News and Views from Inside the Beltway

Water, Roads, Taxes, Farms & Houses

by Russell Riggs Director of Environmental and Sustainability Policy

National Association of REALTORS ®

The REALTORS® Land Institute continues to serve as The Voice of Land for its members and the land real estate industry, and this is especially important on a number of fronts in Washington, DC, as 2022 unfolds. NAR’s team of lobbyists, researchers, and legislative/regulatory analysts works hard to track developments and bear influence on issues of critical importance to our industry and communities.

Among the advocacy highlights from the year so far, we have made considerable strides on the proposed new Waters of the United States (WOTUS) rule under the Clean Water Act; monitored implementation of the Infrastructure Investment and Jobs Act (IIJA); and kept a close eye on Omnibus Budget legislation and its ripple effects on land real estate.

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Water

As a recap of the WOTUS issue, the Obama administration’s rule swept in more waters under the Clean Water Act, but the rule was never fully implemented. The Trump administration put forth a replacement rule that provided more certainty and clarity, and it was fully implemented by the Environmental Protection Agency (EPA). Beginning in 2021, President Biden’s team moved to rescind the Trump Rule and has proposed a new rule that sweeps in more waters but does not provide certainty or clarity.

RLI and its members have played a key role in responding to the proposed new rule. For example, our members participated in WOTUS listening sessions and sent in comment letters to the EPA. As an organization, RLI submitted comments and supported a letter of concern from members of Congress. The comment period closed in early spring, but the remaining timing is unclear. We anticipate that the new rule will be put forth sometime this year, after which we expect litigation to ensue related to its particulars and scope.

Roads

Passage of the Infrastructure Investment and Jobs Act (IIJA) renewed and reauthorized the Fixing America’s Surface Transportation Act, or “FAST Act,” which first became law in 2015. Among other aspects, the IIJA designates new funding for rural broadband, surfacetransportation projects, water-management infrastructure, and community resiliency and adaptation. Of note: Tax-deferred 1031 Like-Kind Exchanges were on the table as a funding source for IIJA, but they were not included, in no small part because of RLI’s work championing the value and importance of 1031s for Americans seeking to build wealth and strengthen communities through real estate.

Taxes

Speaking of 1031s, for the time being they are “safe” as a tax benefit that, among other positives, helps to spur economic growth, but we will continue to watch closely should they return to the fore as a topic for future tax-reform proposals. In the near term, we are staying engaged with U.S. House and Senate tax committees, emphasizing the importance of 1031s, and continually updating our research and analysis on the many benefits of 1031s.

Other land-related issues we continue to monitor include the Farm Bill and the ongoing challenge of housing supply and inventory.

Farms

The current Farm Bill is set to expire at the end of 2023. Early discussions to develop a framework for a new bill have begun. Issues in play are likely to include rural broadband, reforming and enhancing disaster-aid payments program, reviewing and reforming conservation programs, and enhancing programs to expand farm-based energy projects (i.e. the Rural Energy for America Program). We will actively follow these developments and ensure that the concerns of the nation’s farmers remains a high priority in the conversation.

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Housing Supply and Affordability

It’s no surprise to anyone in our industry (and many outside of it) that new housing construction has not kept pace with rapidly rising demand. NAR estimates that more than 6 million new units will be needed to ease the shortfall. For a variety of reasons—from zoning and land access to lumber costs and regulatory burdens—new housing is likely to lag behind demand for the foreseeable future.

Potential solutions, or at least mitigating factors, could include modernizing zoning laws that impede new construction; reducing permitting and regulatory burdens; lowering the cost of building materials, especially lumber; maximizing opportunities for Public/Private Partnerships (PPPs), such as Opportunity Zones; and incentivizing developers through density bonuses and other credits.

Russell Riggs is RLI’s Advocacy Liaison for the National Association of REALTORS ® and Director of Environmental and Sustainability Policy for NAR. He holds a bachelor’s in political science from Virginia Commonwealth University, a master’s in public policy from Tufts University, and a master’s in public administration from New York University.

As each of these issues demonstrates, the widespread potential impacts of decisions made in Washington make it as vital as ever for RLI to have a seat at the table at all phases, from discussion and debate to enactment and implementation. Our members may rest assured that RLI will fight on their behalf to keep that seat and represent their voice whenever necessary in the days, weeks, months and years ahead.