This week’s Real Estate Roundtable discusses hot topics surrounding the election:
- PRE-ELECTION POLICY PREVIEW – Congress Scrambles to Finish Must-Pass Bills Before Election Day, including EB-5 Visa Legislation; Fate of Expiring Tax Cuts Left for Year-End “Lame-Duck” Session
- ELECTIONS 2012 – Real Estate’s Role in the Economy Highlighted in Policy Forums at GOP, Democratic Political Conventions
PRE-ELECTION POLICY PREVIEW
Congress Scrambles to Finish Must-Pass Bills Before Election Day, including EB-5 Visa Legislation; Fate of Expiring Tax Cuts Left for Year-End “Lame-Duck” Session
With the conclusion this week of the national political conventions, Congress reconvenes on Monday, Sept. 10 for its final pre-election fall session, a period of no more than 13 legislative days jammed with issues awaiting final action. Under such a tight time constraint, it is expected policymakers will focus on essential legislation and soon-to-expire programs such as stopgap funding to keep the federal government operating beyond Oct. 1 (the start of the new federal fiscal year) – and “Immigrant Investor” EB-5 visa legislation, a top economic growth policy priority for The Roundtable.
The need for policy action to spur employment was reinforced by today’s anemic Labor Department report.
The need for policy action to spur employment was reinforced by today’s anemic Labor Department report, which shows only 96,000 jobs were added to the U.S. economy in August – and that the unemployment rate fell from 8.3% to 8.1% because of the lowest level of labor force participation in more than 30 years. (CNBC, Sept. 7)
Today’s weak employment report also increases the likelihood that the Federal Reserve may launch another round of bond-buying known as quantitative easing at its policy meeting next week. Fed Chairman Ben Bernanke last week referred to the lingering high unemployment rate as a grave problem and suggested new actions were needed to bolster economic growth. (CNN, Sept. 7)
“The latest jobs numbers show that decisive polices need to be enacted to kickstart our stalling economy,” said Roundtable President and CEO Jeffrey DeBoer. “One important economic growth policy that can be enacted by Congress this month is the EB-5 Immigrant Investor Regional Center program, which allows foreign investors to get visas if they invest in US businesses, including commercial real estate development projects that create jobs.”
In June, The Roundtable joined a coalition of national real estate organizations in urging the House and Senate Judiciary committees to continue the EB-5 visa program.
The EB-5 program grants lawful permanent residence in the U.S. to foreign nationals who make investments of $1 million (or $500,000 in high unemployment areas) in domestic real estate and other business projects. These investments must demonstrate the creation of jobs in the U.S. before visas are approved. An extension of EB-5 would allow 225 regional centers across the country that manage this program to coordinate with the real estate community, allowing incoming investment funds to be used for financing large energy efficient building retrofits.
On June 28, 2012, DeBoer testified before the US Senate Committee on Energy and Natural Resources about the need for the extension of the EB-5 program, which is due to expire at the end of this month. Before Congress recessed in August, the Senate approved a 3-year extension of EB-5. (Roundtable Weekly, August 3 / WorldPropertyChannel, August 8)
In the House, legislation extending EB-5 will be ready for a vote in the upcoming 13-day legislative session before Congress breaks for national elections.
After the elections, a lame-duck session is expected to focus on avoiding the year-end “fiscal cliff” and addressing the fate of expiring tax cuts, including “tax extenders” that contain Roundtable-supported language on leasehold improvement depreciation.
The lame-duck session will also consider the looming expiration of the Bush tax cuts. Before August, the House passed a bill extending the 2001-03 Bush tax cuts for all taxpayers, while the Senate passed a bill extending for only those earning up to $250K per year. (Roundtable Weekly, Aug. 3)
At the moment, neither proposal has the support of leaders in the other chamber.
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Real Estate’s Role in the Economy Highlighted in Policy Forums at GOP, Democratic Political Conventions
Nineteen real estate industry organizations hosted a pair of policy forums during the political conventions.
Amid the whirl of national political conventions in Tampa and Charlotte the past two weeks, 19 national real estate industry organizations hosted a pair of wide-ranging discussions with key lawmakers about the link between healthy real estate markets and a healthy U.S. economy. Real Estate Roundtable President and CEO Jeffrey DeBoer moderated these policy forums about major legislative, political and economic issues that were entitled A Strong Real Estate Market is Vital for a Robust Economic Recovery.
DeBoer emphasized in his introductory comments the broad depth and vast reach of the real estate industry’s economic influence and noted its essential role in energy efficiency as a generator of jobs. “Real estate is where Americans live, work, shop and play. The industry generates nearly one third of the nation’s GDP, creates jobs for more than 9 million Americans and is contributes nearly 70% of the state and local revenues needed to make our local communities successful. By most estimates, there cannot be a robust economy recovery until the broad based real estate marketplace has recovered,” said DeBoer.
He added, “Lifting the cloud of regulatory uncertainty and creating a positive climate for job growth and investment are essential. Most important now are policies that will facilitate capital formation, equity investment in real estate, restore credit capacity for the industry and, perhaps most important – create jobs.” (starts at 21:15 in the webcast).
The Republican policy forum in Tampa featured an interactive policy discussion with two prominent lawmakers active in major issues of importance to the real estate industry: Senator Johnny Isakson (R-GA) and Rep. Mike Turner (R-OH) – co-chairs of the Senate and House Congressional Real Estate Caucuses.
Left to right: Senate Real Estate Caucus Co-Chair Johnny Isakson (R-GA); Roundtable President and CEO Jeffrey DeBoer; House Real Estate Caucus Co-Chair Rep. Mike Turner (R-OH)
Also on the program were senior real estate industry leaders offering unique perspectives on select market segments or policy areas, including representatives of the American Institute of Architects (AIA), Commercial Real Estate Finance Council (CREFC), American Resort Development Association (ARDA), National Apartment Association (NAA), and National Association of Realtors (NAR).
Among the many industry sectors represented at the policy forum, NAR’s 2012 President-Elect Gary Thomas (Broker/Owner of Evergreen Realty in Villa Park, California) questioned the panel on the role of tax reform and housing (starts at 40:00 in the video).
NAA’s Chairman of the Board Jerry Wilkinson (The Wilkinson Group, Inc. – Atlanta, GA) asked the panel to address the future of real estate partnerships’ taxation and carried interest (starts 46:30 on the webcast).
CREFC’s CEO Steve Renna discussed with the policymakers how regulators of real estate can be reached more effectively about the state of the commercial real estate finance, and how the health of markets are directly affected by a variety of new regulations and the agencies that implement them. (starts at 58:00 on the webcast).
Left to right: Jeffrey DeBoer; Sen. Mark Begich (D-AK); House Ways and Means Committee member Joe Crowley (D-NY); Senate Real Estate Caucus Co-Chair Ben Cardin (D-MD)
The follow-up event at the Democratic policy forum in Charlotte featured Senate Real Estate Caucus Co-Chair Ben Cardin (D-MD), Sen. Mark Begich (D-AK), and House Ways and Means Committee member Joe Crowley (D-NY), a strong backer of Roundtable-supported legislation to encourage more foreign equity investment in U.S. commercial real estate. Industry groups participating in this forum included the Mortgage Bankers Association, NAA, NAR, American Land Title Association, and the retail real estate industry (represented by Roundtable member Peter Lowy [The Westfield Group]).
Questions from industry leaders to the Democratic policy forum panel start at :37:10. Steve Brown, NAR’s 2012 First Vice President (co-owner of Irongate, Inc.) beings the industry comments by focusing the issue of the home mortgage interest deduction. Peter Lowy’s comments took the form of a challenge to the panel to focus on tax reform (starts at 01:09:55 on the Democratic policy forum webcast). His comments are followed by Jeffrey DeBoer’s concluding remarks.
The policy discussions, which were webcast nationally, are now archived online at:http://realestateforumlive.com
Source: The Real Estate Roundtable