(L-R): Hessam Nadji (Marcus & Millichap), Barry Altshuler (Equity Residential), Tom Bannon (California Apartment Association), Jeffrey DeBoer (Real Estate Roundtable), Daniel Ceniceros (Connect Media)
At Connect Apartments 2025 in Los Angeles this week, Real Estate Roundtable (RER) President and CEO Jeffrey DeBoer delivered the keynote Q&A session, outlining top legislative and regulatory priorities in the coming months.
Remarks
His remarks covered implementation of new tax rules on bonus depreciation and expensing, expansion of the Low-Income Housing Tax Credit, policies to encourage new housing supply, efforts to enhance energy grid access, and preparation for the scheduled 2027 expiration of the Terrorism Risk Insurance Act (TRIA).
Recognizing that his remarks came on Sept. 11, DeBoer emphasized the broader role of industry leaders in fostering collective action.
“For the past 24 years, our industry and its leaders have supported individual, business, and policy actions to respond to and prevent terrorism. Today we face a new reality that also requires a collective response,”he said.
He continued, “Our personal, social, and political discourse clearly has spiraled in a very dangerous direction. Many are now calling on political leaders to tone down their divisive rhetoric. We agree. But we also strongly believe that political leaders should not act alone. The Real Estate Roundtable, and our leaders, now urge that the millions of people in our industry work to find boundaries to inciteful rhetoric by rejecting actions and language that vilify and denigrate those whose views differ from our own.”
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-backedRevitalizing 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.
In May, RER joined a coalition of 15 national real estate organizations urging the DOL to repeal and revise its 2023 Davis-Bacon rule. (Letter, May 20 | Roundtable Weekly, May 23)
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.
After months of high-stakes negotiations, Congress this week passed the sweeping One Big Beautiful Bill Act, a comprehensive reconciliation package that overhauls tax policy, restructures federal spending, and advances numerous Real Estate Roundtable (RER) priorities as it heads to President Trump’s desk for signature. (Roll Call, July 3)
State of Play
The House passed the final version of the One Big Beautiful Bill Act this afternoon, following a narrow vote of 218–214, capping off weeks of negotiations and delivering a legislative victory to Republican leaders ahead of the July 4 deadline. In the end, two Republicans—Reps. Thomas Massie (R-KY) and Brian Fitzpatrick (R-PA)—joined all Democrats in opposing the bill. (The Hill, July 3)
“With one big, beautiful bill, we are gonna make this country stronger, safer, and more prosperous than ever before, and every American is going to benefit from that,” said House Speaker Mike Johnson (R-LA). “Today we are laying a key cornerstone of America’s new golden age.” (Politico, July 3)
The Senate passed the sweeping budget bill in a 51-50 vote on Tuesday, after almost 24 hours of debate, amendments, and a “vote-a-rama” that ended with Vice President JD Vance casting the tiebreaking vote in favor of passage. Three GOP senators—Rand Paul (R-KY), Thom Tillis (R-NC), and Susan Collins (R-ME) voted no. (Axios, July 2)
In an interview after the bill’s Senate passage, Senate Majority Leader John Thune (R-SD) acknowledged that the decision to make the measure’s business tax cuts permanent impacted its savings and overall strategy. “We really believed that permanence was the key to economic growth because it creates certainty,” he said. “All the models that we saw showed that you got more growth with permanence.” (PoliticoPro, July 1)
Roundtable Advocacy
The final legislation advances a broad array of policies that support capital formation, real estate investment, and housing development, while repealing harmful proposals like Section 899 and preserving longstanding tax rules vital to CRE.
“This legislation represents a meaningful step toward strengthening communities, expanding housing opportunities, and supporting long-term economic growth,” said Jeffrey DeBoer, President and CEO of RER. “By advancing policies that encourage investment and preserve small business tax parity, Congress is helping to revitalize neighborhoods, create jobs, and ensure all Americans benefit from a stronger built environment.
DeBoer added, “We are, of course, disappointed that the overall bill is predicted to increase the deficit and national long-term debt. However, we hope that the pro-growth aspects of the bill will narrow both by significantly growing the economy and providing revenues greater than those now projected. Likewise, we are concerned with predictions by some regarding the impact of spending cuts on research and needed health care for Americans.”
RER’s advocacy efforts were particularly successful in eliminating several provisions that would have severely impacted CRE, including Section 899, known as the “revenge tax,” and harmful limitations on state and local tax deductions for pass-through businesses.
Speaking to Bisnow regarding the impact of the tax provisions on real estate, Ryan McCormick, RER’s SVP and Counsel, said, “From the bill’s investment in housing and low-income communities to its fair treatment of entrepreneurial and pass-through businesses, the legislation strikes the right balance … it should spur job-creating capital investments in commercial properties across the nation.” (BisNow, July 1)
Tax Policy
The final legislation includes several tax provisions that will provide significant benefits to commercial real estate and support long-term economic growth:
Permanent Business Tax Cuts: The bill makes permanent several business tax deductions from the 2017 Tax Cuts and Jobs Act (TCJA), including the Section 199A deduction for pass-through businesses and interest deductibility rules under Section 163(j).
Section 899: Late last week, lawmakers removed the Section 899 provision known as the “revenge tax” from the bill after the Treasury Department secured an international tax agreement with G7 countries. RER strongly advocated for changes to the measure, warning that the tax would have deterred foreign investment in U.S. commercial real estate and weakened capital formation. (Roundtable Weekly, June 27) (BisNow, July 1) (Commercial Property Executive, July 1)
Opportunity Zones: OZs are now a permanent feature of the tax code, though deferral periods for eligible gains are shortened through the end of 2026—a technical issue that RER will continue to address in discussions with Congress and Treasury.
Low-Income Housing Tax Credit (LIHTC): The bill preserves and enhances the LIHTC program, supporting the construction of affordable housing nationwide.
Bonus depreciation & expensing: Full expensing and 100% bonus depreciation for qualifying property are restored and made permanent, providing significant cash flow benefits for property owners undertaking capital improvements.
SALT workarounds preserved: The final bill drops proposed changes to state and local tax deductibility on pass-through business income, preserving current law that allows deductibility through state pass-through entity tax regimes.
Condominium construction tax accounting: The legislation includes provisions the RER has advocated for since 2015, allowing condo developers to use the completed contract method of accounting, aligning tax liability with actual receipts.
Excess business losses: The revised Senate bill avoids a controversial proposal from earlier drafts that would have permanently siloed active pass-through business losses, instead opting to extend current law under Section 461(l) without restricting taxpayers from using those losses against wages and investment income. This approach preserves flexibility for entrepreneurs, start-ups, and two-earner households and avoids undermining the principle of measuring true net income.
Energy Tax Credits
For months, clean energy tax incentives enacted under the Inflation Reduction Act (IRA) have been a point of contention in both the House and Senate, with several Republican lawmakers urging leadership to take a more targeted approach to scaling back the IRA’s provisions—while maintaining incentives that support both traditional and renewable energy sectors. (RW, April 25) (CBS News, July 1)
Ultimately, the final legislation significantly scales back the IRA’s clean energy tax incentives by accelerating the phase-out of wind and solar credits, while dropping a controversial excise tax on projects using foreign components and preserving eligibility for already planned or approved developments that begin construction before mid-2026. (PoliticoPro, July 1) (Bloomberg, July 1)
The Section 48E Investment Tax Credit (ITC)for wind and solar projects remains in the tax code, but projects that begin construction 12 months after the bill’s enactment must be placed in service by the end of 2027.
The Section 179D deduction for energy-efficient commercial building construction and retrofits is now limited to projects that begin construction by June 30, 2026.
Similarly, the 45L tax credit for energy-efficient new residential construction expires for homes “acquired” after June 30, 2026.
Importantly, ENERGY STAR’s current budget for FY2025 was not affected by any of the funding rescissions in the final bill.
At this week’s BOMA International Conference, RER’s SVP and Counsel Duane Desiderio joined John Boling (VP, Advocacy & Building Codes, BOMA International) for a panel discussion on ENERGY STAR Portfolio Manager, highlighting the program’s legal foundation, bipartisan economic appeal, and importance to real estate stakeholders. (Commercial Property Executive, July 2)
RER will continue engaging with lawmakers through the annual appropriations process to ensure that FY2026 federal funding bills (for spending starting October 1) support ENERGY STAR. (Commercial Property Executive, July 2)
What’s Next
With the One Big Beautiful Bill Act heading to the president’s desk, attention now turns to the appropriations process and additional reconciliation opportunities.
Speaker Mike Johnson has expressed interest in pursuing additional budget reconciliation efforts, a process that Congress can undertake at the end of the fiscal year.
In an interview on Fox News Tuesday, Johnson said, “This is just a step in a sequence of events. We’re intending to do more reconciliation work. The plan is to do one in the fall for FY26 budget year and we can also squeeze in a third one for FY27 before this Congress is up.” (Politico, July 2) (Punchbowl News, July 2)
RER will continue to provide in-depth analysis in the coming days and weeks on the reconciliation bill’s implications for commercial real estate, including technical implementation, market impacts, and policy recommendations.
As the Federal Reserve’s latest Beige Book reveals, the U.S. economy is continuing to adjust to shifting conditions, with commercial real estate leaders focusing on strategies to navigate ongoing uncertainty and emerging opportunities. (The Fed, June 4)
Beige Book Findings
The Beige Book published this week, reported that “all Districts reported elevated levels of economic and policy uncertainty, which have led to hesitancy and a cautious approach to business and household decisions.”
The report, based on surveys and interviews conducted through May 23, noted that the overall outlook remains “slightly pessimistic and uncertain,” unchanged from the prior report. (Bloomberg, June 4)
Nine of the 12 Federal Reserve districts reported either a contraction in economic activity or no change in growth; only a few districts, including Richmond, Atlanta, and Chicago, experienced modest growth. (Market Watch, June 4)
Commercial construction and real estate activity also declined overall, with the office sector continuing to lag. In San Francisco, construction activity remained subdued due to uncertainty over trade policy and rising material costs. (The Fed, June 4)
Tariffs were mentioned 122 times in the report, compared to 107 times in April, reflecting rising concerns about inflationary pressures. (CNBC, June 4)
In Boston, the Fed noted deals took longer to close, and “foreign investors grew generally skittish about investing in the United States.”
Economic Conditions & CRE
This week, during Lument’s webcast, “Turning Point: Multifamily Strategies Amidst Policy and Economic Shifts,” RER’s President & CEO Jeffrey DeBoer discussed how federal policies, including tariffs, liquidity, and the ongoing tax debates in Washington, are reshaping investor strategies.
DeBoer also emphasized that uncertainty and volatility are hindering investment decisions, mirroring the Beige Book’s findings of delayed business spending.
RER’s Q2 Sentiment Survey reflected similar caution, with the index falling to 54 as executives cited policy uncertainty, rising costs, and muted investor confidence—echoing the Beige Book’s insights on slowing activity and elevated economic risk. (Roundtable Weekly, May 23)
On Wednesday, the administration doubled tariffs on steel and aluminum imports from 25% to 50%, adding further pressure on construction costs and heightening unpredictability. (BisNow, June 4)
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 tensions are impacting U.S. commercial real estate—from delayed development timelines to increasing construction costs and reduced foreign investment. (ULI, May 13)
What’s Next
The Fed will consider the Beige Book findings at its June 17–18 meeting as it navigates a delicate balancing act between persistent inflation risks and ongoing trade tensions.
Congress will return to Washington next week with an ambitious agenda—kicking off markups for a sweeping reconciliation package that would enact the President’s legislative agenda and could shape the fiscal and tax landscape for years to come. (CBS, April 24)
Markup Schedule
The Judiciary, Homeland Security, and Armed Services Committees are expected to lead the process starting the week of April 28. These panels have jurisdiction over spending on border security and defense and are tasked with allocating $110 billion, $90 billion, and $100 billion respectively under the House budget resolution. (Politico, April 17)
The Energy and Commerce Committee is targeting May 7 for its markup. The committee is required to find $880 billion in savings, which may involve changes to Medicaid, electric vehicle mandates, and other policy areas. (Punchbowl News, April 23)
The Financial Services Committee is set to vote on April 30 on its share of the reconciliation package, which must include a minimum of $1 billion in cuts over 10 years. (PoliticoPro, April 23)
Speaker Mike Johnson (R-LA) and Senate Majority Leader John Thune (R-SD) have expressed a shared goal of advancing the reconciliation package by Memorial Day.
“We are pushing it very aggressively on schedule, as you said, to get it done by Memorial Day,” Johnson said this week, citing the need to tame stock market instability.
Johnson also said he and House Majority Leader Steve Scalise (R-LA) had a conference call with the 11 House GOP committee chairs on Wednesday to discuss the next steps for Trump’s “big beautiful bill.” (PoliticoPro, April 23)
Tax Policy
Tax legislation will be a cornerstone of the reconciliation package as lawmakers prepare to extend the major tax provisions from the Tax Cuts and Jobs Act (TCJA) that are scheduled to expire at the end of 2025. (PoliticoPro, April 14)
The House Ways and Means Committee is eyeing a potential two-day markup session on May 12 and 13. (PoliticoPro, April 24)
House GOP leaders, including Ways and Means Committee Chair Jason Smith (R-MO), are scheduled to meet Wednesday with blue-state Republicans to discuss the personal SALT deduction cap.
The meeting marks a key moment in resolving one of the most politically sensitive issues in the tax bill. While most Republicans support maintaining the current $10,000 cap, several GOP lawmakers from high-tax states have threatened to oppose the package unless the cap is raised to at least $25,000. (Punchbowl News, April 25)
As policymakers prepare the first major tax bill since 2017, The Roundtable (RER) and the real estate industry are focusing heavily on preserving thefull deductibility of business-related property taxes. The deductibility of business-related state and local income and property taxes has emerged as a central issue as lawmakers look for ways to pay for new tax provisions.
A cap on the deductibility of property taxes paid by U.S. businesses could have devastating consequences for commercial real estate owners, developers, and investors nationwide, reversing the benefits of the 2017 tax bill and raising effective tax rates on real estate to 1970s-era levels near 50%. (RW, April 11)
State and local property taxes represent 40% of the operating costs of U.S. commercial real estate, a greater expense than utilities, maintenance, and insurance costs combined. RER urges its members to weigh in with Members of Congress against restrictions on deducting state and local property taxes.
Other important issues for real estate in the current tax discussions include: tax parity for pass-through businesses, potential tax increases on carried interest, preservation of the opportunity zone tax incentives, and a possible expansion of the low-income housing tax credit. (Bloomberg, April 21)
Potential Challenges Ahead
The reconciliation effort faces serious political hurdles, particularly regarding spending cuts and revenue-raising provisions.
House Republicans have a narrow majority, and leadership must secure support from nearly every member of their caucus. Proposed cuts to Medicaid and SNAP could generate pushback from moderate Republicans, while debates over “payfors” continue to divide lawmakers.
The House and Senate are also operating under different reconciliation instructions, which could further complicate aligning final legislation.
IRA & Energy Tax Credits
Since budget negotiations began, Republican leadership has suggested repealing some or all of the Inflation Reduction Act’s (IRA) clean energy tax credits as a way to reduce federal spending. However, several GOP lawmakers have advocated preserving specific provisions that benefit their constituents. (Reuters, April 21)
In a recent letter to Leader Thune, four Senate Republicans urged a more selective approach to scaling back the IRA’s tax provisions. Additionally, 21 House Republicans expressed their support for maintaining energy incentives that benefit both traditional and renewable energy sectors in a March letter to House Ways and Means Chair Jason Smith (R-MO). (Newsweek, April 21)
RER at the Forefront
This week, RER President and CEO Jeffrey DeBoer appeared on the special webcast “Real Recession Risk or Temporary Distraction?” hosted by Marcus & Millichap President and CEO Hessam Nadji. DeBoer joined Moody’s Analytics Chief Economist Mark Zandi to discuss recession risks, inflation, and the broader impact of trade and tax policy in Washington. (Watch)
DeBoer was also a keynote speaker at the University of Wisconsin-Madison’s James A. Graaskamp Center Spring Board Conference earlier this month, where he shared his insights on how the Trump administration’s economic agenda, regulatory changes, tariffs, and tax policy are impacting commercial real estate.
RER will continue to monitor developments closely as Congress advances a package that could have far-reaching implications for commercial real estate, business taxation, and economic growth.
President Donald Trump’s second term is rapidly taking shape, with sweeping executive orders, quick nominations and bold policy announcements advancing in the first few days of his second administration. From tax policy to housing, immigration, and energy initiatives, the commercial real estate sector faces a dynamic and fast-changing landscape.
Tax Policy
TCJA Renewal: Efforts to extend key provisions of the 2017 Tax Cuts and Jobs Act (TCJA) are a key priority for the Trump administration and Republicans in Congress, with significant implications for commercial real estate.
A number of RER priorities are at stake, including maintaining the reduced tax rate on capital gains, extending Opportunity Zones and the Section 199A deduction, safeguarding like-kind exchanges and enacting federal tax incentives for property conversions to address the housing shortage. (Roundtable Weekly, Jan. 10)
RER, alongside a coalition of over 230 trade groups, wrote to Congress this week in support of the newly introduced Main Street Tax Certainty Act of 2025, which would make the 20-percent deduction for small and family-owned businesses Section 199A permanent to sustain economic growth, protect millions of jobs, and support Main Street competitiveness. (Sen. Daines Press Release, Jan. 23)
The content of the reconciliation package continues to be heavily debated, with multiple areas of intra-party disagreement among Republicans to overcome in order to reach a deal. Concerns about pay-fors, the growing debt, budget cuts and proposals to eliminate the state and local tax deduction (SALT) remain. (Politico, Jan. 22)
RER President & CEO Jeffrey DeBoer appeared on Marcus & Millichap’s 2025 Economic & CRE Outlook webinar with a panel of industry leaders discussing the macro environment, the potential policies of the new administration and tariffs, affordable housing, tax policy expectations and more.
Tariffs
Proposed Tariffs: Trump has signaled a desire to implement sweeping tariffs, including a 25% tariff on goods from Mexico and Canada that could go into effect on Feb. 1. Trump has also considered a universal 20% tariff on all imports and a 60% tariff on China. (CNN, Jan. 21)
These measures are aimed at boosting domestic manufacturing and addressing trade imbalances but could have ripple effects on construction costs and material availability. Any tariffs on imported materials like steel, aluminum and lumber are likely to drive up costs for developersand impact efforts to address the housing shortage. (BisNow, Jan. 17)
The scale and scope of the President’s tariff plans are in flux. Trump’s advisors have reportedly considered a phased-in tariff approach. It’s also possible that Trump makes use of the White House’s exemption authority to protect certain industries or goods deemed vital. (Bloomberg, Jan. 13)
Regulatory Work
President Trump also signed an executive order freezing all ongoing regulatory work across the federal government, halting the proposal or publication of new rules until reviewed and approved by his administration.
The freeze delays the effective date of recently published rules by 60 days, allowing time to decide which Biden-era regulations to keep, rewrite, or discard. (National Law Review, Jan. 23)
As with many other parts of the U.S. financial regulatory framework, the pending Basel III Endgame proposal may end up being reproposed with a capital neutral scheme, giving a potential boost to liquidity and credit capacity under the new Trump administration.
Disaster Aid and NFIP Extension
California Fires: Congress and the new administration will soon need to providebillions of dollars inaid to assist those affected by the Los Angeles wildfires. The catastrophe could reach up to $275 billion, with then of thousands of homes and businesses will need to be rebuilt, making federal assistance essential. (Roundtable Weekly, Jan. 17)
NFIP: The increasing severity of natural disasters—including the devastating hurricanes last year—has increased the importance of the National Flood Insurance Program (NFIP), whichis set to expire on March 14 unless reauthorized. The Senate Banking, Housing and Urban Affairs Committee held a hearing on Thursday to discuss the program’s renewal. (Politico, Jan. 22)
Housing
Fannie Mae and Freddie Mac Privatization: Trump’s team is expected to resume efforts to privatize the government-sponsored enterprises (GSEs), which could significantly reshape multifamily financing markets.
Trump has nominated Bill Pulte, to lead the Federal Housing Finance Agency (FHFA), which oversees the GSEs—a move experts say is part of Trump’s push towards privatization. (CRE Daily, Jan. 17)
Deregulation to Spur Housing Development: Trump has pledged to roll back environmental and building regulations that hinder housing construction. This includes streamlining permitting processes, relaxing restrictions and accelerating project timelines.
Trump’s nominee for the Department of Housing and Urban Development (HUD), Scott Turner, has pledged to cut regulations that he says are stifling development. These efforts aim to increase housing supply, particularly in high-demand markets. (BisNow, Jan. 17)
Immigration and Labor
Deportations: Trump’s plans for mass deportations could have significant effects on the housing industry. Immigrants make up over 25% of the construction laborer workforce in the U.S., an industry where more workers are sorely needed—especially if affordable housing goals are to be met. (Bisnow, Jan. 17)
Depending on the extent of Trump’s deportation plans, CRE projects may face rising costs and delays if the construction workforce is severely affected. (NBC News, Jan. 21)
According to the Associated Builders and Contractors, the construction industry needs 439,000 new workers this year to meet rising demand. The need for construction resources is urgent, with Los Angeles requiring rebuilding after devastating fires and a nationwide surge in data center construction on the horizon. (Axios, Jan. 24)
Energy and Infrastructure
Emergency Powers: On the day Trump took office, he declared an energy emergency—giving the White House new authority to speed up the manufacture of certain products under the Defense Production Act, issue waivers on certain gasoline restrictions and restrict energy trade, among other powers—likely in service of Trump’s stated effort to “drill, baby, drill.” (The Hill, Jan. 20)
Data Centers: Trump also announced a $500 billion “Stargate” initiative designed to expand AI-focused data center infrastructure. The executive order prioritizes the use of fossil fuels to power these facilities and streamlines permitting processes for large-scale projects. (AP News, Jan. 22)
The investment could help hasten the buildout of high-demand data centers, which are limited by the availability of energy resources and infrastructure. (BisNow, Jan. 22)
Looking Ahead
With the whirlwind of activity coming out of the Trump administration and Congress, RER will continue to proactively evaluate policy developments as legislative efforts and White House implementation of executive orders progress.
This week, House Freedom Caucus Members proposed ending the ability of businesses to deduct their state and local business and property taxes on their federal income tax returns. (Politico, Jan. 15)
Why It Matters
The proposal was raised as a potential offset for relief from the SALT cap on individuals.
The proposal was also included in a “menu” of potential policy options prepared by the House Budget Committee for tax and budget reconciliation legislation. (PoliticoPro, Jan. 17)
The Budget Committee has a key role in setting the overall size of any reconciliation bill, but the actual details of tax changes fall under the jurisdiction of the House Ways and Means Committee.
Industry & Congressional Response
“Property taxes and other state-level business taxes are a basic cost of doing business. Denying the deductibility of these business taxes is nonsensical and would be devastating to American businesses, and especially U.S. real estate. The purpose of the income tax is to measure and tax income. Under the proposal, we would no longer have an income tax, we would have a tax on gross revenue. It would penalize existing property owners, artificially distort business decisions, and raise flashing red lights for anyone even considering a long-term capital investment in the United States,” said Jeffrey DeBoer, President and CEO of The Real Estate Roundtable.
Senate Democratic Leader Chuck Schumer (D-NY) addressed the proposal on the Senate floor earlier today. (Senate Democrats, Jan. 17)
“There is no scenario under God’s green Earth that New York taxpayers will ever accept another unfair SALT cap like the House Freedom Caucus proposes….I will do everything I can, first to remove the entire SALT cap tax, and second to never let a new proposal that for the first time imposes the SALT cap on businesses, small and large, to be put into effect. I’m going to do everything I can to fight this dastardly proposal,” said the Senator.
The House Freedom Caucus is one of many factions in the House Republican Conference that will have significant leverage over any tax changes in 2025 due to Republicans’ extraordinary slim majority in the House.
House Ways and Means Committee Chairman Jason Smith (R-MO) and House SALT Caucus Co-Chair Rep. Tom Suozzi (D-NY) are scheduled to address Roundtable members at the State of the Industry Meeting next week.
As 2024 comes to a close, the commercial real estate industry has made significant strides in recovery and adaptation.
2024 Roundtable Highlights
Over the past year, industry confidence has rebounded. RER’s Q4 Sentiment Index reached 73—a three-year high—and a 12-point jump from Q1 of this year. Despite ongoing challenges, the industry has demonstrated resilience and emerged stronger.
RER President & CEO Jeffrey DeBoer spoke about the industry’s 2025 priorities in a recent episode of the Leading Voices in Real Estate podcast, saying, “Real estate cuts across all aspects of our economy, and it’s what makes cities strong. You can’t find a time in history where nations have been strong without healthy cities. Right now, cities are struggling, and we want to help them back.”
Looking ahead to 2025, RER remains focused onadvancing policies that support liquidity, innovation, and adaptive reuse to ensure CRE remains a pillar of economic growth and community development.
2025 Policy Priorities Survey: Next week we will be distributing our Policy Issues Survey to all members to gather input on our policy priorities for 2025.
Top Takeaways from 2024
Key drivers of the industry’s growing confidence include easing interest rates and improving financial conditions, which have helped to stabilize asset values and encourage investment activity. By year-end, easing monetary policy and growing investor confidence have started to open up capital availability, with more progress expected in 2025. (Roundtable Weekly, Nov. 8)
Office-to-residential conversions saw a banner year, with more than 70 projects completed in 2024. Bolstered by the growing number of state and local incentive programs, 71 million sq. ft. (1.7% of U.S. office inventory) was undergoing or planned for conversion as of Q3. Property conversions will continue to see growing momentum in 2025, helping to alleviate elevated vacancy rates. (CBRE, Nov. 11)
Loan modifications and extensions, encouraged by regulators and supported by RER, have helped many distressed owners stabilize properties and avoid defaults. While 2024 was a challenging year for the office sector, markets have started to reach an inflection point as capital becomes more available, vacancy rates start to peak, return-to-office momentum grows, and transaction activity picks up. (Roundtable Weekly, Nov. 15)
Meanwhile, multifamily and industrial assets—especially data centers—continued to demonstrate strength, benefiting from robust tenant demand and the rapid expansion of AI-driven technologies. (CBRE, Dec. 11)
Prospects for 2025 and Trends to Watch
Economic growth: The CRE sector is poised to benefit from moderate economic growth and a more favorable interest rate environment. Investors are cautiously optimistic about improving liquidity and stabilizing valuations, which could unlock much-needed capital. (Commercial Observer, Dec. 10, CBRE, Dec. 11)
Office recovery: In San Francisco, office vacancy rates have dropped for the first time in four years—a sign that the office sector is beginning to turn the corner on the pandemic-era economy. Conversion activity is also expected to remain robust, supported by state and local incentives. (S.F. Chronicle, Dec. 16, GlobeSt., Dec. 17)
As RER Chair Emeritus William C. Rudin (Co-Executive Chairman, Rudin) recently told Squawk Box, “the demise of office and New York City are greatly exaggerated…there is capital, the CMBS market is back, the banks are coming back to the market,” indicating a welcome trend that could help drive an office revival across America’s downtowns.
The data center market will likely see explosive growth driven by artificial intelligence and cloud computing, although power constraints may limit development. Demand for data centers is expected to grow 160% by 2030, driving the buildout of the physical infrastructure needed to support the next digital revolution. (Goldman Sachs, May 14) (McKinsey, Oct. 29)
Political and regulatory shifts following the 2024 election—including potential changes to trade, immigration, and fiscal policies with a new Congress and presidential administration—could pose new opportunities or risks in 2025. Collaborating with and educating policymakers on the impact these policies have on real estate will be crucial to ensuring that public policies support economic growth, job creation, housing affordability, and industry stability.
Heading into 2025, RER will continue advocating for policies that strengthen economic growth and capital availability while addressing industry challenges, including expanded tax credits for affordable housing and property conversions, permitting reform, and other initiatives that support a vibrant and resilient CRE sector.
Real Estate Roundtable President and CEO Jeffrey DeBoer has been recognized as one of the “Top Lobbyists” in Washington, D.C. for 2024, according to the prominent policy news publication, The Hill. This marks the seventh consecutive year that DeBoer has received this honor. (The Hill, Dec. 5)
The Hillnoted that their list details “some of the best in the business and those that have been “go-to advocates during a year defined by unprecedented political events, legislative logjams, federal spending cut crusades and big rulemaking swings by the outgoing Biden administration.”
DeBoer stated, “I am truly honored to be recognized by The Hill for my work, especially in a city with more than 12,000 lobbyists. This recognition, though, really is a testament to the overall Roundtable team, leadership, and membership.”
DeBoer added, “This acknowledgment underscores the importance of the fact-based advocacy work we do to advance policies that foster solid real estate asset values, spur job opportunities, economic growth and strengthen communities nationwide.”
With control over the White House and both chambers of Congress decided, attention has turned to how President-elect Donald Trump’s second term will affect the commercial real estate industry.
Looking Ahead
As Roundtable President & CEO Jeff DeBoer noted to BisNow last week, the new administration represents a chance to strengthen policymakers’ understanding of the critical role CRE plays in the economy. (BisNow, Nov. 12)
“Anytime that there’s a turning of the page, there’s an opportunity to emphasize new issues, or to bring priority to older issues that maybe have been pushed out by previous leaders,” DeBoer told BisNow. DeBoer also highlighted key policy priorities for commercial real estate to move forward in the coming administration, including housing, tax, capital markets, and energy.
Housing Policy
Interagency task force: The Roundtable is calling for a federal task force focused on expanding the housing supply, particularly affordable housing. This task force would coordinate efforts across agencies to streamline building processes and reduce regulatory barriers, incentivizing new development across the U.S.
Property conversions: The administration should support federal incentives for (such as low interest loans) converting obsolete office buildings into residential housing. Modeled after tax credits for historic preservation, bipartisan legislation like the Revitalizing Downtowns and Main Streets Act could help relieve the national housing shortage. (Roundtable Weekly, July 12)
Tariff concerns: Proposed tariffs on materials like lumber, steel, concrete, glass and appliances could impact housing supply: “By putting tariffs on housing materials, you will be indirectly increasing costs for buyers and renters and making it more difficult to solve this housing crisis,” said DeBoer.
Tax Policy
With key provisions of the Tax Cuts and Jobs Act of 2017 (TCJA) expiring soon, tax legislation will likely be central to President-elect Trump’s first 100 days.
Capital gains: Long-standing elements of the tax code, including the reduced rate for capital gains, the ability to reinvest through like-kind exchanges, and step-up in basis of assets at death, are critical for real estate businesses and encourage productive investment and economic growth. RER will continue to advocate that these provisions be maintained.
Section 199A: The qualified business income deduction for pass-through businesses, known as Section 199A, ensures that small businesses can compete on a level playing field with public corporations. RER supports extending the deduction, which is currently set to expire.
Foreign investment: Restrictions on foreign investment discourage capital formation and could hinder growth in real estate at a time when increasing the supply and availability of capital is critical to the industry’s recovery. Policymakers should avoid imposing additional restrictions or tax burdens on foreign investors, and consider repealing or reforming the Foreign Investment in Real Property Tax Act (FIRPTA).
Capital Markets
Strengthening capital flows in real estate is a top priority, as lending and credit availability have remained relatively weak since the pandemic and are only recently starting to see improvement.
Interest rates: Policymakers should carefully consider the inflationary effects of fiscal policies to maintain a favorable interest rate environment. Avoiding increased capital requirements, such as Basel III Endgame proposal, is also necessary to prevent hindering growth.
Energy Policy
With the rise of data centers, AI and other energy-intensive sectors, addressing energy capacity and permitting is a critical bipartisan need and “very important” to RER’s agenda, as DeBoer noted.
RER is committed to working proactively and productively with President-elect Trump and the 119th Congress to support the needs of the economy and commercial real estate industry.
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