President Biden met with congressional leaders on Tuesday to discuss the legislative agenda for the remaining weeks of the lame duck session before the new Congress begins on Jan. 3 with a House Republican majority.
Omnibus vs CR
- The meeting between President Biden and Senate Majority Leader Charles Schumer (D-NY), Senate Minority Leader Mitch McConnell (R-KY), House Speaker Nancy Pelosi (D-CA) and House Minority Leader Kevin McCarthy (R-CA) also focused on lawmakers efforts to reach a potential deal on a massive “omnibus” spending bill before current government funding expires on Dec. 16. (Politico, Nov. 29)
- There is a possibility that Congress could pass a one-week continuing resolution (CR) to extend current funding until Dec. 23 to buy more time to reach an agreement.
- Sen. McConnell commented on the White House meeting that there is “… widespread agreement that we’d be better off with an omnibus than a CR, but there are some significant hurdles to get over to do that.” (The Hill, Nov. 29)
- Attempts to attach a wide variety of other policy riders to an omnibus package—including tax extenders affecting commercial real estate—could become more difficult as the holiday break draws closer. (Wall Street Journal, Nov. 29 and Roundtable Weekly, Nov. 18)
- House Ways and Means Chairman Richard Neal (D-MA) this week expressed optimism about negotiations on tax measures that may be included in an omnibus, including "extenders” of tax incentives that have expired or are set to lapse after 2022. (CQ, Nov. 30)
- House Speaker Pelosi said yesterday that if Congress fails to reach a year-end spending bill in the coming weeks, then a “last resort” would be a year-long CR. (Politico video and Politico Pro, Dec. 1)
Real Estate-Related Tax Measures
- A bipartisan group of 54 House lawmakers sent a letter this week to House leadership that requested the inclusion of two affordable housing provisions from a bipartisan bill (H.R. 2573) “in any year-end legislative vehicle.” (BGov, Nov. 28 and PoliticoPro, Nov. 29)
- The Nov. 28 letter led by Reps. Suzan DelBene (D-WA) and Brad Wenstrup (D-OH) urged House Speaker Pelosi and Minority Leader McCarthy to expand and strengthen the Low Income Housing Tax Credit (LIHTC).
- The letter recommended extending a temporary increase in credit allocations enacted in 2018—and decreasing the amount of private activity bonds that are needed to access low-income housing credits (in the absence of specific credit allocation from a state housing authority). Studies suggest the latter proposal could increase affordable rental housing production by more than one million units over 10 years. (Novogradac 2020)
- Other important tax proposals vying for consideration include bipartisan, real estate-related bills. The first would modify REIT-related party rules to allow REITs to provide additional equity investment in struggling tenants. The second would modernize outdated tax rules that unfairly accelerate the income of condominium developers that pre-sell condo units during the construction process.
The Roundtable strongly supports these efforts and will discuss affordable housing and tax policy developments during our 2023 State of the Industry and Policy Advisory Committee meetings on Jan. 24-25 in Washington, DC.
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