Tag: Affordable Housing

New Lumber Tariffs Spark Housing Affordability Concerns

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The Trump administration announced new trade measures this week aimed at building materials. The plan imposes a 10% duty on imported softwood lumber and a 25% tariff on kitchen cabinets and vanities—set to rise to 50% in 2026. The added cost burden threatens to ripple through the housing market, raising barriers to affordability at a time of heightened demand. (White House, Sept. 29) (NYT, Oct. 2)

State of Play

  • The new tariffs come on top of existing surcharges, marking a sharp escalation in trade measures against foreign suppliers of housing and construction products. (GlobeSt. Oct. 1)
  • President Trump’s tariff proclamation found that current wood imports “are weakening our economy, resulting in the persistent threats of closures of wood mills and disruptions of wood product supply chains” and putting at risk the United States’ ability “to meet demands for wood products that are crucial to the national defense and critical infrastructure.” (White House Action, Sept. 29)
  • Analysts warn that the tariffs could exacerbate the housing shortage by slowing construction, and, combined with earlier steel and aluminum tariffs, undermine the momentum that Fed rate cuts might otherwise provide. (NYT, Oct. 2)
  • The U.S. imports roughly one-third of the lumber it consumes because domestic production cannot meet demand. Canada supplies nearly 85% of U.S. lumber imports. (NAHB, Sept. 30)

CRE & Affordable Housing

  • Tariffs may present several challenges for commercial real estate, including increased construction costs, potential project delays, and heightened uncertainty among investors. (CBRE, March 19 | Roundtable Weekly, April 4)
  • “These new tariffs will create additional headwinds for an already challenged housing market by further raising construction and renovation costs,” said National Association of Home Builders (NAHB) Chairman Buddy Hughes.
  • Builders caution the measures will add to affordability pressures for renters and homebuyers already facing tight supply. (CRE Daily, Oct. 1)
  • Last month, it was reported that President Trump may declare a national housing emergency this fall. (Roundtable Weekly, Sept. 12)
  • As part of the broader effort to address the nation’s housing shortage, property conversions are gaining momentum. Manhattan alone launched 4.1 million square feet across 15 projects through August 2025, the fastest pace since 2008, according to a recent Cushman & Wakefield report. (GlobeSt., Oct. 2)
  • RER urges federal policymakers to support incentives for these transformative projects, helping to meet the nation’s growing housing demand. (RER Annual Report – Housing 2025)

RER will continue to engage with policymakers to reduce regulatory burdens and eliminate other obstacles that are impeding development and expand America’s housing infrastructure.

Government Shutdown: What It Means for CRE

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The federal government shut down on Wednesday—the first lapse since 2019—with no deal in sight. Both chambers are at an impasse after dueling stopgap funding bills failed again this week. (AP News, Oct. 2)

State of Play

  • Senate Democrats blocked Republicans’ “clean” Nov. 21 continuing resolution (CR). Republicans rejected Democrats’ version that included extending enhanced Affordable Care Act subsidies and reversing Medicaid cuts.
  • Senate Majority Leader John Thune (R-SD) and Minority Leader Chuck Schumer (D-NY) may meet Friday in their first one-on-one since the standoff began. Another round of votes is planned for Friday. (Punchbowl News, Oct. 2)
  • If Democrats block the GOP plan again, Majority Leader Thune is expected to adjourn the Senate until Monday, canceling Saturday votes, and force another vote on Monday. (Punchbowl News, Oct. 2)

CRE Impact

  • NFIP: The National Flood Insurance Program (NFIP) cannot issue new policies or renewals during the shutdown, threatening thousands of real estate transactions. The Real Estate Roundtable (RER) supports a long-term, sustainable NFIP reauthorization to avoid recurring market disruptions. (Roundtable Weekly, Sept. 19)
  • Senate Banking Committee Chair Tim Scott (R-SC) “remains committed” to funding the program and is “optimistic” Democrats will join Republicans to prevent a lapse in coverage during peak hurricane season, his spokesperson said. (Politico, Sept. 30)
  • Energy: The ENERGY STAR program has halted partner application processing, product list updates, and specification releases—stalling efficiency certifications important to building owners and tenants. Meanwhile, it remains unclear how the shutdown will affect EPA Administrator Lee Zeldin’s broader reorganization and regulatory timeline. (PoliticoPro, Sept. 30, Oct. 1 | NAHB, Oct. 1)
  • Housing: HUD is unable to access certain funds used to prevent evictions in its Tenant-Based Rental Assistance Program. Affordable housing initiatives also face delays due to the furloughing of program staff. (Politico, Sept. 30)
  • Construction: Fallout from the shutdown is also reverberating through the construction sector, where contractors warn that halting federal projects will ripple into private markets by raising costs and eroding confidence. (UtilityDive, Oct. 1)
  • Tax Policy & Treasury: Despite the shutdown, Treasury has said it will continue implementing President Trump’s tax law and deregulatory agenda, relying on multi-year funding streams. Its tax policy office will remain active, advancing the president’s tax cuts and regulatory rollbacks. Other Treasury operations—including debt management, collections, and oversight of financial markets will also continue. (PoliticoPro, Sept. 29)
  • “Government shutdowns and temporary extensions of essential programs like the NFIP create avoidable uncertainty that disrupts real estate markets and undermines economic confidence,” said RER President & CEO Jeffrey DeBoer. “Congress should act responsibly by providing long-term solutions that protect communities and the American people, encourage investment, and sustain growth.”

As the shutdown continues, mounting strain on real estate transactions, insurance coverage, and investment planning will intensify pressure on Congress to resolve the impasse.

Fed Cuts Rates in Welcome Move for CRE

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On Wednesday, the Federal Reserve reduced its benchmark interest rate by 25 basis points, marking the first rate cut since December 2024. Central bank officials also projected two additional rate reductions this year, citing growing concerns about labor market softening and economic headwinds.

Fed’s Decision

  • The Fed’s move brings its target federal funds rate to a range of 4 percent to 4.25 percent, aligning with expectations on Wall Street. (CNBC, Sept. 17)
  • Fed Chair Jerome Powell emphasized that while inflation remains above the 2 percent target, rising signs of labor market weakness justify a more accommodative stance.
  • Governor Stephen Miran, confirmed to the Fed Board on Monday, cast the lone dissent in favor of a steeper half-point cut.
  • The central bank’s latest projections signal two more rate cuts before year-end, though the “dot plot” of officials’ individual expectations varied considerably.

Housing Impact

  • Mortgage rates have responded quickly to the Fed’s decision, falling to 6.17 percent as of Thursday—the lowest level in nearly a year. (Fortune, Sept. 18)
  • However, mortgage rates remain elevated compared to pre-pandemic levels, leaving many prospective homebuyers priced out. Home values remain roughly 50 percent higher than at the start of the decade. (AP News, Sept. 18)
  • Chair Powell acknowledged that monetary policy alone cannot solve the nation’s housing affordability crisis. “There’s a deeper problem here, that’s not a cyclical problem that the Fed can address, and that is just a pretty much nationwide housing shortage,” he said. (CNN, Sept. 17)
  • The Real Estate Roundtable (RER) continues to advocate for bipartisan solutions that increase housing supply and reduce regulatory barriers to new development, such as the Road to Housing Act (S. 2651) and the Revitalizing Downtowns and Main Streets Act (H.R. 2410).

Implications for CRE

(L-R): Jef Conn, Jeffrey DeBoer, and Shannon McGahn
  • The Fed’s rate cut comes soon after the release of RER’s Q3 2025 Sentiment Index, which reflected cautious optimism among CRE executives. The Index rose 13 points from last quarter to a score of 67, as signs of stabilization and sector-specific growth have started to emerge. (Roundtable Weekly, Sept. 5)
  • Interest rate cuts could provide a modest tailwind for CRE markets, although some property types remain under pressure.
  • Further reductions in borrowing costs into 2026 could support more robust valuations and transaction activity. (Multifamily Dive, Sept. 17)
  • At the 2025 C5 + CCIM Global Summit in Chicago this week, RER President & CEO Jeffrey DeBoer joined Shannon McGahn (Executive Vice President and Chief Advocacy Officer, National Association of REALTORS®) and Jef Conn (Industrial & Office Specialist, Coldwell Banker Commercial Capital Advisors) on a panel to discuss the bipartisan nature of the nation’s affordable housing crisis.
  • DeBoer emphasized the need for a construction visa program to expand the labor force and build more supply, along with policies such as YIMBY legislation, property conversion incentives, and permitting reforms to help address the crisis.

The Fed’s next rate decision is scheduled for Oct. 29, with the final FOMC meeting of the year set in early December.

HUD Innovative Housing Showcase Highlights Affordability and Need for Reform

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Housing affordability remained a central issue in Washington this week, with congressional hearings, a special Housing Showcase event, fireside chats, and the introduction of new housing legislation all contributing to the increasing momentum for reform.

HUD Innovative Housing Showcase Highlights Market Solutions

  • This week also marked the return of the Department of Housing and Urban Development’s (HUD) Innovative Housing Showcase on the National Mall in Washington, D.C., which ran from Sept. 6-10.

  • The event featured model homes, manufactured and 3D-printed structures, and new building technologies aimed at reducing construction costs, expanding supply, boosting efficiency, and spotlighting public-private partnerships. (HousingWire, Sept. 5)

  • Coinciding with the event, Rep. Mike Flood (R-NE), chairman of the House Financial Services Subcommittee on Housing and Insurance, and Rep. Emanuel Cleaver (D-MO) introduced the Streamlining Manufactured Housing Standards Act. (HousingWire, Sept. 10)

  • The bipartisan bill seeks to remove regulatory uncertainty, preserve affordability, and promote manufactured housing as a scalable solution to the nation’s housing shortage.

Fireside Chat with Chairman Scott and Secretary Turner

  • On Sept. 9, as part of the Housing Showcase, Senate Banking Committee Chairman Tim Scott (R-SC) joined HUD Secretary Scott Turner for a fireside chat to discuss housing priorities and the Renewing Opportunity in the American Dream (ROAD) to Housing Act. (Press release)

  • Sec. Turner underscored the importance of working in coordination with the private sector. “Public-private partnerships are key to overcoming the housing issue we have in our country,” said Sec. Turner. “We want to do the best job we can from a HUD standpoint to work with our private-sector partners to bring about solutions for the American people.” (Watch Discussion)

  • Meanwhile, Sen. Scott highlighted the ROAD to Housing Act as proof that Republicans and Democrats can come together on housing policy. “It started off as my bill, but it became our bill… We got every member on the left and every member on the right to have a piece of the pie.”

  • The ROAD to Housing Act was unanimously approved by the Senate Banking Committee in July, and now awaits a vote in the Senate.

Industry Urges Cost-Effective Energy Policies at Hearing on Housing

  • On Wednesday, the House Energy and Commerce Subcommittee on Energy held a hearing titled “Building the American Dream: Examining Affordability, Choice, and Security in Appliance and Buildings Policies,” to assess the impact of federal energy regulations on housing costs. (Watch hearing)

  • National Association of Home Builders (NAHB) Chairman Buddy Hughes testified that restrictions on energy choice, appliance standards, and mandates on energy codes are making new homes less affordable for most buyers.
  • “Our members are on the front lines of an affordability crisis. Seventy-five percent of households can’t afford a median-priced new home, and half the renters in this country spend over 30 percent of their income on housing costs. New Washington mandates will only make this crisis worse,” said Hughes. (NAHB Testimony)

Looking Ahead

  • The Federal Reserve will decide next week whether to reduce interest rates, which could bring much-awaited relief from elevated home borrowing costs. (Realtor.com, Sept. 11)
  • Meanwhile, reports suggest that President Trump may declare a national housing emergency this fall. Treasury Secretary Scott Bessent confirmed that “everything is on the table.” (Fox News, Sept. 10 | Realtor.com, Sept. 10)

RER will continue to engage with policymakers and industry leaders to promote bipartisan legislation and regulatory reforms that expand the housing supply and improve affordability.

Update: What CRE Needs to Know About Energy Policy

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Major changes to the federal tax code’s clean energy incentives, signed into law on July 4 by the One Big Beautiful Bill (OB3) Act, continue to reshape the future of building-related solar, storage, and energy efficiency investments.

Energy Tax Incentives

  • The OB3 Act accelerates the phase-down of certain tax credits, shortens eligibility timelines, and adds stricter foreign content and control rules. Projects beginning construction in 2025 and beyond should consider:
  • Tax credits that phase out over the next few years (such as the Section 48E “tech neutral” credit for solar, the Section 179D deduction and 45L credit for energy efficiency projects, and the Section 30C credit for EV charging stations);
  • Tax credits that remain available well into the 2030s (such as Section 48E for energy storage); and
  • Permanent options for “full expensing” that can accelerate tax write-offs of energy-related and other building investments, regardless of Section 48E or other tax credit availability

Solar “Beginning of Construction”

Workers on sustainable energy project on rooftop of building
  • The timing of when rooftop solar projects are deemed to “begin construction” is crucial for determining tax credit eligibility under the OB3 Act’s accelerated phase-down of the Section 48E credit.
  • RER, Nareit, NAIOP, and ICSC submitted a joint letter to Treasury on Aug. 8 urging continued reliance on both the Safe Harbor and Physical Work Tests. (Letter, Aug. 8)
  • On Aug. 15, the IRS issued Notice 2025‑42, preserving the Safe Harbor for rooftop solar projects of 1.5 MW or less, which includes most CRE rooftop solar projects and maintains their eligibility for Section 48E credits (for as long as they remain available). (Clean Energy Council, Aug. 18)

EPA ENERGY STAR

  • The status of the ENERGY STAR program should become clearer as part of the “phase 2” reorganization plan of the Environmental Protection Agency (EPA), expected to be implemented by the end of September, as per a White House budget office memo. (EPA press release, July 18) (Politico, July 17).
  • RER and multi-industry coalition partners advocated strongly for Senate and House Appropriations Committee actions this summer, which would provide ample federal spending for ENERGY STAR in FY’2026 starting on Oct. 1. (Roundtable Weekly, July 25).
  • Meanwhile, ENERGY STAR recently certified 131 buildings nationwide under its voluntary new NextGen program, available for highly energy efficient buildings that also opt to reduce emissions and use renewable energy.

California Guidance on Climate Reporting

  • The California Air Resources Board (CARB) released draft guidance this week for companies required to publicly report on climate-related financial risks under state law SB 261.
  • Quantifying and reporting Scope 1, 2, and 3 emissions will not be mandatory in the initial reporting period under California’s law, which applies to companies with annual worldwide revenue greater than $500 million. (PoliticoPro, Sept. 2 | RER’s fact sheet on SB 261 and SB 253, Sept. 2023)
  • The new reporting requirements are expected to start in 2026. Final rules from CARB are expected by December. (ESGToday, Sept. 4)

Housing Affordability and Energy Codes

  • Next Tuesday, Sept. 9, the House subcommittee focused on energy policy will hold a hearing examining the impact of residential building energy codes on housing affordability. (Energy Subcomm. Press release, Sept. 2)
  • According to the memo prepared for the hearing, construction that aligns with the 2021 version of model residential energy codes can add $31,000 to the price of a new home, “and take up to 90 years for a home buyer to recoup the payback value.”
  • Witnesses at the hearing include representatives from the National Association of Home Builders (NAHB) and the natural gas utility serving the Washington, D.C. metro area.

RER will continue advocating to the Trump administration and Congress for clear, workable policies that support long-term real estate energy investments.

Roundtable CEO Discusses Measures to Boost Housing Supply at Capitol Hill Summit

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Congress returned from recess this week with housing affordability at the forefront, as lawmakers, industry leaders, and advocates launched new legislation, coalition efforts, and regulatory proposals aimed at expanding supply and lowering barriers to residential development.

Summit on Housing Affordability

  • The National Summit on the Housing Affordability Crisis convened Sept. 3 on Capitol Hill and featured House Democratic Leader Hakeem Jeffries (D-NY), Sen. Ruben Gallego (D-AZ), and other lawmakers calling for bold action to expand and improve the affordability of housing nationwide. Rep. Jimmy Gomez (D-CA) hosted the summit. (Watch Panel)
  • RER President & CEO Jeffrey DeBoer joined Rep. Gomez, Emily Cadik (Affordable Housing Tax Credit Coalition), and Will Fischer (Center on Budget and Policy Priorities) on the summit’s opening panel “Making the Housing Puzzle Work.” (Watch DeBoer’s Remarks, Sept. 3)
  • DeBoer commented, “Housing affordability is at its core a supply problem—and supply is constrained by costs, labor, and capital. We need policies that continue to expand the Low-Income Housing Tax Credit, advance the bipartisan Revitalizing Downtowns and Main Streets Act to encourage the conversion of obsolete buildings, and ensure we have the skilled workforce to build. That’s why it’s so important to bring together lawmakers and stakeholders from every sector, because housing is an essential facet of American life, and solving this crisis requires public and private partners working together to expand supply, modernize rules, and deliver homes—both owned and rental single-family and multifamily—that meet the needs of Americans.”
  • Rep. Gomez highlighted the RER-backed Revitalizing Downtowns and Main Streets Act, which would create a federal tax credit to convert underutilized and obsolete commercial properties into affordable housing.
  • Rep. Gomez framed the affordability crisis as a test of confidence in U.S. institutions, saying America “needs a housing boom” prioritizing fairness and accessibility. (Rep. Gomez Press Release, Sept. 4)

Bipartisan Housing Legislation

  • On Sept. 2, RER joined more than 20 real estate and housing groups in a Housing Affordability Coalition letter to Congress urging action on several bipartisan bills, including the HOME Investment Partnerships Reauthorization and Improvement Act, the Workforce Housing Tax Credit Act, and more. (Letter, Sept. 2)
  • The letter emphasized that housing affordability requires public–private partnerships and the removal of regulatory barriers.
  • Rep. Mike Flood (R-NE), chair of the Housing and Insurance Subcommittee, said he aims for an October markup of a bipartisan HOME program reauthorization with Ranking Member Emanuel Cleaver (D-MO). (PoliticoPro, Sept. 3)
  • Their plan would expand uses of HOME funds, reduce regulatory burdens associated with Davis-Bacon, NEPA, and Buy America compliance, and speed affordable housing development.
  • The House agenda complements the Senate’s ROAD to Housing Act, advanced in July, and includes veteran housing and land-use reform bills. (Roundtable Weekly, Aug. 1)
  • Earlier this week, Treasury Secretary Scott Bessent said the Trump administration is weighing whether to declare a national housing emergency this fall, citing zoning and building codes as barriers to new supply. (Bloomberg, Sept. 1)

Coalition Seeks Flexibility on Davis-Bacon

  • On Sept. 3, RER and a group of multifamily trade associations sent a comment letter to HUD Secretary Scott Turner urging the use of Project Labor Agreements (PLAs) to determine prevailing wages on HUD projects. (Letter, Sept. 3)
  • The letter states that PLAs would provide more accurate, local, and timely wage determinations than the Department of Labor’s (DOL) survey method, which often delays projects and raises costs.  
  • The coalition said voluntary PLAs could reduce administrative burdens, speed delivery of HUD-backed housing, and serve as a test case for future Davis-Bacon reforms.

What’s Next

With Congress back in session, housing advocates are pressing for quick action on bipartisan bills and regulatory reforms. RER will continue to push for policies that expand supply, modernize outdated rules, and foster partnerships to address the nation’s affordability crisis.

Roundtable Supports Senate Plan to Boost Housing Supply and Affordability

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The Senate Banking Committee this week unanimously advanced the Renewing Opportunity in the American Dream (ROAD) to Housing Act of 2025, a sweeping housing reform package led by Chair Tim Scott (R-SC) and Ranking Member Elizabeth Warren (D-MA) aimed at addressing the housing crisis by expanding supply, improving affordability, and increasing oversight. It focuses on streamlining regulations, incentivizing construction, and supporting vulnerable populations like veterans and the homeless. The bill also seeks to modernize housing finance and disaster recovery programs. (Senate Banking Press Release, July 29)

Why It Matters

  • The Real Estate Roundtable (RER) submitted a comment letter in support of ROAD Act ahead of the committee’s first bipartisan housing markup in over a decade. (Letter, July 28)
  • The bill incentivizes states and cities to boost housing supply by cutting red tape, streamlining federal inspections, and eliminating duplicative regulations. The bill also directs the Department of Housing and Urban Development (HUD) to launch new grant and loan programs to address home repairs, health hazards, and support local zoning and development reforms. (The Hill, July 29)
  • Sen. Scott highlighted the bipartisan effort, noting that housing access and affordability remains a top economic concern for Americans. “For far too long, Congress believed this problem was too big to solve. Today, we’re taking not a step—but we’re taking a leap in the right direction in a bipartisan fashion,” Sen. Scott said in remarks at the markup. (Senate Banking Press Release, July 29)
  • 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 )
  • RER President and CEO Jeffrey DeBoer emphasized the legislation’s “smart, incentive-based approach” to removing regulatory obstacles and encouraging a broader range of housing options.
  • “The ROAD Act aligns federal incentives with local decision-making in a way that will unlock private capital, enhance housing supply, and support long-term economic resilience,” DeBoer said.

Key Provisions in the ROAD Act

  • Incentives for Housing Supply: Expands development opportunities in Opportunity Zones and near public transit, encourages adaptive reuse of vacant buildings, and supports modular and manufactured housing production.
  • Zoning and Regulatory Reform: Directs HUD to publish best practice frameworks for state and local zoning and land use to reduce barriers to housing production.
  • Streamlined Federal Programs: Coordinates HUD, Department of Agriculture (USDA), and Department of Veterans Affairs (VA) efforts to eliminate redundant rules and improve efficiency.
  • Community Development Incentives: Rewards communities that expand housing supply with Community Development Block Grant (CDBG) allocations under the Build Now Act.
  • Rental and Loan Modernization: Raises RAD program caps and updates Federal Housing Administration multifamily loan limits to match market conditions.
  • Disaster Recovery and Resilience: Permanently authorizes CDBG-Disaster Recovery and establishes a HUD office to support housing stability after disasters.

RER continues to work with Congress and the administration to address housing affordability challenges and to advance policies that will expand housing supply and economic stability.  

Appropriations Season Underway on Capitol Hill; Agency Reorganization Plans Expected

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With the One Big Beautiful Bill Act (OBBBA) now enacted, attention in Washington has turned to appropriations for fiscal year 2026. Programs important to real estate—like HUD’s rental assistance program, and EPA’s ENERGY STAR program—are navigating the annual federal spending process, as Congress must pass legislation by September 30 to avoid a government shutdown.  (Roll Call, July 18)

HUD Programs

  • The House Appropriations Committee passed a bill on Tuesday to fund HUD in FY’26. (Bill text | Summary). The measure will next proceed to the full House of Representatives for a vote. (Press Release, July 17)
  • Under the bill, HUD would get about $67.8 billion in discretionary funds, a $939 million decrease compared to FY 2025.
  • Section 8 project-based rental assistance would receive a $237 million increase over FY 2025 levels, totaling $17.127 billion. According to the committee, the funding would support full renewal of contracts for roughly 1.2 million households.
  • Despite the funding gains for rental assistance, the bill includes a 26% cut to HUD staffing—raising concerns about the agency’s capacity to manage and deliver programs efficiently. (PoliticoPro, July 9)

EPA Programs

  • A separate House appropriations subcommittee also passed a bill on Tuesday to fund EPA for FY’26. (Bill text | Summary). The bill proposes no specific cuts to ENERGY STAR. The program receives strong support from RER in partnership with a broad coalition of national real estate, manufacturing, retail, and technology industry groups. (Roundtable Weekly, June 6).
  • The measure proposes $2.27 billion for EPA’s environmental programs in FY’26, representing a 29% cut compared to current fiscal year funding. (Summary)

Supreme Court Ruling Upholds Agency Reorganizations

  • Ultimate FY’26 spending levels will be impacted by agencies’ internal plans to reorganize and eliminate programs. An 8-1 decision by the U.S. Supreme Court last week allows the Trump administration to move forward with large-scale staff reductions and structural overhauls across 19 federal departments. (Reuters, July 9)
  • The high Court’s ruling states that any specific reorganization effort could be deemed illegal, while confirming the President’s general authority to direct agencies to develop “RIF and Reorganization Plans” by September 30 in accord with a “DOGE” Executive Order and White House memo both issued in February.
  • Moving forward with EPA’s planned restructuring, Administrator Lee Zeldin on Thursday announced further reorganization by consolidating finance and administrative offices, changing enforcement and Superfund offices, and continued workforce reductions through early retirements and layoffs. (PoliticoPro, July 17)
  • Reports thus far of Zeldin’s plans do not identify any planned cuts to ENERGY STAR or the larger division in which it is housed at the agency.
  • Advocacy by RER and coalition partners to the administration and Congress explains that ENERGY STAR’s continued success as a non-regulatory, public-private partnership depends on sufficient staff and budget resources to implement the program.

What’s Next

  • Rescissions: Congress may consider further efforts to rescind unspent prior-year funding, similar to the bill passed this week and now heading to the President’s desk clawing-back $9 billion in previous funds for foreign aid and public media. (POLITICO, July 18). 
  • More Tax Legislation?: According to the House speaker’s top tax aide, Congress may pursue a bipartisan tax package, additional retirement policy changes, and a follow-up reconciliation bill informally dubbed “2 Big 2 Beautiful.” (Tax Notes, July 17)
  • Section 899: Republican tax leaders Rep. Jason Smith (R-MO) and Sen. Mike Crapo (R-ID) have signaled they may reintroduce the Section 899 retaliatory tax if negotiations to exempt U.S. companies from OECD Pillar 2 taxes fail, potentially in a second reconciliation bill (Tax Notes, July 17). However, Germany’s Finance Minister Lars Klingbeil reaffirmed his country’s commitment to implementing Pillar 2 of the global minimum tax, despite widespread uncertainty following recent U.S. tariff announcements and the G7 carveout exempting American companies. (PoliticoPro, July 18)
  • FY’26 Appropriations: Senate Majority Leader John Thune has not yet decided whether to bring a government funding bill to the floor next week but aims to pass at least one funding package before the Senate’s August recess. (PoliticoPro, July 17) If congress does not pass FY’26 spending legislation by September 30, it could default to a stop gap “continuing resolution” and extend FY’25 levels to keep the government running.
  • Agency Restructurings: Reorganizations plans prompted by DOGE efforts will continue to be unveiled before and after Labor Day.

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

Congressional Hearing Highlights Policy Reforms to Boost Affordable Housing Supply

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Bipartisan lawmakers this week discussed reforms aimed at reducing barriers to housing development and increasing supply during a congressional hearing on the nation’s housing shortage.

Key Takeaways

  • The House Financial Services Subcommittee on Housing and Insurance’s hearing, titled “HOME 2.0: Modern Solutions to the Housing Shortage,” highlighted the crucial need to expand the supply of affordable housing. (Committee Memo)

  • “This is a basic supply and demand issue,” said Rep. Mike Lawler (R-NY). “We are seven and a half million units underbuilt nationwide. We need to build more housing. Period.”

  • Modernizing the HOME Investment Partnership (HOME) Program, administered by the U.S. Department of Housing and Urban Development (HUD), was also a prominent focus of the hearing. HOME is a flexible and effective federal tool that empowers states and localities to build, buy, and rehabilitate affordable housing.

  • Subcommittee Chairman Mike Flood (R-NE) cited four major cost drivers—lengthy environmental reviews, “Build America, Buy America” rules, Davis-Bacon wages, and Section 3 mandates—as the “four horsemen of the housing apocalypse” hindering the HOME Program.
  • Ranking Member Emanuel Cleaver (D-MO) similarly called for modernizing the HOME Program, highlighting the inefficiencies created by the “massive number of rules” placed on developers building safe, decent, and affordable housing.

  • Eric Oberdorfer, Director of Policy and Legislative Affairs at the National Association of Housing and Redevelopment Officials (NAHRO), also noted the importance of the low-income housing tax credit (LIHTC), which is often used in conjunction with the HOME program to finance affordable housing.

RER Advocacy

  • The Real Estate Roundtable (RER) has consistently emphasized that America’s affordability crisis is driven by chronically low housing production. Tackling this shortfall requires a national transformation in housing policy that makes it easier to build housing of all types.

  • Changes made by the One Big Beautiful Bill (OBBB) Act signed this month, including expansions to the LIHTC, are projected to support the development of up to 1.2 million affordable rental units over the next decade. (Roundtable Weekly, July 11)

  • RER strongly supports key reforms discussed at this week’s hearing, including easing Davis-Bacon prevailing wage requirements, which place inordinately high costs on construction projects and inhibit access to federal loan and other housing construction incentives, and the HOME Program (Roundtable Weekly, April 2024, May 2023).
  • In May, RER joined a coalition of 15 national real estate organizations urging the Labor Department to repeal and revise its 2023 Davis-Bacon rule, citing outdated wage classifications that inflate project costs by up to 20% and discourage participation in federally funded housing. (Roundtable Weekly, May 23)

RER will continue to champion policies to bolster the availability of safe and affordable housing. See our fact sheet on the topic for more information.

New Tax Law to Spur Housing Construction and Property Improvements as Congressional Leaders Explore Options for Next Tax Bill

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President Donald Trump signed the One Big Beautiful Bill Act (OBBB Act) into law on July 4, the culmination of months of work by congressional Republicans to reshape federal tax and spending policies. The legislation included provisions long advocated by The Real Estate Roundtable (RER), such as a significant expansion of affordable housing tax incentives, accelerated depreciation for property improvements, and reform of tax accounting rules for condominium construction.

RER Summary of Real Estate Related Provisions

Affordable Housing Boost

  • The OBBB Act enacts landmark changes to address the nation’s housing shortage through enhancements to long-standing development incentives. (Roundtable Weekly, July 3)
  • The OBBB Act expands the Low-Income Housing Tax Credit (LIHTC) by permanently increasing state LIHTC allocations by 12% and reducing the private activity bond financing requirement for 4% LIHTC projects from 50% to 25%. The latter provision will allow more affordable housing projects to receive tax credits without a direct allocation from the state.
  • The bill’s overhaul of tax provisions is projected to support the development of up to 1.2 million affordable rental units over the next decade. (PoliticoPro, July 9)
  • These changes to the LIHTC represent “the single largest increase in affordable housing development resources in at least 25 years,” said Peter Lawrence, chief public policy officer at Novogradac. (PoliticoPro, July 9)

Other OBBB Tax Changes Will Stimulate Housing Construction, Property Upgrades, and Real Estate Investment

  • Bonus Depreciation: The new tax law permanently restores immediate 100% expensing of qualifying capital expenditures, including appliances, fixtures, leasehold improvements, and interior improvements to nonresidential property. The provision will encourage capital investment and spur real estate improvements by reducing the after-tax cost of modernizing and upgrading existing properties. (RER Summary of Real Estate Related Provisions)
  • Condominium Construction: OBBB ends a discriminatory tax accounting rule that unfairly created phantom income for condo developers with respect to the pre-sale of units. The prior rule requiring condo developers to use the percentage of completion method of accounting raised hurdles for construction financing and discouraged new housing construction. OBBB will allow developers to use the completed contract method, aligning tax liability with actual receipts.
  • Opportunity Zones (OZs): OBBB permanently extends the Opportunity Zones (OZ) tax incentives, establishes a new designation of OZ census tracts every 10 years, and going forward, creates a 5-year rolling deferral period for capital gains invested in opportunity funds. Since their enactment in 2017, OZs have attracted over $120B in capital for low-income communities, with most investment going towards new housing and other productive real estate development. (Joint Committee on Taxation, 2024; Novogradac, Feb. 2025; Economic Innovation Group, March 2025)
  • On the latest episode of the Walker Webcast’s Most Insightful Hour in CRE, RER member Willy Walker (Chairman and CEO, Walker & Dunlop) and economist Dr. Peter Linneman (Principal, Linneman Associates) discussed the OBBB Act, tariffs, impacts on construction costs, affordable housing, single and multifamily supply, CRE markets, and much more. (Watch Webcast) (ConnectCRE, July 9)

State-Level Initiatives Strengthen Federal Housing Efforts

  • Rising construction costs and ongoing affordability challenges have prompted states to complement federal initiatives like LIHTC.
  • States such as Tennessee, Georgia, and Michigan have introduced innovative financing programs—including state-level tax credits and tax increment financing (TIF), leveraging future tax revenues generated by increased property values to sustainably fund and accelerate housing projects. (GlobeSt. July 11)
  • This week, RER member David O’Reilly (CEO, Howard Hughes Holdings) appeared on CNBC to discuss interest rates, housing market, and consumer demand.
  • Florida will eliminate its longstanding tax on commercial rents effective Oct. 1, 2025, becoming the first and only state to repeal the tax. The move is expected to reduce costs for tenants across office, industrial, and retail sectors, enabling businesses to reinvest capital into operations, local communities, and real estate. (GlobeSt. July 10)

Looking Ahead

  • Senate Finance Committee Chair Mike Crapo (R-ID) said this week that Republicans are eyeing a second party-line reconciliation package this fall to pursue policy priorities left out of the final OBBB Act.
  • “I’ve always been in favor of a three-bill strategy and there’s a ton of things that we need to do,” Sen. Crapo said (Politico, July 9).
  • GOP leaders have discussed reworking provisions flagged by the Senate parliamentarian during OBBB Act negotiations, potentially reviving items such as additional tax reforms and deeper spending cuts.
  • House Speaker Mike Johnson (R-LA) and House Budget Chair Jodey Arrington (R-TX) are also pushing for fall action, though Sen. Crapo cautioned that timelines remain fluid. (Politico, July 8 | Fox News, July 6)
  • “We’ve been planning a second reconciliation bill for the fall attached to the next fiscal year, and then potentially one in the spring,” Speaker Johnson said on Fox News Sunday. “That’s my plan. Three reconciliation bills before this Congress is over. I think we can do that.” (Fox News, July 6)

“Revenge Tax” Provision

  • The final OBBB Act excluded a provision opposed by The Roundtable that would have raised taxes on foreign investment that originated in countries deemed to have unfair tax policies. Proposed Section 899 could reappear, however, if international tax talks to exempt US companies from a global tax deal falter. (Roundtable Weekly,  June 27)

The G7 agreement to agreement is still only a “statement of intent,” with implementation details unresolved, raising the risk that Section 899 could return in a future reconciliation package, according to Tax Notes. “Republicans made clear they’d bring it back if G7 partners slow-walk the deal,” said Danielle Rolfes of KPMG. (Tax Notes, July 10)