This week, as they do early each year, NAIOP members from all over the United States and Canada, as well as from AMPIP, our sister organization in Mexico, are attending NAIOP’s Chapter Leadership and Legislative Retreat (CL&LR) in Washington, D.C. At CL&LR, NAIOP leaders learn how to strengthen their local chapter programs, including their government affairs capabilities, and exchange ideas with other chapter leaders on best practices and approaches. The conference culminates today, Wednesday, February 8, as 200+ members from our U.S. chapter network head to Capitol Hill for meetings with their elected representatives and senators, and their staffs, advocating NAIOP’s most important public policy issues of 2017.
This first CL&LR held since the political earthquake that was the 2016 presidential election was sure to be an interesting one, and it did not disappoint. With the predominance of international issues in the public eye, our members enjoyed listening to our keynote speaker, retired U.S. Air Force General Michael Hayden who served as former director of both the National Security Agency and of the Central Intelligence Agency. General Hayden provided a fascinating analysis of the major challenges facing the U.S in the coming years and their likely impact on both the U.S. economy and the nation’s standing in the world. The Trump administration’s approach to trade policy, and in particular the future of the North American Free Trade Agreement (NAFTA), was also a topic of conversation between our U.S.-based members and their fellow members from Canada and Mexico.
To prepare for their Capitol Hill visits, NAIOP members attended sessions that focused on the association’s priority issues: the potential impact of future tax policies envisioned by the Republican Congress and the Trump administration; energy benchmarking policies aimed at commercial development and their potential impact at the state and local levels; and proposed infrastructure programs.
Three major issue areas form the basis of our messaging to Congress this year, and members were armed with one-page issue briefs on each of them to give to their elected officials:
- Tax reform – Our most important concern by far, tax reform touches on a number of issues important to the industry, including the continuation of tax deferral for like-kind real estate exchanges (Section 1031 of the current tax code), taxing carried interest compensation as capital gains rather than at ordinary income rates, and other changes to the tax code that have been raised in the context of a comprehensive rewrite of the code.
- Infrastructure – NAIOP members argued for expansion of public-private partnerships (P3s) to increase infrastructure investment, while at the same time asserting the continued need for direct federal spending for maintenance and repair of existing roads, highways and bridges. Both the Trump administration and majorities in both political parties want to push new infrastructure programs, although revenue sources remain a problem.
- Capital and credit – Lending by banks to the commercial real estate industry, and new issuances of commercial mortgage-backed securities, have become constrained as a result of the Dodd-Frank financial services reform bill and the actions of the Basel Committee on Bank Supervision. With Republicans controlling the White House and both the Senate and House, a real chance to accomplish meaningful reform in this area exists.
Following the results of the 2016 election that leave Republicans in control of the White House, Senate and House, there is real optimism among the party’s leaders that they can enact a far-reaching, bold agenda. And NAIOP’s three areas of policy focus this year are also important priorities for President Trump and the Republican leadership. Therefore, 2017 will be a year when NAIOP issues get top billing.
However, nobody can deny that the political atmosphere in Washington has worsened, hard as that is to believe. Because of some of President Trump’s actions upon taking office, including the “travel ban” and the several public demonstrations, Democratic opposition to working with the Trump White House has hardened and Democratic leaders are very wary to go against the trend of the most vocal members of their party at the moment.
In addition, with Republicans moving quickly to repeal the Affordable Health Act, the pressure on the Republican majority to come up with a replacement for “Obamacare” means that this issue moves to one of the first items of business. Since the tax-writing committees – House Ways & Means and Senate Finance – have jurisdiction over health insurance programs, the hearings and committee meetings needed to advance any tax reform legislation will be delayed.
NAIOP’s CL&LR and our members’ visits with their elected officials to advocate on our policies is only the first salvo in what promises to be a challenging year on the advocacy front, but a very critical one in setting the stage for our success.