment. (AEI, March 10 | CATO Institute, March 4)
  • According to analysis by The Pew Charitable Trusts, Section 901 could sharply curtail build-to-rent housing, which has recently added 70,000 to 130,000 homes annually, by undermining the financial viability of those projects, displacing renters, and reducing new single-family construction starts by 100,000 or more homes a year. (Pew, March 10)

RER & Industry Advocacy

  • In March, RER joined a series of coalition letters urging senators to remove or revise Section 901, warning that the seven-year sale requirement would effectively eliminate the production of BTR housing. (PoliticoPro, March 10 | BisNow, March 12; Letter | Bisnow | Politico, March 5; Letter, March 9)
  • This week, RER President and CEO Jeffrey D. DeBoer sent senators an analysis warning that the bill’s forced-sale provision raises serious constitutional concerns and would likely trigger years of litigation. (RER Analysis, March 10)
  • In a letter sent today to House leadership, RER and other national organizations thanked the House for advancing landmark housing legislation while urging lawmakers to amend Section 901 before final passage. (Letter, March 13)
  • The letter warns that the Senate-passed language would effectively eliminate the production of BTR housing and take critically needed new housing units off the table at a time of severe affordability and supply pressures. (Letter, March 13)
  • The coalition also argued that BTR homes expand rental choices for families seeking more space and flexibility, and that forcing providers to sell those homes would displace renters, reduce supply, and undermine the bill’s broader pro-housing goals.

What’s Next

  • The House would need to pass the Senate’s version or convene with the upper chamber to combine the bills into one piece of legislation before it heads to the president’s desk. (Politico, March 12)
  • “If the White House wants the House to pick up the bill and pass it, they’ll probably have to make that argument to the House leadership,” Senate Majority Leader John Thune (R-SD) said Thursday. (Politico, March 12)

RER will continue urging lawmakers to preserve the bill’s pro-supply provisions while removing language that would reduce rental housing production and chill the capital formation needed to address the nation’s housing shortage.