White House Imposes Tariffs on China, Delays on Canada and Mexico

Over the past week, new developments have emerged regarding tariffs affecting China, Canada, and Mexico. As the situation continues to evolve, industry leaders are closely monitoring the status of these executive orders and their impact on affordable housing and the cost of essential construction materials.

State of Play

  • Tariffs on these three nations went into effect on February 1. Currently, tariffs on imports from Canada and Mexico are on a 30-day hold, while the additional duties on Chinese goods are in effect. (WSJ, Feb. 4)
  • Shortly after the announcements, President Trump reversed course and paused the tariffs on Mexico for one month following a conversation with Mexican President Claudia Sheinbaum. (ABCNews, Feb. 3)
  • As part of the arrangement reached with the U.S., President Claudia Sheinbaum of Mexico said her country would deploy to the U.S.-Mexico border 10,000 members of the Mexican National Guard to focus on curbing the flow of fentanyl and illegal migrants into the U.S.  (New York Times, Feb. 3)
  • After negotiations, Canadian Prime Minister Justin Trudeau and President Trump also agreed to a 30-day pause on the tariffs. Trudeau posted on X that the pause would occur “while we work together,” stating that his government would name a fentanyl czar, list Mexican cartels as terrorist groups and launch a “Canada-U.S. Joint Strike Force to combat organized crime, fentanyl and money laundering.” (APNews, Feb. 3) 
  • Chinese and U.S. officials have yet to arrive at a similar agreement as Canada and Mexico. Beijing is readying an opening bid to try to head off greater tariff increases and technology restrictions from the Trump administration. (WSJ, Feb. 3)
  • The Customs Tariff Commission of China’s cabinet, the State Council, imposed 15% tariffs on U.S. coal and liquefied natural gas imports, while raising levies on crude oil, agricultural machinery and certain vehicles. (WSJ, Feb.4)

Commercial Real Estate Impact

  • Higher tariffs on Chinese steel and aluminum will increase structural material costs, while tariffs on Canadian lumber will impact framing and finishing costs.
  • Additionally, any trade disruptions with Mexico could further strain budgets by limiting access to affordable cement, steel, and glass. (Capright, Feb.5)
  • The National Association of Home Builders (NAHB) has raised concerns about how tariffs on materials like Canadian softwood and Mexican gypsum could significantly increase construction costs, thereby raising new home prices. (Axios, Jan. 31)
  • Sixty-four percent of a home’s construction cost is building materials—27% of which are supplied by China, 11% by Mexico and 8% by Canada, according to data from the NAHB. (GlobeSt, Feb. 6) (Bloomberg, Feb.3)
  • Imposing additional tariffs on these imports will raise material costs, ultimately driving up housing prices as the U.S. works to rebuild from natural disasters and address a severe housing supply shortage.

Tariffs and Clean Materials

  • Congressional Republicans have joined Trump in exploring a possible carbon-specific clause in future rounds of tariffs, with the goal being to leverage data showing that the United States produces certain materials “cleaner” than foreign adversaries—namely China—and impose a fee on certain imports.
  • Recently, Sen. Bill Cassidy (R-LA) proposed a bill, the “Foreign Pollution Fee Act,” that would impose a “foreign pollution fee” on imported carbon-intensive products—including construction materials. (RW, Jan.17)
  • The Roundtable submitted comments on the Foreign Pollution Fee Act last month. The letter raises concerns regarding the impact of a carbon tariff on affordable housing construction, rebuilding after natural disasters, and technical issues on calculating “indirect emissions” associated with product manufacturing. The letter suggests forward-thinking refinements to the bill’s language.

As attention now shifts towards the new March 1 deadline, The Roundtable will continue to provide updates as the global trade situation evolves.

Federal Reserve Opts Out of Cutting Rates

The Federal Open Market Committee (FOMC) held the federal funds target range steady at 4.25% to 4.50% on Wednesday, as widely anticipated, during its first meeting of 2025. This decision marks a departure from three consecutive rate cuts, which collectively lowered the target range by 100 basis points since September.

Fed’s Decision

  • Chair Fed Jerome Powell indicated that inflationary trends are headed in the right direction. The Fed maintained its assessment that the risks to its dual mandate—promoting a strong labor market and controlling inflation—remain “roughly in balance.” (ConnectCRE, Jan. 29)
  • The country’s inflation rate remains somewhat elevated above the Fed’s target of 2%. In projections released at last month’s meeting, most officials signaled they expected the Fed to lower rates in the year ahead, but were less certain over how many times the central bank would cut.
  •  Most of them penciled in two rate cuts this year, down from four cuts in projections released last September, assuming progress in lowering inflation continued. (CoStar, Jan.29) (WSJ, Jan.29)

Looking Ahead

  • Powell highlighted that future decisions will be guided by “real progress” in bringing inflation down toward the Fed’s target or “some weakness” in the labor market. (ConnectCRE, Jan.29) 
  • President Donald Trump’s plans to cut taxes, impose hefty tariffs on key imports and deport millions of immigrants who lack permanent legal status have generated unusual uncertainty about the course of the economy, inflation and interest rates. (USAToday, Jan. 27)
  • Thomas LaSalvia, Moody’s head of commercial real estate economics, told CoStar News in an email that “all eyes are now shifting away from Fed action and towards economic consequences of new administration policies.” He added that “moving forward, the extremity of those policy actions will be more influential on economic health.” (CoStar, Jan.29)

Pressure From The White House

  • Trump says he will “demand” lower interest rates in a virtual address last week to the World Economic Forum in Davos, Switzerland.
  • When asked about the comments, Powell, sought to stay above the fray. “I’m not going to have any response or comment whatsoever on what the president said. It’s not appropriate for me to do so,” he said. “The public should be confident that we will continue to do our work as we always have, focusing on using our tools to achieve our goals.” (USNews, Jan.27)
  • In the wake of the Fed’s interest rate announcement, President Trump took to Truth Social: “Because Jay Powell and the Fed failed to stop the problem they created with Inflation, I will do it by unleashing American Energy production, slashing Regulation, rebalancing International Trade, and reigniting American Manufacturing, but I will do much more than stopping Inflation, I will make our Country financially, and otherwise, powerful again!” (TheHill, Jan.29)

What to Watch: Tariffs

  • White House Press Secretary Karoline Leavitt told reporters today President Trump plans to move forward with a 25% tariff on imports from Canada and Mexico starting tomorrow, and an additional 10% tariff on Chinese imports. (USA Today, Jan. 31)
  • Howard Lutnick, Trump’s Commerce Secretary Nominee, told the Senate during his confirmation hearing this week, that he advised Trump to impose country-by-country tariffs to restore trade “reciprocity” and vowed to tighten restrictions on China’s access to advanced AI technology. (Reuters, Jan. 29)
  • These tariffs could have significant repercussions for the U.S. economy, including housing affordability. Any tariffs on imported materials like steel, aluminum and lumber are likely to drive up costs for developers and impact efforts to address the housing shortage. (Roundtable Weekly, Jan. 24 | Nov. 27)

The Roundtable will continue to track coverage on interest rates and tariffs, and the implications for commercial real estate.

Industry Leaders Convene for 2025 State of the Industry Meeting

This week, The Real Estate Roundtable’s (RER) State of the Industry meeting brought together policymakers, industry leaders, and experts to discuss key policy issues shaping debates in Washington and impacting the economy and commercial real estate industry.

2025 State of the Industry Meeting

  • Roundtable Chair Kathleen McCarthy (Global Co-Head, Blackstone Real Estate) opened the meeting by welcoming attendees, setting the stage for discussions on industry priorities and advocacy opportunities, and highlighting key member priorities for the year ahead.
  • RER President & CEO Jeffrey DeBoer highlighted the organization’s unique strengths in policy advocacy, which is known for its trusted, fact-based, and data-driven approach. He also acknowledged members for participating in the annual policy issues survey, which revealed widespread concern about tariffs and strong support for priorities like tax reform, housing incentives, reducing regulatory barriers, energy infrastructure, insurance, and cybersecurity resiliency.

Meeting Speakers

  • Geopolitical expert John Sitilides (Principal, Trilogy Advisors LLC; National Security Senior Fellow, Foreign Policy Research Institute) gave a presentation on “Washington & the World: The New Geopolitics of Great Power Competition” and discussed the current geopolitical dynamics and vulnerabilities affecting global commerce and energy.
  • Rep. Darin LaHood (R-IL) (Member, House Committees on Ways and Means; and  Permanent Select Committee on Intelligence) discussed the U.S.-China economic relationship, extending the Tax Cuts and Jobs Act (TCJA) tax cuts, housing incentives such as the Low-Income Housing Tax Credit (LIHTC), opportunity zones, and property conversions.
  • Rep. Tom Suozzi (D-NY) (Member,House Committee on Ways and Means) stressed the need for bipartisanship to address housing shortages, restore state and local tax (SALT) deductions, advance immigration reform, and revitalize cities.
  • Robert Costa (Chief Election & Campaign Correspondent, CBS News) shared his insight on the current political environment and his experiences with the past and current administrations.
  • Rep. French Hill (R-AR) (Chair of the House Financial Services Committee) spoke to RER’s Joint Real Estate Capital Policy Advisory Committee (RECPAC) and Research Committee on his policy priorities for the 119th Congress.

Committee Meetings

Joint Real Estate Capital Policy Advisory Committee (RECPAC) and Research Committee

  • During a joint meeting, Research Co-Chair Spencer Levy (Global Chief Client Officer & Senior Economic Advisor, CBRE) and Darin Mellot (CBRE) discussed the current real estate conditions and the outlook for real estate credit and capital markets. Working Group Chair Michael Lascher (Global Head of Real Estate Debt Capital Markets, Blackstone) led a discussion on office financing with David Bouton (Citibank), Michael Maturo (RXR Realty), and James Million (CBRE). Will Skinner (Blackstone Credit and Insurance) presented on the growing adoption of private credit by insurance companies and the interplay with alternative asset managers. (Agenda & Speakers)

Tax Policy Advisory Committee (TPAC)

  • TPAC Chair Joshua M. Parker (Chairman & Chief Executive Officer, Ancora L&G) and TPAC Vice Chair David Friedline (Partner, Deloitte Tax LLP) led panels on the status of tax legislation in Congress and the pending expiration of the TCJA, property conversions, partnerships, pass-throughs, partnership basis-shifting rules, and SECA-limited partners tax dispute. (Agenda & Speakers)

Sustainability Policy Advisory Committee (SPAC)

  • SPAC Vice Chairs Ben Myers (Vice President, Sustainability, BXP) and Katie Rothenberg (Vice President, ESG, Avalon Bay Communities, Inc.) led discussions on public-private partnership opportunities with US-DOE, utilities, refrigerant emissions, and building performance standards. (Agenda & Speakers)

Homeland Security Task Force (HSTF)

  • Co-Chair Amanda S. Mason (Executive Director, Global Intelligence, Related Companies) highlighted the overall mission of the HSTF, and led a series of discussions on areas of concerns for the commercial facilities sector. Bruce Hoffman (Senior Fellow for Counterterrorism and Homeland Security, Council on Foreign Relations) provided an overview of implications of recent terrorist incidents here and abroad, and the evolving terrorism landscape. Trent Frazier (CISA) and Tobi Rosenzweig, (U.S. Department of State) discussed the current geopolitical tensions in Europe and both short-term and long-term risks. Ken Kurz (COPT Defense Properties)and Marcelle Lee (Equinix) led a panel on the evolving landscape of cyber and physical threats. Cathy Lanier (National Football League), Hon. Lucian Niemeyer (Building Cyber Security), and Thomas Warrick (The Future of DHS Project) hosted a roundtable discussion on recent terrorism incidents, and natural catastrophes.(Agenda & Speakers)

Next on RER’s FY 2025 meeting calendar is the Spring Meeting on April 7-8. The Spring Meeting is restricted to Roundtable-level members only. 

Trump’s First 100 Days: Top Commercial Real Estate Policies to Watch

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)
  • 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 developers and 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 provide billions of dollars in aid 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.

Navigating Rising Costs and Policy Challenges in CRE for 2025

While CRE leaders are optimistic about 2025, clear headwinds emerging from escalating construction costs and trade policies threaten to slow development activity and increase strain on industry stakeholders. These challenges demand coordinated efforts between policymakers and the private sector to stabilize costs, address labor shortages, and promote balanced trade measures.

Market & Financial Headwinds in CRE Construction

  • The commercial construction sector is facing mounting challenges that could reshape its trajectory.
  • Labor Shortages: Baby boomer retirements are thinning the skilled workforce, with an estimated 5.4% of construction workers aged 65 or older and poised to exit the industry.
  • Simultaneously, a larger share of young adults is pursuing college over the trades, creating a gap in new talent pipelines. Overall, the national number of job vacancies in construction has doubled between 2017 and 2023. (ConnectCRE, Jan. 2 | Construction Dive, Jan. 2)
  • Rising Capital and Material Costs: Construction loans are difficult to get and relatively expensive, with interest rates hovering above 8%, while material costs remain elevated due to inflation and lingering tariffs on construction imports like lumber, steel, copper, and cement. (ConnectCRE, Jan. 2)

Tariff Proposals

  • Recent trade and policy developments could exacerbate these challenges.
  • Trump Administration’s Tariff Proposals: President-elect Trump has proposed sweeping tariff increases, including a 60% tariff on Chinese imports and an additional 25% tariff on goods from Mexico and Canada.
  • These measures could raise U.S. tariffs to their highest levels since 1934 and result in an $800 billion annual increase in tariffs across markets, according to PwC estimates​​. (Barron’s Jan. 3, Construction Dive)
  • Steel Supply Chain Disruption: President Biden’s decision to block Nippon Steel’s acquisition of U.S. Steel has raised concerns about the future of one of America’s largest steelmakers.
  • The acquisition would bolster U.S. Steel’s production capacity and supply chain stability with investments such as $2.7 billion in capital for aging U.S. steel plants, a shared $500 million annual research & development budget, and the transfer of cutting-edge blast furnace technology to U.S. Steel.
  • With construction being the primary steel-consuming sector, accounting for over 50% of steel consumption, U.S. Steel’s uncertain trajectory could pose challenges for steel-dependent CRE projects. (The Washington Post, Jan. 3 | The Wall Street Journal, Jan. 3)​​

Office Markets & Return to Work

  • The U.S. office market faces a stark divide: while overall vacancy rates remain high due to aging buildings and remote work policies, demand for top-tier office space with modern amenities is surging in major cities. (Axios, Jan. 10 | WSJ, Jan. 7)
  • Tenants occupied 22% more premium office space in late 2023 compared to pre-pandemic levels, according to CBRE. (WSJ, Jan. 7)
  • Many outdated buildings have the potential for conversion to residential use, while landlords of premium properties have regained leverage, scaling back tenant concessions for the first time in four years. (WSJ, Jan. 7)
  • JPMorgan Chase may soon require all employees to return to the office. This move follows a growing trend among major corporations, including Amazon, AT&T, and Walmart, that are ending remote work and returning to pre-pandemic office norms. (Axios, Jan. 1 | Forbes, Jan. 9)
  • RER Board Member Scott Rechler (Chairman & CEO, RXR) highlighted stronger office markets, despite vacancies, and increased transactions and property conversions for New York City in 2025 this week on CNBC’s Squawk Box. (CNBC Squawk, Jan. 8)

As rising costs and shifting policies reshape the CRE landscape, RER is committed to working with policymakers to stabilize material costs, innovate solutions to labor shortages, and adjust trade policies to avoid disproportionate impacts on the CRE sector.

Trump Tariffs Could Impact Housing Affordability 

On Monday, President-elect Donald Trump pledged to impose a 25 percent tariff on all goods from Mexico and Canada, and an additional 10 percent tariff on imports from China. These measures could have significant repercussions for the U.S. economy, including housing affordability. (WSJ, Nov. 25 | Reuters, Nov. 26)

Response to Illegal Drugs, Immigration

  • Trump’s social media posts stated that the threatened tariffs are necessary to stop illegal immigration and fentanyl trafficking. He couched the levies on imports as temporary, staying in effect “until drugs and migrants stopped coming over the border.” (New York Times, Nov. 26)
  • The U.S. imports the most goods from Mexico, China, and Canada, in that order.  (U.S. Census Bureau, Sept. 2024).
  • Trump said he plans to impose the new tariffs on his first day in office. (AP, Nov. 26). Mexico, the U.S.’s largest export partner after Canada, vowed to retaliate with its own tariffs and spark a possible trade war. (Washington Post, Nov. 26)

Potential Impacts on Housing, Construction

  • “Overly broad and poorly designed tariffs could unintentionally increase housing costs for millions of renters and home buyers,” said Jeffrey D. DeBoer, President and CEO of The Real Estate Roundtable. “Building safe and desirable housing cost-effectively is tied closely to the price of imported materials like steel, cement, concrete, lumber, glass, and more. Tariffs that increase construction costs would slow bringing new supplies to the market and increase prices to purchase and rent homes.”
  • “We need to boost the nation’s housing supply — through new construction, converting obsolete buildings, strengthening the low-income housing tax incentive, reforming local zoning laws, and other bipartisan strategies,” DeBoer continued. “We look forward to working with the Trump Administration on policies to spur economic growth, create jobs, and in this case, improve housing affordability and availability.”
  • The proposed tariffs would be additional to Biden-era tariffs, which themselves derive from import taxes dating back to the first Trump Administration.
  • For example, in May, President Biden increased the tariff on steel products from China to 25 percent— while also increasing tariffs to varying degrees on semiconductors, solar panels, batteries and other specific Chinese imports. (White House fact sheet, May 14). It appears that President-elect Trump will seek an additional 10 percent on top of these.
  • Similarly, in August, President Biden raised tariffs on imports of Canadian softwood lumber to 14.54 percent, according to the National Association of Home Builders (NAHB).  It appears that President-elect Trump plans to raise this import tax further to 25 percent.
  • Lumber tariffs have a detrimental impact on housing affordability, according to NAHB. “In effect, the lumber tariffs act as a tax on American businesses, home buyers, and consumers.”

Potential Impacts on the Broader Economy       

  • Investor Uncertainty: Uncertainty surrounding trade policies risks dampening investor confidence, which could weigh on real estate property values and slow transaction activity. (Bisnow, Nov. 24)
  • Energy costs: A 25 percent tariff on all imports from Canada would drive up energy costs. Canada is the top external supplier of crude oil to the U.S., with oil, gas, and other energy products making up its largest exports. (Bloomberg, Nov. 26)

Trump did not specify how he plans to impose the tariffs, although many have expected him to rely heavily on the International Emergency Economic Powers Act. That law gives the president broad authority to regulate U.S. commerce after declaring a national emergency. (PoliticoPro, Nov. 24)

View from the CEO: Priorities for the CRE Industry in 2025

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.