CRE Policymaking in a Pandemic

(Clockwise from top left: Chip Rodgers, Abby Jagoda, Mike Flood, Jack Gay, Cindy Chetti, Stephanie Wiggins)

The Mortgage Bankers Association’s Capital Council hosted a panel Thursday February 25. The Capital Council is a member forum for commercial real estate capital providers and intermediaries, educating participants on market trends and conditions. 

Amidst an active policy landscape, commercial real estate advocates representing broad member constituencies discussed priorities for the new Congress and the Biden Administration. The purpose: to keep members informed of the broader landscape commercial/multifamily industry and to understand industry and association partner perspectives on forthcoming policy debates.

Framing the conversation, the Biden Administration has stated they are focused on four pillars: COVID-19 relief, affordable housing, climate change and diversity, equity and inclusion. 


Jack Gay, Managing Director, Nuveen Real Estate

Abby Jagoda, Vice President, Westfield

Stephanie Wiggins, Head of Production, Agency Lending, PGIM Real Estate

Cindy Chetti, Senior Vice President, National Multifamily Housing Council

Chip Rodgers, Senior Vice President, Real Estate Roundtable 

Mike Flood, Senior Vice President, Mortgage Bankers Association

CRE Addresses New Dynamics, Debates and Dealmakers Inside the Beltway 

The overall dynamic in Washington, D.C. is defined by thin Democratic majorities in Congress. This means that to get things done, it will likely require either 100 percent Democratic support for legislation or bipartisan support.

“In the Senate, there is a 50-50 split, but Democrats control the agenda,” said MBA Senior Vice President Mike Flood. “The Vice President breaks a tie. Democrats must force things through or find bipartisan compromise in a very tightly controlled Senate. However, if things get deadlocked, regulators will be able to implement policies that maybe Congress could not get through.”

MBA’s CREF Objectives:

The immediate advocacy opportunities that may evolve in 2021 include Stimulus, Tax Reform, Climate Change/ESG, Affordable Housing and Infrastructure.

A more long-term opportunity set involves how the industry will ultimately recover with a high level of uncertainty around demand shifts for office, retail and hotel, and whether these are short or long term. 

Checks and Balances: Relief and Stimulus

Some items addressed in current relief package making its way through Congress are particularly important, including rental assistance funds and support for restaurants. Each of these provisions were strongly supported by some or all of the advocacy organizations involved in the panel discussion. 

On February 26th, MBA sent a letter to House and Senate Leadership supporting the proposed $25 billion in additional rental assistance in the current House Financial Services Committee reconciliation bill. The letter acknowledges the positive impact that the $25 billion in rental assistance, direct assistance, and enhanced unemployment insurance provided within COVID-19 relief legislation enacted in December has had, but also highlights that this additional assistance is necessary to continue to help some affected tenants. Further, it highlights MBA’s support for restaurant relief.

The impacts of the public health crisis, economic fallout and accompanying government relief have been felt across the commercial/multifamily industry. Examples include some tenant’s ability or willingness to pay or landlord’s ability to operate their properties the way they might normally during the pandemic. These dynamics make their way into the asset-management process via forbearance arrangements or the loan origination process through inclusion of required operating reserves to account for uncertainty as one example. The impacts have been uneven across properties, property types and businesses. While relief was clearly helpful during the pandemic, the ability and political will of some businesses to leverage various programs such as the payment protection program has presented some challenges to their effectiveness. 

Post-Modern Monetary Theory: Tax Reform 

Given the current financial situation and all the spending occurring recently to address the public health and economic crisis, there is broad agreement that debates over tax reform will likely occur in the coming months and quarters. The scale of any reform and the capacity of Congress to achieve large-scale reforms hinges on thin Democratic majorities in Congress, which is important context and points to the likelihood that enacted reforms may not match campaign trail rhetoric. 

Ambitious proposed legislation that seeks to accomplish a great deal has the potential to get crushed under its own weight, which could lead to more moderate reform proposals being pursued than would have been the case with a “Blue Wave” election with stronger Democratic majorities in Congress. 

Planes, Trains and Automobiles: Transportation and Infrastructure

While infrastructure investment is something that has been discussed in Washington, D.C. in recent years with no action or significant outcomes, that does not mean it isn’t on the table again. Flood quipped to one panelist, “It seems like every year we hear about infrastructure reform.  What is different this year, and how do you see this playing out?”

While infrastructure investment is a challenge–like getting any large, significant legislative change accomplished in D.C. is–the imperative to help the economy recover by creating more jobs could be a spark of sorts to get some movement on an initiative. 

From an industry perspective, people all want to live in communities with well-maintained, effective infrastructure. Having roads and mass transportation be accessible, clean and safe is important. It is a basic need, so it does have an impact on the desirability of a community, and that impacts value directly.

Climate Change and ESG Get the Green Light

Climate change has also been one of the pillars mentioned by the Biden Administration, which has appointed senior officials tasked with climate change at financial regulatory agencies. 

There are a variety of impacts and areas to watch in business and policy spheres, including but not limited to administratively managing risks for severe weather events or experiencing rising costs for insurance premiums. Further, the types of disclosures are required or necessary is another evolving question. 

The ability to address climate change through reduced emissions is in more direct control of landlords than lenders and there was speculation from one panelist that legislation to encourage retrofitting of less energy-efficient buildings is likely going to be considered. 

Commercial real estate market participants that raise capital from pension funds are more focused on ESG principles integration in recent years driven by investor expectations. The GSEs also have green lending products which have grown in recent years offering a lower interest rate to borrowers who make energy efficiency improvements. While no significant programmatic shifts are expected in the near term, these programs will likely grow as will the capacity to measure their effectiveness. One panelist posed the rhetorical question: if a new Director were to be installed by the Biden Administration, would the green lending programs be placed outside the GSE’s multifamily lending caps?

On February 18, in a speech on climate, Federal Reserve Governor Lael Brainard said future financial and economic impacts “would depend on the frequency and severity of climate-related events and on the nature and the speed at which countries around the world transition to a greener economy.” The Federal Reserve is also taking action to address climate change and its effect on the economy and financial markets. Further, FHFA recently issued a Request for Information on climate change and natural disasters, for which MBA is working to provide comments.

The Capital Council meets regularly covering topics of interest for commercial/multifamily lenders and intermediaries. Sign up for the council here

Andrew Foster is Associate Vice President in MBA’s Commercial/Multifamily Group and staff lead for Capital Council. He is a former Analyst with S&P Global Ratings and Fitch Ratings as well as a regular contributor to MBA NewsLink. Foster can be reached at or 202/557-2740