The Senate Appropriations Committee on Thursday advanced bills to fund rental assistance, transit-oriented development loans, ENERGY STAR, and other key programs important to real estate, for the federal fiscal year that starts Oct. 1. The measures come as congressional leaders rush to complete appropriations work ahead of the Sept. 30 funding deadline to avoid a government shutdown.

HUD Programs        

• The full Senate Appropriations committee passed the “T-HUD” bill to fund the Departments of Transportation and Housing and Urban Development, on a strong bipartisan vote (27-1). (Senate Press Release, July 24) (PoliticoPro, July 24)

• The bill allocates $73.3 billion overall to HUD—maintaining or increasing funding for rental assistance, homelessness services, and economic development. (Bill Summary | Text )

• Project-based rental assistance would receive $17.8 billion, a roughly $900 million increase above FY25 enacted levels. This funding provides a full renewal of housing contracts serving about 1.2 million households.

• Tenant-based rental assistance would receive $33.9 billion to renew Section 8 vouchers. (THUD bill report, p. 115) The Senate’s funding levels contrast with the Trump Administration’s May 2 proposal to significantly cut both tenant- and project-based assistance.

• The Community Development Block Grant (CDBG) program would receive $3.1 billion, with $1.2 billion allocated for the HOME Investment Partnership program.

• Last week, the House Appropriations Committee passed its version of T-HUD funding (Bill Text | Summary). The full House of Representatives has yet to vote on it. (Roundtable Weekly, July 18)

DOT Programs

• The U.S. Department of Transportation (DOT) would receive $26.5 billion under the Senate T-HUD bill. (Senate press release, July 24).

• This includes a modest increase (over current FY levels) for the Build America Bureau (BAB), which oversees the TIFIA/RRIF federal loan programs. These programs can provide favorable, long-term, low-interest federal loans for transit-oriented developments, including housing and property conversions near mass transit. (FAQs)

• The funding bill’s underlying report (p. 22) explains that DOT and HUD shall establish a “task force” to improve the TIFIA/RRIF loan process, with a report due back to the House and Senate on ideas for removing “administrative and statutory barriers” to access financing.

• RER has long advocated for policies to streamline TIFIA/RRIF underwriting. (Roundtable Weekly, Dec. 1, 2023; April 19, 2024; Letter, April 15, 2024).

EPA – ENERGY STAR

• Senate appropriators on Thursday also passed a bill to fund EPA and related agencies. The strong bipartisan vote (26-2) approved a $600 million increase over the House version that passed earlier this week. (PoliticoPro, July 24) (Bill Summary | Text)

• The Senate’s bill text specifies $36 million next fiscal year, for the popular ENERGY STAR program, recognizing leadership in energy-efficient buildings, homes, and products.

• The underlying report language for the Senate bill states that the Appropriations Committee “recognizes the value of and continues to support ENERGY STAR” – with a directive for EPA to “report back” on its plans for the program’s future implementation.

• On the House side on Tuesday, the Appropriations Committee likewise showed support for ENERGY STAR. It passed a “manager’s amendment” on voice vote, instructing EPA to fund ENERGY STAR in FY’26. (PoliticoPro, July 22)

• RER has long urged the “business case” to support the ENERGY STAR program. It is working with multi-industry partners in the real estate, manufacturing, consumer tech, and retail sectors to explain to Congress and the Administration why ENERGY STAR is critical to the national “energy dominance” agenda. (Roundtable Weekly, June 6; May 23).  

Agency Reorganizations

• It is not yet clear how any FY’26 funds appropriated by Congress may interact with particular internal plans from federal agencies to reorganize and eliminate programs.

• An 8-1 decision in July by the U.S. Supreme Court allows the Trump administration to move forward with large-scale staff reductions and structural overhauls across 19 federal departments. (Politico, July 8)

• As part of government-wide efforts triggered by the DOGE Executive Order, restructuring plans and layoffs are under consideration at the EPA. (Politico, July 17)

What’s Next

• Senate Majority Leader John Thune (R-SD) has indicated that he wants to sign as many spending bills into law as possible, then use a short-term stopgap measure to cover the remaining agencies and avert a shutdown before the Sept. 30 deadline. (PoliticoPro, July 23)

• Any specific agency reorganization and staff layoff plans may be released in the coming weeks.

RER will continue to monitor all developments on matters of appropriations and federal agency reorganizations relevant to real estate.

The intersection of housing shortages, escalating construction costs, and policy uncertainty is defining the commercial real estate (CRE) landscape as the second half of 2025 unfolds. Recent bipartisan legislative action on housing, along with fresh economic data, underscores the sector's significant headwinds and potential opportunities.

Bipartisan Action on Housing Supply

• Lawmakers introduced bipartisan legislation this week aimed at reducing local regulatory barriers to housing production. (ConnectCRE, July 24)

• The Identifying Regulatory Barriers to Housing Supply (IRBHS) Act, championed by Sens. Todd Young (R-IN) and Brian Schatz (D-HI), along with Reps. Mike Flood (R-NE) and Brittany Pettersen (D-CO), targets restrictive local zoning rules and promotes transparency in community development. (HousingWire, July 23)

• Rep. Flood (R-NE) emphasized the bill's role in addressing "onerous local zoning policies," aiming to facilitate increased housing construction. (PoliticoPro, July 23)

• The legislation, previously known as the Yes in My Back Yard (YIMBY) Act, was passed by the House in 2018 and 2020 but stalled in prior sessions.

• Next week, the Senate Banking Committee will hold its first bipartisan markup of housing legislation in over a decade, considering the Renewing Opportunity in the American Dream to Housing Act of 2025. The comprehensive measure aims to boost housing affordability, supply, and accountability. (PoliticoPro, July 25)

Housing Market Warning Signals

• Moody’s Analytics Chief Economist Mark Zandi declared a "red flare" for housing this week, noting persistent mortgage rates near 7% and declining affordability.

• He cautioned that housing could soon become a significant barrier to broader U.S. economic growth. (GlobeSt., July 22)

CRE Market Pressures

• JLL’s Midyear Update presents a cautious outlook for CRE, highlighting stalled construction pipelines and lowered growth expectations for 2026, driven by uncertainties surrounding tariffs, labor market disruptions, and elevated interest rates. (JLL Midyear Update; Global Real Estate Outlook 2025)
  
  
• JLL reports that material costs are estimated to rise 7 to 12 percent for the remainder of 2025, and construction labor growth is forecasted at just 1 percent, well below the average of 3 percent in recent years. (Commercial Property Executive, July 21)

• Contractors report increased absenteeism, worsened labor shortages, and project delays exacerbated by intensified deportation enforcement.

• RER Member Hamid Moghadam (CEO, Prologis) warned that “construction costs are going to go up radically,” saying, “all of this immigration stuff is putting more pressure on construction.” (GlobeSt., July 21)

• Despite caution, some sectors remain bright spots, such as data centers, advanced manufacturing, and multifamily housing. Rebuilding efforts following natural disasters in states like California and Florida have also contributed to pockets of localized demand.

• Federal Reserve policy uncertainty continues to weigh on CRE activity, exacerbated by recent tensions between the Trump administration and Fed Chair Jerome Powell. Markets are closely watching for clarity from the Fed's July 29–30 meeting. (Financial Times, July 21) (NPR, July 24)
  

RER remains engaged in advocacy efforts to support policies enhancing housing supply, affordability, and economic stability. For more information, see our latest fact sheet on housing policy developments.