House Speaker Mike Johnson (R-LA) met his self-imposed Memorial Day deadline as dissenting factions within the caucus reached an agreement on a series of last-minute changes, culminating in a razor-thin vote (215-214) on the One Big Beautiful Bill Act early Thursday morning. The budget reconciliation measure—which has wide implications for CRE—now goes to the Senate, where a similar tug of war could play out. (Ways & Means Press Release, May 22)

State of Play

• The House Budget Committee voted late Sunday night to advance President Donald Trump's One Big Beautiful Bill Act after several GOP hard-liners on the Committee blocked the measure from moving forward last Friday. (ABC News, May 19)

• President Trump traveled to Capitol Hill Tuesday morning to deliver a message to House Republicans impeding the massive bill, a critical part of his domestic agenda: stop fighting and get it done as soon as possible. (NBC News, May 20)

• The chamber took action, clearing the sprawling package in an early-morning vote Thursday after days of marathon meetings, intense negotiations that spanned both ends of Pennsylvania Avenue, and a series of swift changes to the bill, which were crucial in coalescing Republicans around the measure. (The Hill, May 22)

• House Ways and Means Chair Jason Smith (R-MO) said that he’s been working “hand in glove” with Majority Leader John Thune (R-SD) and Senate Finance Committee Chair Mike Crapo (R-ID) on the tax package and had crafted it intentionally so it could survive the Senate’s rules. “I think 90 to 95 percent of the bill is going to be pretty much very similar,” he said previously. (Bloomberg, May 22)

Implications for CRE

• The legislation includes an extension of the 2017 tax cuts, while maintaining the full deductibility of state and local business property tax deductions (also known as “Business SALT”) and preserving the current treatment of carried interest, two key priorities for The Roundtable in the current tax negotiations.

• Additionally, the pass-through deduction under Section 199A would increase from 20 percent to 23 percent for qualifying income, including REIT dividends and the real estate operating income of partnerships and other pass-through entities. A late addition to the bill will allow REITs greater flexibility in their use of taxable REIT subsidiaries. (The Hill, May 21)

• The bill extends the Opportunity Zone (OZ) tax incentives through 2033, with several updated eligibility criteria and new benefits for rural areas. This legislation also calls for a new round of OZ designations by state governors. (Mortgage Point, May 22)

• Other positive developments include an expansion of the low-income housing tax credit and the reinstatement of 100 percent expensing for qualifying leasehold and nonresidential property improvements.

• Now, the Senate will debate and craft its version of the bill, which it aims to pass by July 4. (The Hill, May 21; CNBC, May 22)

The Roundtable's Position

• RER expressed support for the House’s budget reconciliation measure. The extension of TCJA policies, preservation of property tax deductibility, continued capital gains treatment for carried interest, increased investment in affordable housing, and enhanced pass-through deduction are all positive developments. 

• “Taken as a whole, the tax proposals in the Chairman’s amendment will spur needed investment in our nation’s housing supply, strengthen urban and rural communities, and grow the broader economy to the benefit of all Americans,” said RER President and CEO Jeff DeBoer in a recent statement following the House Ways and Means Committee’s bill markup last week.

What’s Next       

• The action on the tax and fiscal legislation now shifts to the U.S Senate where Republicans are operating under similar tight margins.

• Senate Republican leaders have not yet decided whether they will mark up the reconciliation bill in the various committees of jurisdiction. Finance Chairman Crapo could bring a substitute amendment straight to the Senate floor sometime in June.

RER will work to ensure that these hard-fought victories are protected in any final tax package.

Lawmakers put energy policy under a microscope this week, as Environmental Protection Agency (EPA) Administrator Lee Zeldin appeared before Congress regarding the agency’s FY2026 budget request and addressed concerns over the future of the ENERGY STAR program. Additionally, significant changes to the Inflation Reduction Act’s (IRA) energy tax credits were included in the One Big Beautiful Bill that passed in the House on Thursday morning.

Roundtable Advocacy

• This week, The Real Estate Roundtable (RER) joined a coalition of real estate organizations in writing to key members of the House and Senate committees to urge continued funding for the ENERGY STAR program. (Letter)

• As House appropriators begin drafting FY2026 spending bills, the letter urged committees to maintain funding for ENERGY STAR—highlighting the program’s bipartisan value and pro-business message. (PoliticoPro, May 21)

• The letter emphasized ENERGY STAR’s value as a voluntary, market-based public-private partnership that helps building owners and managers benchmark building performance, reduce utility costs, and bolster grid reliability. (Roundtable Weekly, May 16)

• The coalition letter built upon earlier communications RER and partner organizations sent to the EPA and Department of Energy (DOE) opposing a potential phaseout of the program’s foundational benchmarking platform, Portfolio Manager. (Letters: May 14 and April 4)

Hearings This Week

• EPA Administrator Zeldin appeared before the House and Senate panels this week to defend the EPA’s FY2026 budget request. (E&E News, May 21)

• Lawmakers voiced concerns about EPA plans to wind down or defund ENERGY STAR. (Rep. Paul Tonko (D-NY) Press Release, May 20)

• Rep. Darren Soto (D-FL) questioned Zeldin directly about the administration’s plans. In response, Zeldin claimed that ENERGY STAR is not a statutory obligation. (E&E News, May 21). However, the real estate coalition’s letter to Congress this week, cites multiple examples of bipartisan legislation that authorizes ENERGY STAR as a federal program.

• On Thursday, Senators Peter Welch (D-VT) and Jeanne Shaheen (D-NH) led 20 colleagues in a letter to EPA Administrator Lee Zeldin and Energy Secretary Christ Wright, urging the Trump administration to reverse its plan to eliminate the ENERGY STAR program—citing its bipartisan support, billions in consumer energy savings, and nearly 800,000 U.S. jobs it helps sustain. (Sen. Welch Press Release, May 21)

IRA Clean Energy Tax Credits

• The One Big Beautiful Bill Act passed by the House Thursday would end IRA tax incentives for clean energy projects (like solar and storage) earlier than initially proposed. (Bloomberg, May 21)

• Late-night modifications to the bill, accelerate the repeal of the clean energy production (45Y) and investment (48E) tech-neutral credits, limiting their eligibility to only projects that have started construction within 60 days of the bill’s enactment and which are put into service before January 1, 2029. (Utility Dive, May 22) 

• The initial version of the bill proposed by House Republicans had a longer phase-out time, which would have allowed many of the IRA’s energy tax credits to remain until 2032. (Bloomberg, May 21)

• The Senate may take a more measured approach. Several Senate Republicans have voiced support for maintaining IRA incentives that bolster U.S. manufacturing, enhance grid reliability, and support domestic clean energy production. (Roundtable Weekly, April 25; Semafor, May 22)

RER supports an “all of the above” energy efficiency, generation, and storage agenda and will continue to engage lawmakers and share member perspectives on effective energy policies that strengthen industry and economic growth.

The nation’s housing policy landscape is shifting rapidly as the Trump administration and Congress push forward on multiple fronts—spanning GSE reform, regulatory rollback, and bipartisan legislative efforts to expand affordable housing tools. The Real Estate Roundtable (RER) remains engaged on these developments, reinforcing its priorities through direct advocacy and coalition efforts.

GSE Reform

• This week, President Trump said he’s “giving very serious consideration” to taking government sponsored enterprises (GSEs) Fannie Mae and Freddie Mac public—reigniting debate over the future of the mortgage giants. (WSJ, May 21)

• “I am giving very serious consideration to bringing Fannie Mae and Freddie Mac public,” Trump posted Wednesday on Truth Social. Trump also said he would consult with Treasury Secretary Scott Bessent and Commerce Secretary Howard Lutnick, as well as the GSEs’ chief regulator, Federal Housing Finance Agency head William Pulte. (Politico, May 21)

• The GSEs have been in federal conservatorship since 2008, and Congressional action would likely be required to change their legal status.

• While no active legislative proposals exist, some GOP lawmakers are discussing the sale of the government's stakes in the GSEs as a potential offset for extending tax cuts. (Politico, May 21)

• RER supports sensible GSE reform that balances taxpayer protection with ensuring financial stability and continued liquidity for ownership, rental housing, and underserved markets.

Roundtable Advocacy

• This week, RER joined a coalition of 15 national real estate organizations urging the Department of Labor to repeal and revise its 2023 Davis-Bacon rule. (Letter, May 20)

• In the letter sent to Department of Housing and Urban Development (HUD) Secretary Scott Turner and Labor Secretary Lori Chavez-DeRemer, the coalition applauded the administration’s focus on affordability and supply, and called for an end to outdated wage classifications that drive up project costs.

• The current rule increases housing construction costs by up to 20% and deters developer participation in federally funded projects.

• The letter recommends suspending enforcement and launching a formal rulemaking to streamline compliance and reduce regulatory risk.

• In a separate letter, RER voiced strong support for the bipartisan Housing Affordability Act introduced (S.1527) by Senators Ruben Gallego (D-AZ) and Dave McCormick (R-PA) to modernize the FHA multifamily insurance program. (Letter, May 13)

• Outdated statutory limits, unchanged since 2003, are suppressing the number of insurable housing units and acting as a barrier to middle-income housing development.

• Updating the limits would unlock private capital, free up federal resources, and bring the program in line with modern construction costs.

LIHTC Expansion Clears the House

• The reconciliation bill that passed in the House this week includes major provisions from the Affordable Housing Credit Improvement Act (AHCIA), marking the most significant increase in Low-Income Housing Tax Credit (LIHTC) resources in 25 years. (Affordable Housing Finance, May 22)

• Although the entire bill was not incorporated into the package, the elements that were included still amount to a significant expansion of the program.

• The elements included in the bill—increase the 9% credit volume cap, lower the bond financing threshold to 25% for 4% housing credit projects, and authorize up to a 30% basis boost for rural and tribal developments.

Federal Land Sales to Expand Housing Supply

• HUD Secretary Scott Turner and Interior Secretary Doug Burgum are advancing the administration’s plan to sell underutilized federal land for new housing construction. (Bloomberg, May 22)

• Their coordinated effort aims to unleash more of the government’s 640 million acres for development—particularly affordable and workforce housing. (PoliticoPro, May 20)

RER will continue to advocate for smart, market-based solutions that expand housing supply, reduce regulatory barriers, and support investment across the full spectrum of the nation’s housing needs.

Commercial real estate executives report a decline in market confidence this quarter, as policy uncertainty, rising costs, and investor caution cloud the outlook, according to The Real Estate Roundtable’s Q2 2025 Sentiment Index released today.

Roundtable View

• The quarterly Sentiment Index, measuring executive perceptions of market conditions, asset values, and capital availability, declined to an overall score of 54, down 14 points from last quarter. The Current Conditions Index dropped to 50, reflecting a 15-point decline, while the Future Conditions Index decreased by 12 points, settling at 58.

• The Overall Index is scored on a scale of 1 to 100 by averaging Current and Future Indices; any score over 50 is viewed as positive.

• RER President and CEO Jeffrey DeBoer said, “While respondents note early signs of market stabilization and improved transactional discipline, lingering concerns over U.S. trade policies and other economic headwinds are tempering optimism for the remainder of 2025. The office sector remains under pressure, but is experiencing a gradual rebound as return-to-office trends continue to shift closer to pre-pandemic patterns.”

• He added, “Uncertain tariff policies are driving up construction costs and weighing on long-term investment decisions. At the same time, the Federal Reserve’s decision to hold interest rates steady is slowing capital formation and delaying needed transactions. We need pro-growth economic policies that encourage productive investment, strengthen communities, and promote long-term stability. Extending and making the 2017 Tax Cuts and Jobs Act (TCJA) provisions permanent, along with advancing incentives to address our nation’s housing supply shortage, are crucial to help achieve these goals.”

• In the May edition of ULI’s Economist Snapshot, RER’s Senior Vice President Clifton E. “Chip” Rodgers Jr. weighed in on how rising tariffs and trade uncertainty are impacting commercial real estate—from delayed development timelines to rising construction costs and reduced foreign investment. (ULI, May 13)

Topline Findings

• The Q2 2025 Real Estate Roundtable Sentiment Index registered an overall score of 54, a decrease of 14 points from the previous quarter. The Current Index registered at 50, a 15-point decrease compared to Q1 2025. The Future Index posted a score of 58 points, a decrease of 12 points from the previous quarter, reflecting uncertainty around policy direction, rising costs, and execution risk. While market sentiment remains cautious, respondents are seeing early signs of stabilization and improved transactional discipline. Nevertheless, expectations for improvement have softened compared to last year, and many investors are still hesitant to re-engage.

• Market conditions remain mixed, with general uncertainty, along with sector and geographic bifurcation, driving sentiment. 37% of respondents believe that general market conditions are worse now compared to the same period last year, and 37% of respondents believe that general market conditions are better than this time last year.

• Close to half (47%) of Q2 survey participants expect general market conditions to show improvement one year from now, while 20% of Q2 participants expect general market conditions to be somewhat worse in a year.

• Logistics and high-quality multifamily remain bright spots, while hospitality and office—particularly commodity space—continue to face significant challenges. From a geographic standpoint, the Midwest is showing relative resilience, whereas sentiment around the Sunbelt reflects concern over elevated supply and near-term softened demand.

• 42% of respondents believe asset values are roughly unchanged compared to a year ago. The remaining respondents are divided, with 22% believing asset prices have increased and 36% believing they have declined. Looking ahead, the outlook is cautious: 38% expect asset prices to remain stable over the next year, while another 38% anticipate a slight decline.

• Perceptions of equity capital are widely varied, though 34% of respondents believe the availability of equity capital is better than it was a year ago. Sentiment around debt capital has brightened, as 43% said the availability of debt capital has improved from last year. Looking forward, 45% of respondents believe that equity capital availability will be better in one year and 39% believe debt capital availability will be better in one year.

Data for the Q2 survey was gathered by Chicago-based Ferguson Partners on RER’s behalf. Read the full Q2 report here.