Tag: Coronavirus

Government Funding Deadline Extended to Dec. 18 as Pandemic Relief Package Proposals Face “COVID Cliff”

Posted on by Trey Jackson

Architect of the Capitol

Congress this week extended government funding until Dec. 18 to avert a government shutdown and give bipartisan negotiators more time to finalize a pandemic relief bill, which remains at an impasse over business liability and state and local government aid provisions. President Trump is expected to approve the one-week spending bill before current funding expires tomorrow.  (CNBC, Dec. 11)

  • Policymakers engaged in intense pandemic aid negotiations also face the expiration of unemployment and housing benefits scheduled at the end of this month. This “Covid cliff” includes the Dec. 31 expiration of a national eviction moratorium by the Centers for Disease Control. (CNBC, Dec. 4 and The Hill, Dec. 9)
  • House Speaker Nancy Pelosi (D-CA) and Senate Majority Leader Mitch McConnell (R-KY) recently signaled their goal was to combine a 2021 fiscal year spending bill with pandemic relief as part of a massive “omnibus” bill this month before recessing. (Politico, Dec. 4)
  • McConnell this week backed a $916 billion GOP pandemic aid proposal released Dec. 8 by Treasury Secretary Steven Mnuchin, while Democratic leaders support a $908 billion proposal issued by a bipartisan group of lawmakers last week. (BGov, Dec. 10)
  • The bipartisan coalition on Dec. 9 released details on its $908 billion stimulus proposal that includes $25 billion for residential rental assistance, state and local aid, augmented unemployment insurance benefits, a scaled-down Paycheck Protection Program (PPP) – as well as money for vaccine development, supply, and testing and tracing programs. (Framework summary for details on the bipartisan Emergency COVID Relief Act of 2020, Dec. 9)
  • Although the dueling relief plans are close in total costs, significant policy differences over business liability and state and local government aid threaten the completion of negotiations. (Wall Street Journal, Dec. 9)
  • The bipartisan group reportedly agreed this week on a needs-based formula to distribute $160 billion in state and local aid, but will not release details until compromise language addressing liability is finalized. (CQ, Dec. 9 and BGov, Dec. 10)
  • Sen. Chris Coons (D-DE) on Dec. 9 said that emerging liability language may include a six-month moratorium on coronavirus-related lawsuits that would give states time to develop their own protections. An “affirmative defense” provision may also be included to counter excessive claims against institutions subject to lawsuits. (Roll Call, Dec. 9)

Pelosi yesterday suggested that discussions over the emergency legislation could now stretch beyond the holiday season. “If we need more time, then we take more time. But we have to have a bill and we cannot go home without it,” Pelosi said. “I would hope that it would honor the December 18th deadline … We’ve been here after Christmas, you know.” (Business Insider, Dec. 10)

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Roundtable Holds Policy Town Hall; Post-election Congressional Session Faces Pandemic Relief Pressure, Government Funding Deadline

Posted on by Trey Jackson

Participants in RER Virtual Town Hall Nov9

The Real Estate Roundtable this week held a virtual “town hall” to discuss the election and its impact on national policy issues. Participating in the discussion were Sen. Michael Bennet (D-CO), Roundtable Chair Debra Cafaro (Chairman and CEO, Ventas, Inc.), Chair-Elect John Fish (Chairman and CEO, Suffolk), Roundtable President and CEO Jeffrey DeBoer and policy staff. The Nov. 9 discussion addressed a wide range of policy issues with nearly 200 Roundtable members in attendance. (Watch the discussion on The Roundtable’s YouTube Channel)

  • Cafaro said, “Our priorities are the COVID relief package that will come out of Congress, whether in the lame-duck session or later – a renters’ fund … (support) for state and local government relief … for the Paycheck Protection Program … funding for continued vaccine and testing and distribution … and liability protection of some type.”
  • Fish stated, “What is important for this COVID bill … if we don’t support the cities and towns and states, getting them back on their feet, the issues of lay-offs, restoring services and the impact on education … it is going to continue to spiral. If that happens, that is really detrimental.” He added those measures should be “coupled with PPP support because we need to put people back to work. They need payroll protection, the need jobs and that sense of security.” (Nov. 9 Roundtable Town Hall video)
  • Roundtable policy staff reviewed the lame-duck legislative outlook; tax and energy policy; and initiatives to create a Federal “business continuity” insurance program to mitigate future pandemic risk.
  • DeBoer also participated in a Nov. 12 NYU Shack Institute of Real Estate remote discussion on “Real Estate’s Priorities: Engaging with the New Administration” with Dr. Sam Chandan, PhD, Silverstein Chair of the Institute. (See Shack’s entire agenda)
  • “The narrow majorities in the House and Senate next Congress will place a premium on bipartisanship, and create hurdles for extreme legislation.  We expect a very active Congress. Large legislative agreements will be possible, but odds favor more targeted, constructive legislative initiatives. We look forward to offering our positive perspective on stabilizing the economy and moving forward,” DeBoer said. (Video with Sam Chandan)

Lame-Duck Agenda

DC Capitol Building

President-elect Joe Biden and Democratic leaders met this week about prospects for a bipartisan pandemic relief package during the post-election Congress, despite deadlocked negotiations over the cost and policy details of COVID-19 aid – and unlikely chances for compromise ahead of Georgia’s Senate elections on Jan. 5.

Both chambers of Congress return for their “lame-duck” session with a limited amount of working days before the new 117th Congress begins in January. The current Congress will need to pass a funding bill to keep the government open past Dec. 11 or face a shutdown – and negotiate a coronavirus stimulus package before several safety net programs expire in late December. It is possible the two measures could be combined in an “omnibus” bill. (BGov and Calculated Risk, Nov. 12)

  • Senate Majority Leader Mitch McConnell (R-KY) said this week that Congress should pass a limited stimulus bill before the end of the year, reiterating Senate Republicans’ opposition to a larger-scale package Democrats favor, signaling the current stalemate could extend into next year. (The Hill, Nov. 12 and Roundtable Weekly, Nov. 6)
  • Biden’s meeting with House Speaker Nancy Pelosi (D-CA) and Senate Minority Leader Charles Schumer (D-NY) yesterday addressed several outstanding issues facing Congress and the new administration.
  • According to a joint readout from Biden’s transition team and the congressional Democrats, “They discussed the urgent need for the Congress to come together in the lame duck session on a bipartisan basis to pass a bill that provides resources to fight the COVID-19 pandemic, relief for working families and small businesses, support for state and local governments trying to keep frontline workers on the payroll, expanded unemployment insurance, and affordable health care for millions of families.” (The Hill, Nov. 12)
  • Policymakers are reconvening amidst troubling signs affecting the economy, including a significant rise in COVID-19 cases, hospitalizations and deaths throughout the country as state and local governments consider reinstating lockdowns and school shutdowns. (Axios, Nov. 13)
  • Additionally, The Washington Post reported this week that regulators are increasingly concerned about US banks’ loan exposure to commercial real estate. The Nov. 11 article reports that if banks are forced to absorb losses on their $2 trillion in commercial real estate loans, the entire economy will suffer, according to Federal Reserve officials, economists and credit analysts.
  • “The Federal Deposit Insurance Corp. (FDIC) regards 356 banks as ‘concentrated’ in commercial real estate, based upon criteria such as the ratio of their CRE loans to their capital base and the pace of loan growth over the past three years,” according to the article.

Eric Rosengren, the president of the Federal Reserve Bank of Boston, said in a September speech, “I am especially worried about a second shoe dropping that will particularly affect small and medium-sized banks, which provide a large share of commercial real estate loans and small-business loans. A curtailment of credit resulting from such problems has caused serious head winds to recoveries in the past and may be a serious problem going forward.” (Washington Post, Nov. 11)

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Real Estate Coalition Urges Federal Banking Regulators to Extend Relief Period for COVID-19 Related Loan Modifications

Posted on by Trey Jackson

Logo compilation of Commercial Real Estate Coalition

A coalition of national real estate organizations, including The Real Estate Roundtable, this week urged federal banking agencies to provide additional guidance that would reaffirm financial institutions may use reasonable judgment when assessing credit risk during the unique circumstances of the pandemic – such as allowing borrowers and lenders additional time to see properties and loans through the pandemic.

  • The guidance would preserve financial institutions’ ability to continue work with borrowers and grant additional incremental accommodations that would total more than six months after December 31, without being classified as a troubled debt restructuring (TDR). (Coalition letter and MBA Newslink, Nov. 10)
  • Early in the crisis, the Federal Reserve joined the Office of the Comptroller of the Currency (OCC) and other banking regulators in a March 22 Interagency Statement that encouraged banks to avoid automatically categorizing COVID-19 related loan modifications up to 6 months as a TDR. (Roundtable Weekly, March 27)
  • The March joint statement also encouraged borrowers experiencing cash flow problems due to the pandemic to reach out to any FDIC-insured lenders about modifying their loans, without adverse consequences to the bank or the borrower that traditionally come with the TDR label.  
  • The statement included, “Short-term modifications made on a good faith basis in response to COVID-19 to borrowers who were current prior to any relief are not TDRs.  This includes short-term — for example, six months — modifications such as payment deferrals, fee waivers, extensions of repayment terms, or other delays in payment that are insignificant.”
  • On March 24, The Roundtable called on all owners and operators of business and residential rental real estate to voluntarily, proactively work in a positive and constructive manner with their COVID-19 impacted tenants respecting current rent obligations. (Roundtable news release, March 24)

Confluence of Events

OCC logo

  • A revised interagency statement released April 7 clarified the interaction between the March 22, 2020, interagency statement and section 4013 of the CARES Act, Temporary Relief from Troubled Debt Restructurings (section 4013). 
  • Many of the modifications granted under the revised Interagency Statement and section 4013 of the CARES Act are reaching the end of their six-month terms – at that same time that CARES Act protections are set to expire on December 31, 2020.
  • This confluence of these events creates significant, urgent challenges for any financial institution seeking to extend existing modifications of Covid-19 related loans past their six-month term.
  • The Nov. 10 coalition letter states, “…we urge the Agencies to provide guidance that a loan modification with a term greater than six months (e.g., up to 18 months combined) will not automatically result in a TDR under the Interagency Statements.”
  • “Because this issue is urgent, we request that the Agencies issue such a clarification and reaffirmation as soon as possible,” the letter concludes.
  • Brooks stated, “While banks remain sound, we see potential for troubled assets ahead in commercial and residential real estate, in small business and consumer lending, and in the travel and hospitality sectors in particular. Banks, particularly those with concentrations in those assets, must take a sober view of their risks and work with customers to the maximum extent possible consistent with safety and soundness.”

The Roundtable’s Real Estate Capital Policy Advisory Committee (RECPAC) continues its work with Washington policymakers to constructively support The Roundtable’s efforts to address the economic consequences of the COVID-19 crisis.

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Post-Election Pandemic Relief Could Be Part of Government Funding Bill in December

Posted on by Trey Jackson

Capitol Dome Dusk

Current negotiations on a pandemic relief bill remain at a standstill until the results of next week’s elections, which will impact the contours of a potential deal in a “lame-duck” Congress that must also pass funding legislation by Dec. 11 to avoid a partial government shutdown.

  • The key players in the relief negotiations– House Speaker Nancy Pelosi (D-CA) and Treasury Secretary Steven Mnuchin – both expressed frustration this week about the deadlock over policy differences for a COVID-19 stimulus deal.
  • Pelosi detailed seven policy issues where significant disagreements remain in an Oct. 29 letter to Mnuchin – including funding for state and local governments; OSHA and worker liability protections; and unemployment insurance and tax credits for working families. Mnuchin responded with his own letter yesterday, saying the state of negotiations described by Pelosi were inaccurate. (BGov, Oct. 30)
  • Pelosi also told the Wall Street Journal this week, “What [Mr. Mnuchin] and I have agreed upon—on how we would go forward—is not necessarily what the Republican Senate will vote on. That is up to the president to convince them that the agreement we have with him is one that will be honored by them.” (WSJ, Oct 28)

Post-Election Lame-Duck Session

IRS Covid19 Tax Relief image

President Trump yesterday said, “Once we get past the election, we’re going to get it (pandemic stimulus). It may be bipartisan, it may not have to be… Right after the election, we’ll get it one way or the other.” (Jon Taffer podcast, Oct. 29)

  • Trump also said his administration expects negotiations to continue, saying, “After the election we’ll get the best stimulus package you’ve ever seen …” (The Hill, Oct. 27 and CQ, Oct. 29)
  • The cost of a potential package is another major impediment in the negotiations, with the Trump administration considering a ceiling of $1.9 trillion and the Democrats holding at $2.4 trillion.  ( Roundtable Weekly, Oct. 23)
  • Senate Whip John Thune (R-SD), who is number 2 in the chamber’s leadership, said on Oct. 25 that if Democrats win on Nov. 3, a smaller stimulus bill could be pursued in the lame-duck session, followed by another package in the new year. (BGov, Oct 27)
  • House Ways and Means Ranking Member Kevin Brady (R-TX) added this week  he was open to finalizing a “smart Covid package” during the upcoming lame-duck session, commenting he aims to provide certainty for more than 30 tax extenders scheduled to expire at the end of 2020. “We’ve already reached out and are having discussions with (House Ways and Means) Chairman Neal and Democratic leaders on how we might resolve some of those temporary health and tax provisions,” Brady said. (BGov, Oct. 30)

With government funding set to expire on Dec. 11 and many temporary financial safety net programs expiring on Dec. 31, lawmakers could merge some COVID-19 aid measures into a sweeping multi-trillion-dollar omnibus bill to avoid a partial shutdown.  (Marketwatch, Oct 21, Washington Post, Oct. 23 and RollCall, Oct. 28)

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Pandemic Relief Deal at Impasse as Election Nears

Posted on by Trey Jackson

Coronavirus

Policymakers signaled this week that pandemic relief negotiations remain at an impasse over federal aid to state and local governments and liability protection for employers – adding uncertainty to prospects for a deal before the election and diminishing chances for a legislative package before Nov. 3. 

  • House Speaker Nancy Pelosi (D-CA) yesterday said, “If we can resolve some of these things in the next few days, it will take a while to write the bill. We wouldn’t take less of a bill to get it sooner.” (CQ, Oct. 23)
  • President Trump today said Pelosi is delaying progress on a deal until after the election. “She wants to bail out poorly run Democrat states and that’s a problem … we don’t want to reward areas of our country who have not done a good job,” Trump said at the White House. (BGov, Oct. 23)
  • Treasury Secretary Mnuchin added today, “We’ve offered compromises. The speaker, on a number of issues, is still dug in. If she wants to compromise, there will be a deal.”
  • Pelosi said this morning on MSNBC that President Trump needs to convince reluctant Senate Republicans to support a possible deal with the White House. “The fact is that the president has been back and forth. But he has to talk to the Senate Republicans.” (Washington Post, Oct. 23)
  • The stalemate reflects a lack of legislative agreement in Congress on the cost of a COVID-19 stimulus package.” (CQ and BGov, Oct.23)
  • Senate Democrats this week voted 51-44 against a “skinny” relief bill of $500 million proposed by GOP lawmakers to fund the Paycheck Protection Program and additional unemployment relief.  That measures stands in contrast to a $2.2 trillion pandemic stimulus bill passed by the House of Representatives on Oct. 1 that is a scaled-down version of the $3.4 trillion HEROES Act passed by the House in May.  (Roundtable Weekly, Oct. 16)
  • Senate Appropriations Committee Chairman Richard Shelby (R-AL) said yesterday he has doubts a stimulus package could be agreed to soon. “I think it’s about two minutes to midnight, and we’re not going to pass anything until we see the particulars. There could always be a miracle, but there’s not many around here.”
  • It is possible that some COVID-19 aid measures could be added to must-pass legislation after the election during the “lame-duck” congressional session, when lawmakers will face a Dec. 11 government funding deadline or risk a shutdown. (Washington Post, Oct. 23)

Action on a comprehensive pandemic relief package may wait until early January after the elections – even though many temporary financial safety net programs are set to expire Dec. 31. (Marketwatch, Oct 21)

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Main Street Lending Program’s Restrictive Terms Prevent Full Access by Impacted CRE Sectors

Posted on by Trey Jackson

The Federal Reserve in Washington, DC

The Federal Reserve yesterday released its Summary of Commentary on Current Economic Conditions, showing that “commercial real estate conditions continued to deteriorate in many Districts.” There are twelve federal reserve geographic districts that gather information for the report, which is released eight times per year. 

  • The Fed report, also known as The Beige Book, adds that CRE market exceptions are the warehouse and industrial sectors, “where construction and leasing activity remained steady.”
  • The economic turbulence inflicted by the pandemic continues to damage CRE sectors such as retail and hotels, according to an Oct. 18 article in Politico. Mike Flood, senior vice president of commercial and multifamily policy at the Mortgage Bankers Association, stated, “What’s at risk here is both the ability for people to stay in their apartments and the ability for people to go to their jobs. So unless there’s a stimulus, there’s a lot less to go back to once we get back to normal times.” (Politico, “The next economic crisis: Empty retail space”)
  • The CRS report states, “Members of Congress have called on the U.S. Treasury and the Federal Reserve to open liquidity facilities to CRE and CMBS markets.”

The MSLP & CRE

Main Street Lending Program - Federal Reserve System

The New York Times and Washington Post published articles this week on the disappointing results shown to date by the Federal Reserve’s federal lending facilities, including its Main Street Lending Program (MSLP).

  • The Oct. 21 Times article reports that of the $454 billion Congress authorized in March for the Treasury Department to support various Fed emergency lending programs, $195 billion has been allocated so far – and only $20 billion in loans have been distributed.
  • The Oct. 19 Post article reports that of the $75 billion dedicated to support the Fed’s MSLP, only $3 billion has been loaned to date. According to the Post, an ongoing obstacle to making the MSLP more effective is whether the Fed and Treasury can agree on a new set of rules to significantly expand the reach of the program.
  • A broad coalition of national hotel executives on Oct 15 urged President Trump to take action by making immediate modifications to the MSLP that would increase participation in the program and help thousands of businesses crippled by the pandemic.
  • “We strongly urge you to use your executive authority to direct the Treasury to encourage the Federal Reserve to amend and expand the Main Street Lending Program … to support struggling businesses, stem the impending wave of foreclosures, and save millions of jobs to ensure the health of the entire American economy,” the letter states.
  • The hotel coalition emphasized that overly restrictive terms imposed by the MSLP continues to prevent the hardest hit businesses it was intended to support from accessing the program. “To date, only a small fraction of $600 billion in available loans have been utilized while the remaining funds – which are so desperately needed by industries like ours – sit idle and go unused,” according to the letter.
  • Real Estate Roundtable President and CEO Jeffrey DeBoer testified about the MSLP – and how to improve access to Federal Reserve credit facilities for businesses such as manufacturing, retail, restaurants, real estate owners, and other asset-based borrowers – on Sept. 9 before the Senate Banking, Housing and Urban Affairs Committee. (Roundtable Weekly, Sept. 11)
  • The Main Street program is not working, DeBoer testified, because there is little incentive for participating banks to make the loans – and the program’s eligibility, affiliation and underwriting rules are not designed to meet the needs of the businesses in need. (Video of DeBoer’s Testimony and Q&A with Senators)
  • “The result: countless mid-sized retail businesses, restaurants, hotels, commercial and multifamily building owners are moving closer to shutting their doors forever,” DeBoer stated. (Roundtable Oral Comments and written statement)
  • DeBoer added, “The recommendations that I have made on the Main Street Lending Program … really require no additional funds from the federal government. They are administrative. They could be done tomorrow by the Treasury and the Fed if they wanted to.” (Roundtable Weekly, Sept. 11)

The Roundtable continues to work with its national real estate trade partners, membership and other stakeholders to develop effective recommendations for policymakers to improve the MSLP, as well as identify alternative strategies to bolster CRE sectors and other industries struggling with the pandemic’s ongoing economic impact.

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Shifting Negotiations Aim for Uncertain Pandemic Relief Deal, Legislation Unlikely Before Election; Fed Chairman Warns Lack of Fiscal Support Risks ‘Tragic’ Consequences

Posted on by Trey Jackson

Negotiations about a pandemic relief package shifted dramatically this week in Washington, ranging from complete cancellation to industry-specific assistance to discussions reported today about a new $1.8 trillion White House proposal.  (Wall Street Journal and PoliticoPlaybook Oct. 9)

  • President Trump tweeted today, “Covid Relief Negotiations are moving along. Go Big!”
  • A framework for an agreement before the election is possible, yet the timeline for developing specific legislation and passing a broader package remains doubtful. 
  • Senate Majority Leader Mitch McConnell (R-KY) today called coronavirus negotiations “murky” and added, “I think the murkiness is a result of the proximity to the election, and everybody kind of trying to elbow for political advantage.  I’d like to see us rise above that … but I think that’s unlikely in the next three weeks.”  (The Hill, Oct. 9)
  • The Senate this week is focusing most of its attention on confirmation hearings for Supreme Court nominee Amy Coney Barrett, despite three GOP Senators having tested positive for COVID-19 and an additional three in quarantine.  (The Hill, Oct. 8)
  • Another challenge among GOP senators is attracting support for any pandemic relief package over $1 trillion. (Roundtable Weekly, Oct. 2)
  • White House support for a $1.8 trillion package reported today remains below the $ 2.2 trillion coronavirus relief bill passed last week by House Democrats.  Policy differences also remain on key areas such as liability protections for business, aid for state and local governments and the specific structure for additional federal unemployment benefits.  (Associated Press, Oct. 9)
  • House Speaker Nancy Pelosi (D-CA) on MSNBC today said, “You know, the devil and the angels are in the details. And so it—part of it is about money, and part of it is about policy,” she said.  (Wall Street Journal, Oct. 9)
  • Pelosi earlier in the week suggested that if no stimulus deal can be reached before the election, virus relief funding could be added to a must-pass spending bill needed to keep the government open after Dec. 11 during a post-election, lame-duck session of Congress.  (Roundtable Weekly, Oct. 2 and BGov, Oct. 7)
Fed Chair Jay Powell
  • Federal Reserve Chair Jerome Powell, above, on Tuesday encouraged Congress and the White House to pass greater fiscal support for the economy, households and businesses. 
  • Powell stated, “… a prolonged slowing in the pace of improvement over time could trigger typical recessionary dynamics, as weakness feeds on weakness. A long period of unnecessarily slow progress could continue to exacerbate existing disparities in our economy. That would be tragic, especially in light of our country’s progress on these issues in the years leading up to the pandemic.”  (Fed speech, Oct. 6)

Powell also warned that the economic expansion and recovery from the coronavirus is far from complete.  “Even if policy actions ultimately prove to be greater than needed, they will not go to waste. The recovery will be stronger and move faster if monetary policy and fiscal policy continue to work side by side to provide support to the economy until it is clearly out of the woods,” he said.

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Powell and Mnuchin Urge More Congressional Pandemic Fiscal Relief; Fed Releases FAQs on Main Street Lending Program; Democrats Considering New COVID-19 Package

Posted on by Trey Jackson

Treasury Secretary Steven Mnuchin and Federal Reserve Chairman Jay Powell

Federal Reserve Chairman Jay Powell (right) and Treasury Secretary Steven Mnuchin (left) testified before House and Senate committees this week to discuss the government’s pandemic response.  Powell offered no option for administrative changes to the Main Street Lending Program (MSLP) credit lending facility while Mnuchin strongly urged Congress to repurpose unused COVID-19 relief funds in another legislative pandemic aid package.  (BGov, Sept. 23 and Reuters, Sept. 24)

  • Recommendations to improve access to the MSLP were a focus of recent testimony by Roundtable President and CEO’s Jeffrey DeBoer on behalf of the industry before the Senate Banking Committee.  (Roundtable Weekly, Sept. 11)
  • Powell responded about the MSLP that the Fed has done “… basically all of the things we can think of that are clear gains (but) we are looking to do more.”  He added, “… but I would say the things that we have done have been really to widen the appeal of that program and its effectiveness … there is nothing major that we see now that would be consistent with opening it up…”  (BGov and CQ Committee transcript, Sept. 23)

Fed Updates MSLP FAQs

Federal Reserve Building DC

The Fed on Sept. 18 issued new guidance to banks for the MSLP in an attempt to encourage increased lending.  The central bank’s revised “Frequently Asked Questions” for the MSLP emphasize that lender underwriting should look back to the borrower’s pre-pandemic condition and forward to their post-pandemic prospects. The FAQs also seek to clarify the Board and Department of Treasury’s expectations regarding lender underwriting.  (Fed news release)

  • In a news conference announcing the FAQs, Powell said, “I would say it may be that further support for commercial real estate will require further action for Congress – from Congress.”

     

  • During his three committee appearances this week, Powell consistently emphasized that more fiscal relief is needed from Congress to sustain an economic recovery from the pandemic.  Mnuchin struck a similar theme in his two committee appearances while urging Congress to pass a new package that would reuse unused funds from previous COVID-19 relief authorizations for urgent needs.

     

  • Mnuchin told the Senate Banking Committee this week that up to $380 billion could be repurposed.  “It would not cost an extra penny,” Mnuchin said.  (Reuters, Sept 24)

     

  • During the Sept. 24 hearing, Senate Banking Committee Chairman Mike Crapo (R-ID) in his opening statement referred to the committee’s earlier hearing on Sept. 9 on “The Status of the Federal Reserve Emergency Lending Facilities.”

    Real Estate Roundtable President and CEO Jeffrey DeBoer

  • Chairman Crapo said, “Jeff DeBoer (above) President  and CEO of the Real Estate Roundtable painted a bleak picture of the condition of the commercial real estate market. He said, ‘It is impacting their ability to meet their debt service obligations which increases pressure on financial institutions, pension fund investors and others.’  And he said, ‘It is pushing property values down to the detriment of local governments. It is causing much stress to pools for commercial mortgage backed securities and it is threatening to result in countless commercial property foreclosures. The situation must be addressed.’”  (Crapo’s Opening Statement, Sept. 24 and DeBoer’s testimony and Q&A, Sept. 9)
  • Crapo added, “Negotiating toward a realistic package that can actually get passed and signed into law would best serve the American people during this difficult time.”

     

  • Mnuchin told the Senate Committee that he and House Speaker Nancy Pelosi (D-CA) have “agreed to continue to have discussions.” (Wall Street Journal, Sept. 24)

Democrats Considering New Aid Proposal

House Speaker Nancy Pelosi (D-CA)

Pelosi has directed her committee chairs this week to assemble a scaled back coronavirus relief package of approximately $2.4 trillion that could be used for as a basis for potential discussions with the White House and Senate Republicans. (Politico, BGov, and The Hill, Sept 24)

  • Negotiations over a COVID-19 relief bill between Democrats and Republicans broke down in August over a nearly $1 trillion gulf between their proposals. 
  • The House passed a $3.4 trillion package in May (H.R. 6800), which is more than the $1.5 trillion President Trump indicated he would support and much larger than a $650 billion package supported by Senate Republicans.
  • House Democrats could vote on a new plan next week, which would appease lawmakers from battleground election states anxious to pass a pandemic aid package before adjourning to campaign – despite chances that a Democrat-only plan is unlikely to attract Republican support.

Speaker Pelosi said last week that the House would remain in session until an agreement is reached, and House Majority Leader Steny Hoyer (D-MD) clarified that Representatives would be on call to return to the Capitol on short notice in the event a deal is reached. (BGov, Sept. 15)

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Roundtable Board Selects Suffolk’s John Fish as Chair-Elect, Establishes Equity, Diversity & Inclusion Committee; Industry Leaders Discuss Investment Trends, Engage Lawmakers on National Policy Issues

Posted on by Trey Jackson

Fall Roundtable Meeting 2020

The Real Estate Roundtable’s Fall Meeting on Sept. 22 featured top-of-mind issues, including the latest economic and political forecasts; real estate’s diversity and inclusion efforts; prospects for pandemic risk insurance; and future economic stimulus initiatives, particularly those related to housing, rent and infrastructure.

Advocacy:  Roundtable Chair Debra Cafaro (Chairman and CEO, Ventas, Inc.) welcomed Roundtable members to the virtual meeting by summarizing The Roundtable’s effective, yet remote, advocacy work with industry stakeholders and Washington policymakers on the multi-faceted policy responses to the coronavirus – as well as on issues in the tax, capital and credit, sustainability and homeland security areas. (See for example, The Roundtable’s written statement for the committee and testimony before the Senate Banking Committee regarding the Federal Reserve’ Main Street Loan Facility. (Video of Sept. 9 testimony and Q&A )

Deb Cafaro and John Fish remote RER meeting

Leadership: Cafaro, above left, also announced that The Roundtable’s 24-member Board of Directors has selected John F. Fish, above right, (CEO & Chairman, Suffolk) as the organization’s Chair-Elect; appointed Jodie W. McLean (CEO, Edens) as its Secretary; and named Jeff T. Blau (CEO, Related Companies) as the inaugural Chair of the organization’s newly-established Equity, Diversity and Inclusion (ED&I) committee. 

Reference: 

  • Video on FY 2021 nominations for The Roundtable Board and comments by John Fish 
  • Video on The Roundtable’s ED&I committee and comments by Jeff Blau  

Investment-Panel-Intro-Screen


Investment Trends: Roundtable Chair Debra Cafaro led a discussion regarding “Emerging Global Real Estate Investment Trends” with Christoph Donner (Chief Executive Officer, Allianz Real Estate of America); Adam Gallistel (Managing Director, GIC Real Estate); Steven Hason (Managing Director, Head of Americas Real Assets, APG Asset Management US Inc.) and Roundtable Board Member Kathleen McCarthy (Global Co-Head of Blackstone Real Estate, Blackstone) – video of panel discussion.

Special Guests: The Roundtable’s Fall Business Meeting included virtual visits from the following guests: 

  • Senate Majority Leader Mitch McConnell (R-KY) – video
  • Senator Tim Kaine (D-VA) – video
  • Rep. Steve Stivers (R-OH) – video

See below for more details about this discussion regarding pandemic risk insurance. 

Next on The Roundtable’s meeting calendar is the all-member January 26-27 State of the Industry Meeting.

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House Vote on Stopgap Funding Bill Expected Next Week; White House Signals Possible Compromise on Pandemic Relief Package

Posted on by Trey Jackson

Capitol Dome Stormy weather

Congressional policymakers struggled today to finalize a bipartisan spending bill to fund the government past September 30 and avoid a shutdown.  House and Senate lawmakers disagree on when the temporary funding would expire – Republicans want the stopgap to end on Dec. 18 while Democrats are pushing for Feb. 26.  (RollCall, Sept. 14 and Politico, Sept. 18)

  • House Majority Leader Steny Hoyer (D-MD) stated on September 15 that a vote on the continuing resolution (CR) would be held sometime next week.  He added the CR will include language to extend the authorization for surface transportation and the National Flood Insurance Program.  “I am going to bring it to the floor early next week and hope that the Senate passes it either later next week or the first part of the following week,” Hoyer said. (BGov, Sept. 18)

COVID-19 Package Negotiations

Congressional leaders remained at an impasse this week on another coronavirus stimulus package, although the Trump Administration signaled compromise is possible.  Negotiations between Democrats and White House officials stalled in August.  (Roundtable Weekly, Aug. 4)

  • GOP lawmakers initially proposed a $1 trillion coronavirus stimulus proposal in July.  Last week, Senate Republicans attempted to advance a “skinny” COVID-19 aid bill for approximately $500 billion less that was blocked by Democrats. (Roundtable Weekly, Sept. 11).
  • Democrats are currently advocating a package of at least $2.2 trillion following passage of the $3.4 trillion HEROES Act by the House of Representatives in May.  (Axios, Sept. 10)
  • Speaker Nancy Pelosi (D-CA) said on Tuesday that the House would remain in session until an agreement is reached and Hoyer clarified that lawmakers would be on call to return to the Capitol on short notice in the event a deal is reached. (BGov, Sept. 15)
  • After a compromise $1.5 trillion pandemic aid proposal from the bipartisan House Problem Solvers Caucus was rejected on Tuesday by congressional Democrats and Republicans, the White House signaled the following day it was open to further negotiations.  (New York Times, Sept 15 and Vox, Sept. 16)
  • President Trump tweeted on Sept 16, “Go for the much higher numbers, Republicans, it all comes back to the USA anyway (one way or another!).”  White House Chief of Staff Mark Meadows added there was support for more aid to state and local governments and that the Administration would be willing to consider a $1.5 trillion package.  (CNBC, Sept 16.

Schumer and Pelosi joint statement

  • Speaker Pelosi and Senate Minority Leader Chuck Schumer (D-NY) said in a joint statement after Trump’s tweet, “We look forward to hearing from the President’s negotiators that they will finally meet us halfway with a bill that is equal to the massive health and economic crises gripping our nation.”
  • Treasury Secretary Steven Mnuchin said earlier this month that the next stimulus bill could be closer to $1.5 trillion.  Larry Kudlow, director of the White House National Economic Council, said yesterday in response to a question about a $1.5 trillion package: “I would say that’s in the range of plausibility.”  (Wall Street Journal, Sept. 18)
  • Senate Finance Committee Chairman Chuck Grassley (R-IA) yesterday told Bloomberg TV,  “The White House has been making some statements here recently that would never get hardly any Republicans in the United States Senate.  So this used to be the White House versus Pelosi up until about now.  Now the president’s coming in and saying ‘we can maybe go to $1.5 trillion.’ He better be careful of that because I don’t think that bill could get through the United States Senate.”
  • Today, Pelosi told Bloomberg Television that Democrats remain committed to a $2.2 trillion relief package but indicated they may include aid for “airlines, transportation in other forms, restaurants, retail, issues like that” in a relief  package.  (Transcript of Pelosi Interview on Bloomberg’s Balance of Power with David Westin, Sept. 18)

The need for policymakers to produce a pandemic aid package before the November elections will be a focus of discussions during The Roundtable’s Fall Meeting on Sept. 22.  Confirmed speakers include Senate Majority Leader Mitch McConnell (R-KY) and House Financial Services Committee Member Steve Stivers (R-OH).

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