News Type: Roundtable Weekly

CRE Leaders Convene in Washington to Discuss Policy Priorities, Market Trends, and Bipartisan Solutions

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Industry leaders convened with policymakers at this week’s Fall Roundtable Meeting to address national policies impacting commercial real estate and the broader economy.

Fall Roundtable Meeting

  • The timely discussions focused on bipartisan opportunities in AI, immigration, and permitting reform; as well as tax policy; tariffs and trade relations, persistent inflation and energy costs, and housing supply affordability. (RER’s Fall 2025 Policy Priorities and Executive Summary)
  • Permitting reform and electric grid reliability were top of mind throughout the meeting, with members and policymakers emphasizing the urgent need to modernize infrastructure to meet growing energy demand.
  • The discussions coincided with a bipartisan letter sent to Congress from 13 governors led by Pennsylvania Gov. Josh Shapiro (D) and Oklahoma Gov. Kevin Stitt (R), urging Congress to streamline federal permitting rules, expand interstate transmission, and accelerate the nation’s energy transition. (PoliticoPro | NGA Press Release, Oct. 28)
  • RER Board Chair Kathleen McCarthy (Global Co-Head of Blackstone Real Estate, Blackstone) emphasized connectivity through Roundtable on the Road and member engagement in policy committees. “These touchpoints keep our priorities aligned and ensure we are speaking with one powerful, fact-based voice,” McCarthy said.
  • RER President and CEO Jeffrey DeBoer highlighted RER’s positive advocacy efforts around the One Big Beautiful Bill Act (OB3), including preservation of carried interest, permanent Opportunity Zones, and expansion of the Low-Income Housing Tax Credit. “Those outcomes only happen because of sustained, credible advocacy, backed by the expertise and perspectives our members bring to every discussion,” DeBoer said.

Speakers & Policy Issues

Roundtable members engaged in policy issue discussions with the following guests:

  • Sen. Michael Bennet (D-CO) (Committees: Finance; Select Committee on Intelligence; Rules; Agriculture, Nutrition and Forestry) discussed bipartisan cooperation on immigration reform, housing affordability, and fiscal policy, calling the nation’s housing situation “an affordability crisis.”
  • Sharon Wilson Géno (President, National Multifamily Housing Council) highlighted the Housing Solutions Coalition’s work to educate policymakers on the consequences of rent control and promote data-driven, pro-housing reforms at federal and state levels.
  • Rep. French Hill (R-AR) (Chair, House Financial Services Committee; Permanent Select Committee on Intelligence) outlined congressional priorities on capital formation, digital assets, simplifying federal regulation for community banks, and reauthorization of the Terrorism Risk Insurance Act (TRIA).
  • Rep. Josh Gottheimer (D-NJ) (Committees: Financial Services; Permanent Select Committee on Intelligence) emphasized pragmatic governing coalitions to advance permitting and immigration reforms while maintaining fiscal discipline and strengthening global competitiveness.
  • Ambassador Timmy Davis (Ret.) (Former U.S. Ambassador to Qatar; President & Partner, Irth Capital Management; Senior Advisor, Mavik Capital) and Vik Uppal (Founder and CEO, Mavik Capital) shared insights on international capital flows and global geopolitical factors influencing cross-border real estate investment.

Next on RER’s meeting calendar is the all-member State of the Industry (SOI) Meeting, which will include policy advisory committee sessions, on January 21–22, 2026, in Washington, DC.

Fed Cuts Rates Again as CRE Eyes Relief; Coalition Supports FSOC Reform

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The Federal Reserve on Wednesday approved a second consecutive quarter-point rate cut, lowering the federal funds rate to 3.75-4 percent. Chair Jerome Powell cautioned that another reduction in December is uncertain, suggesting the pace of easing could soon slow.

Fed’s Decision

  • The 10-2 vote saw Governor Stephen Miran favor a deeper half-point cut, while Kansas City Fed President Jeffrey Schmid opposed any reduction. (CNBC, Oct. 29)
  • Policymakers cited rising downside risks to employment amid persistent inflation near 3 percent.
  • Chair Powell noted “strongly differing views” on whether further easing is warranted, signaling a potential pause in December. “A further reduction in the policy rate at the December meeting is not a foregone conclusion. Far from it,” he said. (Watch Press Conference)
  • The chair also acknowledged the limited availability of economic data as the ongoing government shutdown has suspended federal data collection and reports.

Housing and CRE Outlook

  • At this week’s Fall Roundtable Meeting, House Financial Services Chair Rep. French Hill (R-AR) noted that persistent inflation continues to weigh on markets, though gradual rate cuts are beginning to ease conditions for housing and credit.
  • Continued monetary easing and the Fed’s balance sheet pivot may still bring modest relief to mortgage costs heading into 2026. (HousingWire, Oct. 29)
  • Economists note that improved credit conditions could stimulate purchase demand and support CRE transaction activity, though affordability challenges persist.

RER Advocacy

  • RER and coalition partners submitted a comment letter to the U.S. House of Representatives this week in support of H.R. 3682, the Financial Stability Oversight Council (FSOC) Improvement Act of 2025. (Letter, Oct. 28)
  • The bill, approved 47-4 by the House Financial Services Committee in Sept, would require FSOC to consult with a company and its primary regulator before designating a nonbank as a Systemically Important Financial Institution (SIFI), which would be subject to heightened prudential regulation and supervision by the Federal Reserve Board. (House Financial Services Committee Vote No. FC-198, Sept. 16)
  • The letter emphasized the importance of an activities-based approach to systemic risk, transparent cost-benefit analysis, and clear procedural guardrails to ensure predictability in financial oversight.
  • This follows a similar letter RER signed in July supporting efforts to restore due-process standards and coordination between FSOC and primary regulators. The letter urged FSOC to rescind its 2023 interpretive guidance and reinstate the Council’s 2019 framework for designating nonbank financial companies. (Letter, July 14)

Basel III Endgame

  • The Fed is circulating a revised Basel III Endgame proposal that would increase capital charges for large banks by 3-7 percent instead of the originally proposed 19 percent. (Bloomberg, Oct. 22)
  • RER strongly opposed the Fed’s original proposal, pointing out the significant economic costs it would incur without clear benefits to the economy, recommending that it be withdrawn and only reissued after further study. (Roundtable Weekly, June 27)

RER will continue to track developments on monetary policies and support measures that preserve liquidity and lending capacity as rate relief remains gradual.

Economic Strain Mounts as Pressure Builds on Congress to End Record Shutdown

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The federal government shutdown, now nearing its fifth week and on pace to become the longest in U.S. history, is showing early signs of bipartisan negotiation after weeks of stalemate. Lawmakers are facing mounting pressure to reach an agreement before critical deadlines affect food assistance and healthcare programs.

State of Play

  • Bipartisan conversations have modestly increased this week as senators search for a path to end the impasse. Senate Majority Leader John Thune (R-SD) said talks “have picked up,” noting that deadlines often spur action. (PoliticoPro, Oct. 29)
  • Despite limited optimism, lawmakers view progress onFY2026 appropriations as a potential vehicle to rebuild trust and advance a reopening framework. Still, with the Senate adjourned and the House out of session, finalizing a deal before key programs lapse remains difficult. (Roll Call, Oct. 29)
  • Near-term pressure points include the exhaustion of Supplemental Nutrition Assistance Program (SNAP) and WIC benefits by the end of October, the start of Affordable Care Act (ACA) open enrollment on Nov. 1, and worsening transportation delays as air traffic controllers and TSA staff miss additional paychecks.
  • Senate Minority Leader Chuck Schumer (D-NY) told reporters Tuesday that he believes Republicans will face “increased pressure to negotiate with us.” (Politico, Oct. 29)
  • House Speaker Mike Johnson (R-LA) has kept the chamber out for more than a month, insisting that Democrats must first agree to reopen the government before broader spending or healthcare talks resume.
  • However, rank-and-file senators from both parties report renewed engagement, with some GOP leaders predicting that centrist Democrats may soon support a compromise. (Politico, Oct. 29)
  • Leader Thune said moderate Democrats are seeking an “off-ramp,” and he is willing to negotiate on extending ACA subsidies but only once the government reopens. Proposals include offering Democrats a vote on their own plan to continue the tax credits beyond December, and a possible meeting with President Trump to discuss ACA subsidies as early as next week. (The Hill, Oct. 30)
  • In a series of Truth Social posts on Thursday, President Trump urged Republicans to eliminate the Senate filibuster, which currently requires 60 votes to advance legislation. Leader Thune has previously rejected changing the rule, calling the threshold “a bulwark against a lot of really bad things.” (CBS News, Oct. 31)

Economic Fallout

  • The Congressional Budget Office (CBO) estimates the shutdown will cost the U.S. economy between $7 billion and $14 billion, depending on its duration, according to a new report released Wednesday. (CBO Letter, Oct. 29)
  • In a letter from CBO Director Phillip Swagel to the Chairman of the House Budget Committee, the nonpartisan agency acknowledged that the real economic impact of the shutdown remains uncertain. (Politico, The Hill Oct. 29)
  • A four-week shutdown would reduce real GDP by $7 billion, rising to $11 billion after six weeks and $14 billion after eight. (Bloomberg, Oct. 29)
  • The CBO estimates the shutdown will reduce real GDP growth by 1 to 2 percentage points, with overall growth expected to recover after 2026—but some losses, particularly from federal worker furloughs, will be permanent.
  • Lawmakers from both parties warn that the economic fallout will deepen if the impasse continues, threatening programs vital to housing, infrastructure, and financial markets.

Path Forward

  • GOP leaders are exploring a continuing resolution (CR) that could extend government funding into mid-January or March, though several versions remain under discussion.
  • Democrats oppose any measure that carries funding into next year without renewing the enhanced ACA subsidies set to expire in December.

RER continues to urge Congress to act responsibly to reopen the government and restore critical housing, insurance, and economic programs essential to real estate investment and growth.

Senate Hearing Highlights Bipartisan Push to Expand Housing Supply and Cut Costs

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The Senate Banking Subcommittee on Housing, Transportation, and Community Development held a hearing this week, “Innovation in U.S. Housing: Solutions and Policies for America’s Future,” which examined the nation’s housing shortage, the impact of rising regulatory costs, and innovative approaches such as modular and off-site construction, accessory dwelling units (ADUs), and pre-disaster mitigation to help address the housing crisis.

Hearing Highlights

  • Subcommittee Chair Katie Britt (R-AL) and Ranking Member Tina Smith (D-MN) framed the housing crisis as a bipartisan priority, citing the ROAD to Housing Act’s unanimous 24-0 passage through the Senate Banking, Housing, and Urban Affairs Committee as proof of momentum for federal housing reform. (Watch Hearing)
  • Among the measures Senators raised were proposals to ease permitting rules, streamline approvals, and modernize FHA and USDA programs to speed construction.
  • Members also discussed Opportunity Zones and expanding the Low-Income Housing Tax Credit (LIHTC as levers to spur investment in underserved areas, particularly when paired with state and local zoning reforms.
  • Witnesses emphasized regulatory and financing barriers, noting that government requirements add roughly 24 percent to the cost of new single-family homes and 40 percent to multifamily developments. 
  • Mary Tingerthal, founder of Construction Revolution, highlighted modular and off-site construction as key innovations to lower costs and timelines, reducing project durations by up to 50 percent and costs by 10-20 percent.

By the Numbers

  • A new report published by Goldman Sachs Research estimates the U.S. must add 3-4 million homes—about 2-2.6 percent of current housing stock.
  • The firm found that restrictive land-use regulations are the biggest barrier to growth, and that easing them could generate up to 2.5 million additional units over the next decade. (Goldman Sachs, Oct. 21)
  • Separately, Goldman Sachs economists reported that U.S. consumers are bearing about 55 percent of the costs from tariffs this year, with businesses and foreign exporters absorbing smaller shares. (ABC News, Oct. 14)
  • The firm said U.S. companies are expected to pass on more of those costs to consumers as the tariffs remain in effect.  (The Hill, Oct. 13)

RER Advocacy

  • The bill focuses on streamlining regulations, incentivizing construction, modernizing housing finance and disaster recovery programs, and supporting vulnerable populations such as veterans and the homeless.   

Roundtable on the Road – Chicago

  • This week, RER Chair Kathleen McCarthy (Blackstone), RER Treasurer Michelle Herrick (JPMorgan Chase), and RER President and CEO Jeffrey D. DeBoer hosted members in Chicago for Roundtable on the Road, featuring discussions on housing policy, market innovation, and federal priorities.
  • “Our Chicago stop underscored the value of Roundtable on the Road—real-time dialogue among industry leaders on housing, the economy, and market trends,” said DeBoer. These on-the-ground insights strengthen our advocacy in Washington, helping to shape practical, fact-based solutions that expand housing, fuel growth, and ensure policymakers understand the real-world impact of their decisions.”

Housing, GSE reform, and solutions to improve housing affordability will be key topics of discussion during RER’s Fall Roundtable Meeting next week in Washington, D.C., on Oct. 27-28 (Roundtable-level members only).

Washington Gridlock Deepens Amid Prolonged Shutdown

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U.S. Capitol at sunset

The federal government shutdown—now in its fourth week and the second-longest in U.S. history—shows no sign of ending as partisan divisions deepen and the House remains in recess. (Punchbowl News, Oct. 24)

State of Play

  • House Republicans have no plans to reconvene before next week, as negotiations remain stalled over renewing enhanced Affordable Care Act (ACA) subsidies, which expire at year’s end. (PoliticoPro, Oct. 23)
  • Speaker Mike Johnson (R-LA) has kept the chamber out of session for more than a month, insisting that Democrats must first agree to reopen the government before any negotiations on broader health care or spending issues resume.
  • In the Senate, lawmakers have rejected short-term funding bills 12 times since Oct. 1. The latest GOP-led continuing resolution (CR) to fund operations through Nov. 21 failed earlier this week.
  • Senate Majority Leader John Thune (R-SD) has suggested separate votes to fund active-duty military members and air traffic controllers in an effort to increase pressure on Democrats, but the measures have also failed. (Politico | Washington Post, Oct. 23)

Economic and Operational Strains

  • The most recent consumer price index showed annual inflation at 3% in September, keeping the Federal Reserve on track to cut rates next week. The shutdown has halted new economic data releases, prompting Fed Chair Jerome Powell to warn that the prolonged “data blackout” could complicate monetary policy. (PoliticoPro, Oct. 24 | Axios, Oct.24)
  • Lawmakers on both sides warn that the economic fallout will deepen if the impasse continues, threatening programs vital to housing, infrastructure, and financial markets.
  • EY-Parthenon Chief Economist Gregory Daco estimates that the shutdown will cost the U.S. economy roughly $7 billion per week. (BisNow, Oct. 12)
  • U.S. GDP could decline by 15-20 basis points per week, though the near-term impact on commercial real estate remains limited, according to Marcus & Millichap. (Marcus & Millichap)
  • Cybersecurity risks are rising as agencies such as the Cybersecurity and Infrastructure Security Agency (CISA) operate with minimal staff. Businesses report limited federal coordination following the expiration of the Cybersecurity Information Sharing Act of 2015, which had allowed companies to share threat data with the government. (Bloomberg, Oct. 22)

Looking Ahead & What’s at Stake

  • Mounting political and economic pressure points are expected to intensify around Nov. 1, when funding shortfalls for Supplemental Nutrition Assistance Program (SNAP) and WIC nutrition benefits are projected, ACA open enrollment begins, and federal workers miss another paycheck—factors that could force both parties back to the negotiating table.
  • Federal workforce: Hundreds of thousands of employees will miss a paycheck this week. The Trump administration has reprogrammed limited funds to pay military personnel and some law enforcement officers, yet mass layoffs are underway, and litigation over the firings has already begun.
  • Transportation delays: Shortages of air traffic controllers and TSA employees are worsening as paychecks lapse. Speaker Johnson said he will not recall the House to vote on a standalone bill to fund these workers, while Senate leaders may soon force votes on military pay and nutrition benefits ahead of the Nov. 1 cutoff.
  • Public assistance: Existing funding for the SNAP program is expected to run out by the end of October. The administration is assessing whether it can reallocate funds to sustain the program, which serves 42 million Americans.
  • Health coverage: The start of ACA open enrollment on Nov. 1 is another flashpoint, as Democrats warn that expiring subsidies could drive higher premiums and intensify voter pressure to end the shutdown.

Path Forward

  • Lawmakers have floated extending the current stopgap into December or early 2026, but no consensus has emerged. Democrats oppose any measure that provides funding into next year without renewing enhanced ACA subsidies that expire in December.
  • The Senate is set to leave Washington until Monday, while the president departs for a 10-day trip to Asia, further dimming hopes for a near-term deal.

RER continues to urge Congress to act responsibly to reopen the government and restore critical housing, insurance, and economic programs essential to real estate investment and growth.

Treasury Proposes Repeal of FIRPTA Look-Through Rule for Domestically Controlled REITs

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IRS building in Washington, DC

The Treasury Department and the Internal Revenue Service (IRS) on Monday released a new Notice of Proposed Rulemaking that would repeal the FIRPTA “look-through” rule for domestically controlled real estate investment trusts (REITs)—a significant policy shift strongly supported by The Real Estate Roundtable (RER).

Proposed Change

  • Under the proposed regulation, the domestic corporation look-through rule would be removed, treating all domestic C corporations as non-look-through persons when determining whether a REIT is domestically controlled, and thus exempt from FIRPTA. (National Law Review, Oct. 23)
  • Once finalized, taxpayers could elect to apply the new rule retroactively to transactions occurring on or after April 25, 2024, when the prior regulations were finalized. (Thomas Reuters, Oct. 21)

RER Advocacy

  • RER was a vocal critic of the look-through rule when it was first proposed in 2022, and urged its removal from the regulations.
  • The rule was finalized last year with only modest transition relief. In March, RER submitted a letter to Treasury outlining concerns with the regulation and again calling for its repeal. (Roundtable Weekly, March 21)
  • Those issues were also raised and discussed with Treasury at RER’s Tax Policy Advisory Committee (TPAC) meeting this summer.
  • Backed by detailed data on foreign capital flows provided by CBRE, RER’s March submission emphasized the chilling impact that the regulations were having on foreign investment into U.S. real estate. TPAC member David Polster (Skadden) and his colleague Nick Gianou drafted RER’s legal and technical arguments with significant input from the RER’s FIRPTA Working Group.

Treasury Acknowledges Industry Concerns

  • In its release, Treasury cited the practical difficulty of tracing upstream ownership without reliable data and acknowledged the legal uncertainty, operational complexity, and potentially negative effect on investment in U.S. real estate generated by the 2024 regulations.
  • The preamble also notes that stakeholders argued the look-through rule conflicted with congressional intent, as Section 897(h)(4)(B) does not include explicit corporate look-through provisions.

Roundtable on the Road

  • RER SVP and Counsel Ryan McCormick discussed the recent FIRPTA developments and other real estate and pass-through tax policy issues this week at NYU’s Institute on Federal Taxation in New York City.
  • His presentation highlighted key provisions of the One Big Beautiful Bill Act,  potential future legislation, implementation priorities, and major tax litigation affecting partnerships and real estate.

RER will continue to engage with Treasury on areas where further guidance or regulatory changes are needed.

Government Shutdown Stalemate Deepens, Raising CRE Concerns

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The federal government remains shut down for a second week as partisan gridlock over spending and health care continues in Washington. (Punchbowl News Oct. 15, 17 | Roll Call Oct. 14)

State of Play

  • Republicans and Democrats remain deadlocked, with no signs of progress toward reopening the government. The Senate on Thursday failed for the 10th time to advance a short-term funding bill passed by the House since the shutdown began Oct. 1. (NPR, Oct. 16)
  • In a 51–44 vote, senators again rejected a GOP-led continuing resolution (CR) that would have funded the government through Nov. 21. (CNBC, Oct. 15)
  • Democrats continue to insist that any funding measure must include an extension of enhanced Affordable Care Act (ACA) subsidies that are set to expire at the end of the year.
  • GOP leaders also remain at a standstill until the government reopens—Speaker Mike Johnson (R-LA) refusing to recall the House without a funding deal, and Senate Majority Leader John Thune (R-SD) said discussions on health care tax credits can begin only after the shutdown ends. (NPR, Oct. 9 | PoliticoPro, Oct. 6)
  • The Trump administration’s plan to lay off more than 10,000 federal employees during the shutdown has been temporarily blocked after a judge ruled the firings likely exceeded executive authority. (Roll Call, Oct. 15 | Bloomberg, Oct. 16)

Path Forward

  • As the shutdown enters its third week, lawmakers are weighing several potential exit paths, including a short-term CR, a handful of Democrats could defect to advance the GOP bill, a Trump–Schumer compromise, or a bipartisan “dual-vote” plan led by Sen. Jeanne Shaheen (D-NH) to reopen the government and extend ACA subsidies for one year. (Punchbowl News, Oct. 16 | Bloomberg, Oct. 14)
  • The White House appears prepared for a prolonged shutdown, redirecting funds to sustain key programs and betting that public pressure will eventually force Democrats to adjust strategy. (Punchbowl News, Oct. 16)
  • Lawmakers on both sides warn the economic fallout will deepen if the impasse stretches into November, threatening programs vital to housing, infrastructure, and financial markets.

CRE Impact

  • Economy: Each week the government remains shut down is projected to cost the U.S. economy roughly $7 billion, according to EY-Parthenon Chief Economist Gregory Daco. (BisNow, Oct. 12)
  • GDP: U.S. gross domestic product could fall by 15 to 20 basis points for each week the shutdown persists, according to Marcus & Millichap, which noted that the immediate impact on CRE remains limited for now. (Marcus & Millichap)
  • Housing: The U.S. Department of Housing and Urban Development (HUD) reportedly has confirmed federal funding for rental voucher assistance is available through the end of 2025, consistent with HUD’s contingency plan for certain programs to continue operations during the shutdown. (NAHRO, Oct. 16 | Roundtable Weekly, July 25)
  • Energy: EPA’s Portfolio Manager building energy benchmarking tool remains up and running. However, the agency’s website explains that ENERGY STAR resources “will not be updated regularly” during the lapse in appropriations and “many services may not be available.”
  • NFIP: The lapse of the National Flood Insurance Program (NFIP) continues to delay property closings and financing in flood-prone regions. While existing claims can still be paid, new policies and renewals cannot be issued, complicating sales and dampening confidence in affected markets. (Roundtable Weekly, Oct. 10)
  • Sen. John Kennedy (R-LA) is urging GOP leaders to hold a stand-alone vote to reopen the NFIP. Speaker Johnson and Majority Leader Steve Scalise (R-LA) have resisted, saying the program will be reauthorized once the government reopens. (PoliticoPro, Oct. 16)
  • RER supports a long-term, sustainable NFIP reauthorization to avoid recurring market disruptions. (Roundtable Weekly, Sept. 19)

RER continues to urge Congress to act responsibly to reopen the government and restore critical housing, insurance, and economic programs essential to real estate investment and growth.

Senate Passes Bipartisan ROAD to Housing Act

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The U.S. Senate passed the Renewing Opportunity in the American Dream (ROAD) to Housing Act of 2025 (S. 2651) on Oct. 9, as part of its version of the National Defense Authorization Act (NDAA)—marking the first bipartisan, comprehensive housing package advanced in more than a decade. (MultiFamily Dive, Oct. 15)

ROAD to Housing Act

  • Introduced by Senate Banking Committee Chair Tim Scott (R-SC) and Ranking Member Elizabeth Warren (D-MA), the bipartisan bill passed the committee 24–0 in July before its inclusion in the NDAA. (CRE Daily, Oct. 14)
  • The legislation builds on years of bipartisan committee work, stakeholder engagement, and multiple hearings. It focuses on streamlining regulations, incentivizing construction, modernizing housing finance and disaster-recovery programs, and supporting vulnerable populations such as veterans and the homeless. (HousingWire, Oct. 10)
  • The bill incentivizes states and cities to boost housing supply by cutting red tape, streamlining federal inspections, and eliminating duplicative regulations. (The Hill, July 29)
  • Key pillars of the bill focus on expanding and preserving supply, improving affordability and access, enhancing accountability and fiscal responsibility, and strengthening oversight of federal housing programs. (Press Release, Oct. 9 | Roundtable Weekly, Aug. 1)
  • The legislation contains more than 40 provisions contributed by every committee member and reflects a coordinated effort to modernize housing policy at the federal level. (Politico, July 29 )
  • Sen. Warren said, “This landmark legislation—the first of its kind in more than a decade—takes important steps to boost the nation’s housing supply, improve housing affordability, and increase oversight and efficiency of federal regulators and housing programs. I look forward to working with my colleagues in the House to get the bill to the President’s desk.” (Press Release, Oct. 9)

What’s Next

  • The bill now heads to the House of Representatives for consideration before going to the President’s desk to be signed into law.

Roundtable on the Road

  • This week, RER President and CEO Jeffrey D. DeBoer was a featured speaker at NYU Stern’s Chen Institute National Apartment Finance & Investment Summit, where he was interviewed by Gregg Gerken (Former Head of Commercial Real Estate and Executive Vice President, TD Bank) on national policy outlook, housing affordability, housing finance reform and agency privatization, and capital availability.
  • “Safe, affordable housing is essential to strong communities and a healthy economy,” said DeBoer. “The nation’s chronic underbuilding has created an affordability crisis that demands coordinated action. The ROAD to Housing Act that recently passed reflects the kind of public-private collaboration needed to address the housing shortage by aligning federal incentives with local action to unlock private capital, expand supply, and strengthen communities nationwide.”

RER will continue engaging with policymakers and industry leaders to promote bipartisan solutions and regulatory reforms that expand housing supply, improve affordability, and strengthen economic stability.

Roundtable Urges Treasury to Clarify, Confirm Eligibility of Real Estate for Bonus Depreciation under the OB3 Act

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The Real Estate Roundtable (RER) wrote to the Treasury Department this week, urging guidance to ensure the One Big Beautiful Bill (OB3) Act’s restored 100 percent bonus depreciation provision is successful in spurring real estate investment, job creation, and economic growth. (Letter, Oct. 17)

Background

  • The Tax Cuts and Jobs Act of 2017 capped taxpayers’ ability to deduct their interest expense on business debt. At the same time, the law created an exception that allows real estate businesses to fully deduct their interest expense if they make a “real property trade or business (RPTOB) election.”
  • Taxpayers who make the RPTOB election are subject to the alternative depreciation system and ineligible for bonus depreciation.
  • By modifying the business interest limitation rules, the OB3 Act made it easier for property owners to fully deduct their business interest and qualify for bonus depreciation. However, the legislation did not expressly clarify that existing property owners could revoke or reverse a prior RPTOB election.
  • Guidance is needed to ensure taxpayers’ ability to change a RPTOB election and claim the full benefit of the bonus depreciation provision. (Letter, Oct. 17)

Why It Matters

  • The restoration of 100 percent expensing for capital expenditures, including tenant and nonresidential property improvements, is among the most significant provisions in the OB3 Act.
  • The Tax Foundation estimates bonus depreciation will boost long-run GDP by 0.6 percent and generate the equivalent of 145,000 jobs. (Tax Foundation, July 4)
  • In the absence of additional tax guidance, however, many taxpayers will not qualify for bonus depreciation with respect to their property improvements.

RER Recommendations & Perspective

  • Ample precedent and authority exist for Treasury to clarify that, in light of the changes made in the OB3 Act, taxpayers can amend and change their prior RPTOB elections. (See Revenue Procedure 2020-22, issued following passage of the CARES Act of 2020)
  • With clear implementing rules, bonus depreciation “will facilitate the modernization and repurposing of real estate assets, including underutilized office buildings, shopping centers, hotels, and mixed-use properties,” the RER submission stated.
  • “Small businesses will benefit from the ability to immediately expense their leasehold improvements,” the letter continued. “The capital expenditures spurred by expensing will create new spaces for commerce to flourish, boost property values, and strengthen communities by increasing local tax revenue critical for public services like schools and law enforcement.”

The submission from RER President and CEO Jeffrey DeBoer was addressed to Treasury Assistant Secretary for Tax Policy and Acting IRS Chief Counsel Kenneth J. Kies. RER’s Tax Policy Advisory Committee (TPAC) is continuing to review and develop recommendations for Treasury with respect to the implementation of the monumental tax legislation signed into law this summer.

Flood Insurance Lapse Highlights Need for Long-Term Reform

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The National Flood Insurance Program (NFIP) expired Oct. 1 as partisan gridlock in Washington dragged into a second week, halting new policies and renewals for millions of Americans and real estate transactions in flood-prone areas.

State of Play

  • The NFIP’s lapse stems from the broader government shutdown fight, with each party blaming the other for inaction. (E&E News, Oct. 8)
  • House Republicans say Democrats have repeatedly blocked their short-term funding bill, which includes a seven-week NFIP extension. Democrats counter that GOP leaders have refused to hold a stand-alone vote on reauthorization while keeping the House largely in recess.
  • Speaker Mike Johnson (R-LA) said the NFIP “will be reauthorized in due course,” but called the program’s lapse one of several “leverage points” in the broader negotiations. (E&E News, Oct. 8)
  • Senate Majority Leader John Thune (R-SD) on Tuesday cited the NFIP in floor remarks for the first time since the shutdown began, calling it one of several programs Democrats are stalling by opposing the GOP’s plan to reopen the government.
  • Meanwhile, FEMA has paused NFIP operations, unable to issue new policies or renewals. The program also cannot ensure payment of claims if major flooding occurs during the shutdown.

Roundtable Advocacy

  • The Real Estate Roundtable (RER) continues to urge Congress to enact a sustainable, long-term NFIP reauthorization with appropriate reforms.
  • A robust and stable program is essential for residential markets, catastrophe insurance capacity, and the broader economy. (Roundtable Weekly, Sept. 19)
  • Lawmakers from both parties have long called for an overhaul and signaled interest in pursuing longer-term reforms to the program.
  • The rising cost of insurance premiums due to the growing number of billion-dollar natural disasters reinforces the importance of the NFIP.
  • While Congress has typically renewed the NFIP retroactively after past lapses, there is no guarantee this time. A delayed reauthorization could further disrupt real estate markets and delay policy effective dates. (NAHB, Oct. 1)

Housing Impact

  • The National Association of Realtors (NAR) estimates the lapse could stall or cancel about 1,400 home sales per day until the NFIP resumes operations. (NYT, Oct. 9)
  • “Each day that passes during the shutdown, potential real-life impacts will be felt in America’s housing market, which accounts for nearly 20% of the US economy,” said Shannon McGahn, (EVP and Chief Advocacy Officer, NAR) (Bloomberg, Oct. 9)
  • NFIP provides $1.3 trillion in flood insurance to 4.7 million policyholders across 23,000 communities. It underpins nearly 500,000 home sales annually, supports 1 million jobs, and contributes $70 billion to the U.S. economy. (NAR, Oct. 7)
  • While some private insurers are expanding their offerings, they still represent only a fraction of the market—and typically charge higher premiums, adding costs for homebuyers. (Bloomberg, Oct. 9)

Congressional leaders have vowed to revisit flood insurance reauthorization once the government restores funding. RER will continue to advocate for a long-term NFIP solution.