Shaping Our Industry

Our members shape the commercial real estate finance industry with our advocacy initiatives. Through a collaborative process with our members, CREFC develops official policy positions that are presented as needed to legislators and regulators. These policies are developed through participation in our forums. CREFC also maintains fact sheets in online and PDF format on all major CRE issues and informs members weekly of the latest regulatory developments. To make a difference in the direction of our industry, sign up for a forum and participate in our advocacy efforts below. Contact Justin Ailes with any CREFC policy or advocacy questions.

Latest News

News

Reconciliation on Track in Congress but Size Could Shrink

September 13, 2021

The House held a number of committee sessions last week to move the multi-trillion dollar reconciliation package that is President Joe Biden’s agenda to expand the social and economic safety net.

House Democrats will hold committee votes this week on how to pay for the massive spending package. On Sunday, a list of tax increases to pay for the spending was released by the House Ways and Means Committee. The proposed increases are not as large as Biden proposed and are subject to change. A full list can be found on this  document which includes:

  • Top capital gains rate increases to 25% from 20%
  • Top corporate tax rate rises to 26.5% from 21%
  • Increase carried-interest holding period to five years from three
  • A 3% surtax on individuals who earn more than $5 million
  • Cuts some estate-tax discounts, with no effect on family farms and businesses
  • Cuts tax rate for businesses with income of less than $400,000 to 18%
  • Cryptocurrency subject to additional reporting

The increased revenue from high-income individuals is expected to be around $1 trillion while corporate tax increases are expected to net $900 billion. Senate Democrats suggested a 2% tax on stock buy-backs and Senate Finance Committee Chair Ron Wyden (D-OR) floated a list separate from the House Ways and Means Committee of possible tax increases. Wyden also proposed to raise $270 billion by tightening tax reporting requirements around business partnerships, which he says allow “the wealthiest individuals and most profitable corporations to decide when, and whether, to pay taxes at all.” More specifics on which taxes would increase under the reconciliation bill will be available this week.

Capital gains increases and ending the step-up-in-basis are being actively debated among Democratic tax writers. One in three Democrats on the Ways and Means committee are said to want a capital gains rate potentially around 28%, according Bloomberg sources who requested anonymity. Biden’s plan to raise the capital gains rate on those earning above $1 million to 39.6% from 20% would raise about $322.5 billion over a decade. Some Democrats on the panel also balked at Biden’s plan to end “step-up-in-basis,” which allows appreciated assets to be passed to heirs tax-free, over concerns it would hurt family farms and small businesses. A Senate spokesperson insisted, “Step-up is not off the table. And nothing is settled on rates.”

Specific spending provisions approved by the House Ways and Means Committee last week include:

  • Expanding retirement savings by requiring employers to automatically enroll employees in a retirement plan (unless they opt-out), and deduct 6% of wages from paychecks, rises to 10% over time and set target-date funds as the default investment. The committee approved by a 22-20 vote.

  • Paid family leave for U.S. workers, which was approved by a 24-19 committee vote. Of note, centrist Rep. Stephanie Murphy (D-FL) broke party lines after voicing frustrations with the “rushed” process. The debate also raised questions about whether Social Security Administration or the Treasury Department could successfully operate a paid family and medical leave program.

  • Extend through 2025 the recently-expanded child tax credit for children under six of $3,600, and $3,000 for older children. Some lawmakers pushed to make the expansion permanent, but doing so would be expensive and could crowd out other lawmaker priorities vying for a place in the budget reconciliation package.

  • Extend energy credits for renewable energy.

  • Allow the government to negotiate drug prices
    .
  • $25 billion in additional pandemic relief through the Small Business Administration, approved by a separate committee.

Size of Reconciliation

Also still unresolved is the total size of the program. While $3.5 Trillion has been the assumption, Senator Joe Manchin (D-WV) published an op-ed calling for Democrats to slow down and reduce the size of the package to something closer to $1.5 or $2 Trillion. Manchin reiterated this lower number in a CNN interview. The 50-50 Senate gives leverage to any Senator who is willing to insert themselves into the process. But Democratic leaders expect Manchin to eventually back down, according to The Hill.

SALT Deduction

Also unresolved is the extent to which Democrats will address SALT or the State and Local Tax deduction limit. A full SALT-limit repeal is estimated to cost $380 billion. More than 30 lawmakers say SALT is critical to their vote for the overall reconciliation and are pushing for a full repeal of the SALT deduction limits, which they say unfairly target high-tax states like New York and New Jersey and encourages people to move to low-tax states like Florida. However, progressives view that provision as a giveaway to the wealthy.

Housing

Also this week, the House Financial Services Committee will consider legislation by Maxine Waters (D-CA) to spend an additional $300 billion on housing and to expedite the distribution of federal rental assistance that would impose new eviction restrictions on landlords. A hearing on this legislation was held Friday and is discussed in further detail below.

Process to Date

Following the last Policy and Capital Markets Briefing on July 26, on August 9, the Senate passed a $1 trillion bipartisan infrastructure bill by a vote of 69-30 and passed the Democrats’ $3.5 trillion budget resolution by a vote of 50-49 (shortly before 4:00a.m.) on August 11.

Following these monumental votes, attention turned towards the House of Representatives which has a (non-binding) deadline of September 15 to draft the text of the reconciliation bill to expand the economic and social safety net. After a dozen committees vote on their parts of the bill, the package is sent to the House Budget Committee, which assembles the reconciliation bill. The House Rules Committee then votes on the bill before it goes to the House floor for a vote by the end of September. This ambitious timetable may slip as there is not perfect unanimity among progressive and centrist Democrats over the size and scope of the bill.

Contact

 
Managing Director, Government Relations



 
Senior Director, Policy & Government Relations


The information provided herein is general in nature and for educational purposes only. CRE Finance Council makes no representations as to the accuracy, completeness, timeliness, validity, usefulness, or suitability of the information provided. The information should not be relied upon or interpreted as legal, financial, tax, accounting, investment, commercial or other advice, and CRE Finance Council disclaims all liability for any such reliance. © 2021 CRE Finance Council. All rights reserved.
Reconciliation on Track with Congress but Size Could Shrink
September 16, 2021
The bipartisan infrastructure bill continues to be negotiated by a group of 22 senators with an end possibly in sight.

News

Alert: Supreme Court Ends National Eviction Moratorium

August 26, 2021

On August 26, 2021, the U.S. Supreme Court issued an opinion that effectively ends the CDC’s nationwide eviction moratorium. The ruling comes not quite a month after the CDC reissued its nationwide eviction moratorium on August 3 following the expiration of the previous moratorium on July 31.
  
Previously, the Supreme Court narrowly allowed the ban to stand through the July 31 expiration date, but Justice Brett Kavanaugh warned that Congressional authorization would be required to extend the moratorium further. The Court made good on its warning with a 6-3 opinion that kicks the issue back to Congress. Note that the CDC ruling does not impact state and local eviction moratoriums.
  
The Court’s order has already drawn calls from Members of Congress to extend a national moratorium via legislation. However, the legislative path is unlikely to advance in a 50-50 Senate where the measure would require 60 votes to overcome a filibuster. Republicans and Democrats continue to call for expediting emergency rental assistance, and bipartisan legislation could move to streamline the process. A recent Treasury report indicates distribution continues to lag, with only $5.2 billion of the $46.5 billion in rental assistance distributed to landlords and tenants.
  
After the August 3 extension, CREFC joined 10 real estate trade organizations in opposing the moratorium and instead urged more focus on distributing rental assistance. 

The best way to help struggling renters is for the Administration to work with Congress, states and localities to help disburse rental assistance funds to residents and housing providers in need. Our organizations are committed to working with the Administration and Congress to ensure that the emergency rental assistance program is a success, to help our residents regain housing stability and to preserve the viability of the rental housing sector.
Click here for the joint statement.
  
Additional analysis of the Court’s opinion and the rental assistance distribution is below. Contact David McCarthy with questions.
  

Procedural Background: There and Back Again

The case of Alabama Association of Realtors v. Dept. of Health and Human Services highlights the unusual nature of the Court’s action. As we covered previously, a federal District Court ruled early this year that the CDC eviction moratorium exceeded the department’s statutory authority. But the District Court issued a “stay” or a pause on its opinion pending appeals. The stay essentially allowed the moratorium to remain in place during the appeal process. The plaintiffs originally appealed the stay to the DC Circuit Court of Appeals, which upheld the stay, and then the case went to the Supreme Court, which originally upheld it in late July.
  
However, Justice Kavanaugh, who joined the July 5-4 majority, filed a concurring opinion upholding the moratorium but agreeing the CDC exceeded its authority and that “clear and specific congressional authorization (via new legislation) would be necessary for the CDC to extend the moratorium past July 31.” Since four other justices voted to vacate the stay (end the moratorium) in July it was widely expected the moratorium would not survive another trip to the Supreme Court. That bet was accurate.
  
After the CDC reissued the moratorium, the plaintiffs revived their motions to remove the stay. While the District Court agreed with the plaintiffs, it was bound by the original Court of Appeals ruling keeping the stay in place. The case found its way again to SCOTUS where Justice Kavanaugh and Chief Justice Roberts joined the other Republican-appointed justices in vacating the stay and allowing the moratorium to expire.
  
The case is unusual largely because of the several page opinion that accompanied the order. While emergency appeals with respect to stays are a normal part of Supreme Court practice, the justices often rule on these motions without much explanation. By issuing an opinion, the Court sets a strong precedent for lower courts that might have considered the issue, or if the federal government were to try to revive a moratorium without Congressional authorization.
  
In this case, the majority justified the extra attention due to the thorough nature of consideration the case has received and the fact that the plaintiffs are very likely to succeed in overturning the moratorium:
And careful review of that record makes clear the [Realtors] are virtually certain to succeed on the merits of their argument that the CDC has exceeded its authority. […] The [Realtors] not only have a substantial likelihood of success on the merits—it is difficult to imagine them losing.

Supreme Court: CDC’s Unprecedented Claim of Authority

  
The majority did not mince words in ruling the CDC’s actions overstepped its statutory authority:
This claim of expansive authority under §361(a) is unprecedented. Since that provision’s enactment in 1944, no regulation premised on it has even begun to approach the size or scope of the eviction moratorium.
The Court also recognized that the moratorium continues to put landlords at risk of irreparable harm by depriving them of rent payments with no guarantee of recovery. Furthermore, the Court said the CDC determined that landlords should bear the financial costs of the pandemic, which also deprives them of their fundamental property rights. To drive home the nature of the CDC’s action, the Court observed the government had not identified a limiting principle to the claimed authority other than it is “necessary”. 
Could the CDC, for example, mandate free grocery delivery to the homes of the sick or vulnerable? Require manufacturers to provide free computers to enable people to work from home? Order telecommunications companies to provide free high-speed Internet service to facilitate remote work?
In the end, the Court said that specific Congressional authorization would be needed to implement another eviction moratorium. This language could serve to prevent the Biden Administration from identifying another broad law or regulation through which to enact an eviction ban. The nature of the order as an opinion will also give teeth to the Court’s position as precedence for lower courts to follow.
  
On the other side of the bench, the Court’s three Justices appointed by Democrats issued a dissenting opinion written by Justice Stephen Breyer that said the case should have a full hearing before the Court and allow the moratorium to remain in effect. The dissent noted the resurgent Delta variant cases and how the CDC had sought to tailor the moratorium to areas with surging COVID transmission rates as arguments for maintaining the stay.

Rental Assistance: Some Areas Still Lag

On August 25, the Treasury Department released its monthly update on emergency rental assistance distribution. While July saw an additional $1.7 billion distributed to 340,000 households (15% increase compared to June) the reported noted that many states and localities continue to lag behind: 
However, too many grantees have yet to demonstrate sufficient progress in getting assistance to struggling tenants and landlords. After September, programs that are unwilling or unable to deliver assistance quickly will be at risk of having their rental assistance funding reallocated to effective programs in other high-need areas.
The September deadline only applies to the first bucket of rental assistance passed in December, which totals around $25 billion. The American Rescue Plan authorized an additional $21 billion with a longer time horizon. Concurrent with the report, Treasury issued yet another set of guidelines hoping to speed the distribution. Next week, CREFC will provide further analysis on the guidelines and the rental assistance distribution to-date.

Contact

DAVID MCCARTHY
Senior Director, Government Relations
dmccarthy@crefc.org
The information provided herein is general in nature and for educational purposes only. CRE Finance Council makes no representations as to the accuracy, completeness, timeliness, validity, usefulness, or suitability of the information provided. The information should not be relied upon or interpreted as legal, financial, tax, accounting, investment, commercial or other advice, and CRE Finance Council disclaims all liability for any such reliance. © 2021 CRE Finance Council. All rights reserved.
Alert: Supreme Court Ends National Eviction Moratorium
August 26, 2021
Supreme Court Ends National Eviction Moratorium

News

Bipartisan Senate Infrastructure Bill in Sight

July 26, 2021

The bipartisan infrastructure bill continues to be negotiated by a group of 22 senators. Legislative text is (finally) expected this week once the Congressional Budget Office (CBO) “scores” the bill to calculate its cost and revenue. Negotiations continued over the weekend, although some senators left Washington. Politico reported that President Biden credited Senator Rob Portman, (R-OH) at a CNN town hall in Cincinnati, saying that the senator was a “…decent, honorable, man” and that he takes Republicans at their word and believes a deal with them would come together. The proposed deal nears $1.2 Trillion with $579 Billion in new spending.
After an earlier plan to pay for the spending through increased IRS enforcement fell apart, Senators found a new way to fund the missing revenue: delay a costly Trump-era Medicare regulation that reduces out-of-pocket costs for patients outside Medicare. Delaying the rule reduces expenditures by the Medicare program and produces a budgetary windfall the negotiators can use to help pay for roads, bridges, and other projects, according to Bloomberg.

Outstanding Issues

Democrats in the House and Senate are still pressing for further changes to the bipartisan bill. The biggest disagreement is over the ratio of transit funding in relation to highway funding down to 18% from 20%. Senators Sherrod Brown (D-OH) and Tom Carper (D-DE) say, “Robust funding for transit must be included in the legislation. We will not support any package that neglects this fundamental part of our nation’s infrastructure.” Other disputes, according to Punchbowl News involve broadband money, water funding, Davis-Bacon (labor union) requirements, and rescinding unspent COVID relief funds.
Republicans last week blocked a procedural vote on the bipartisan bill that had been forced by Senate Majority Leader Chuck Schumer (D-NY) to kick negotiations into higher gear. The gambit seems to have worked as the first vote failed, and enough Republicans are expected to support a similar vote this week to move forward after negotiations continued.

Plan B

Senate Majority Leader Chuck Schumer (D-NY) continues to talk openly about keeping the Senate in session into August to pass the bipartisan infrastructure bill and a budget that will allow Democrats to craft their reconciliation bill saying:
My colleagues on both sides should be assured: as majority leader, I have every intention of passing both major infrastructure packages – the bipartisan infrastructure framework and a budget resolution with reconciliation instructions – before we leave for the August recess.
If the bipartisan bill again fails a procedural vote, the Senate is likely to switch gears and focus on individual infrastructure bills for water, highways, rail, and energy.

Biden Legacy

Politico reported Sen. Chris Murphy (D-CT) said President Biden, “wants to bend over backwards to get a bipartisan agreement,” and that the White House’s posture has been to project “calm to the point of it becoming a mantra inside the White House: Settle down. Take a breath. We’re not giving up on it. If a deal on the massive bill materializes next week, as several senators involved in talks are suggesting, it would represent the most significant validation to date of Biden’s commitment to bipartisanship.” Please contact Justin Ailes at jailes@crefc.org with any questions on infrastructure legislation.

Contact

JUSTIN AILES
Managing Director, Government Relations
202.448.0853
jailes@crefc.org
The biggest disagreement is over the ratio of transit funding in relation to highway funding down to 18% from 20%.
The information provided herein is general in nature and for educational purposes only. CRE Finance Council makes no representations as to the accuracy, completeness, timeliness, validity, usefulness, or suitability of the information provided. The information should not be relied upon or interpreted as legal, financial, tax, accounting, investment, commercial or other advice, and CRE Finance Council disclaims all liability for any such reliance. © 2021 CRE Finance Council. All rights reserved.
Bipartisan Senate Infrastructure Bill in Sight
July 26, 2021
The bipartisan infrastructure bill continues to be negotiated by a group of 22 senators with an end possibly in sight.

More Advocacy Resources

CREFC State Legislation and Policy Tracker

CREFC is tracking state policy developments affecting commercial and multifamily real estate in response to the pandemic, including eviction and foreclosure moratoriums, proposed and passed legislation, and executive orders.

CREFC State Legislation and Policy Tracker (Updated 4.27.2021)

Biden Transition Guidebook

CREFC will provide weekly updates on the Presidential transition and the new 117th Congress.

Biden Transition Guidebook (updated 2.10.2021)

Policy Fact Sheets

CREFC’s Fact Sheets are intended to provide a high-level overview of legislative and regulatory policy issues affecting commercial real estate lenders and investors.  Read the facts.

Read the Latest Government Relations Alerts

For our weekly government relations and industry policy briefings, please visit our Document Resource Center. The Document Resource Center contains CREFC position papers, analyses, testimony, and other policy tools.

Sign Up for eNews

Become a Member

CREFC offers industry participants an unparalleled ability to connect, participate, advocate and learn!
Join Now