Politics Threaten CRE’s Agenda on the Hill

While the recent bipartisan infrastructure deal gave observers some hope for lawmakers to work across the aisle in 2021, the progress could soon be thwarted as more contentious legislation comes to the forefront.

“The legislative pipeline, bipartisan efforts or the lack thereof, is likely going to be the main focus of the next six months,” said NAHB Chairman Chuck Fowke in a recent video.

Fowke thinks disagreements about the Voting Rights Act could stall other legislation.

“The voting rights bill is unlikely to pass due to lack of support from more moderate Democrats who want to see it modified to bring more Republicans on board,” Fowke said. “This could also have implications for other legislation like the infrastructure package, which contains positive provisions for home builders. While the proposed infrastructure package might not pass as is, we are likely to see infrastructure provisions in some way in the next legislative session.”

Other CRE-related measures will also be affected by similar dynamics.

Flood insurance, for instance, is set to expire in September. “We expect to see the current law extended as opposed to a robust overhaul,” Fowke said. 

The good news is that both parties are prioritizing housing, according to Fowke.

“Housing has enduring bipartisan support as an industry, which could help insulate us from the brunt of Congressional infighting to keep us moving forward, providing housing opportunity for as many American families as we can,” he says.

One major issue for NAHB in its discussions with lawmakers is sure to be lumber prices, despite their recent drop. These costs are causing other problems, including with appraisals. Fowke says high appraisals are forcing banks to ask home buyers to get a second lien on their mortgage to cover lumber costs.

“If lumber prices continue on the path they are currently taking, it’s likely that American consumers will hit the pause button on buying new homes and starting renovations,” Fowke said. “Due to low-interest rates and unprecedented demand due to the pandemic, homebuilding saw a boom in 2020. However, it’s likely that we’re going to see some slowdown, especially as lumber prices and other supply-side headwinds continue to increase the cost of building a home.”