WASHINGTON House Oversight and Accountability Committee Chairwoman Lisa McClain (R-Mich.) today delivered opening remarks at a hearing entitled Health of Commercial Real Estate Markets and Removing Regulatory Hurdles to Ensure a Strong continued President McClain discussed how the policies of the Biden administrations during and beyond the pandemic have hurt American businesses and put the strength of the commercial real estate market at risk.
Below are the remarks of Subcommittee Chair McClains as prepared for delivery.
I recognize myself for an opening statement.
I would like to thank our witnesses for appearing before the Subcommittee today.
We’re here to examine the strength of commercial real estate markets and talk about what Congress can do to ensure the financial health of this huge part of our economy.
The continued health of the commercial real estate industry is critical to Americans anyway. Whether it’s the construction industry that builds and rehabs properties for people who clean and manage properties for tenants, both commercial and residential, America needs a healthy commercial real estate industry.
I fear the headwinds are building and could cause great distress and we need to hear what policy makers can do to avoid reaching the point of no return. We cannot deal with another housing crisis that forces taxpayers to shoulder the burden.
It is undeniable that the COVID-19 pandemic reshaped the commercial real estate market.
During the pandemic, businesses large and small enacted telecommuting policies and consumers adjusted to online retail.
These trends have not changed significantly as the world has returned to a sense of normalcy.
By 2023, the national office vacancy rate reached 19.2 percent.
Delinquency rates rose to 6.5 percent in the final months of 2023.
That increase comes as more than $2.2 trillion in commercial debt will be sold between now and the end of 2027. And the refinancing of that debt comes as interest rates have risen due to the inflationary crisis of Biden administrations.
Democrat spending has fueled rampant inflation and forced the Federal Reserve to take major steps to control rampant inflation.
Unfortunately, Federal Reserve interest rate hikes aren’t the only concern the federal government is causing commercial real estate markets.
The Department of Housing and Urban Development has continued to reduce the number of loans it has made to support the commercial housing market.
To the Department of Transportation, developers have reported that it takes a year or more after a loan is approved to receive a disbursement on a qualified commercial real estate asset. This delay is unacceptable.
Across the federal government, agencies are allowing staff to work from home despite declining productivity, failures to adequately regulate important sectors of our economy, and calls from Congress.
Even Mayor Bowser has told President Biden that his administrations telecommuting policies are killing local businesses in Washington, DC.
The Biden administration has offered vague information and statistics to support its claim that post-pandemic telecommuting has been successful.
It took four months and the threat of a subpoena to get federal agencies to provide the Committee with basic information about their use of telecommuting.
I am from the private sector. When you don’t show up for work, you lose your job.
For too long, the Biden administration has allowed federal employees to avoid lax telecommuting policies.
The commercial real estate market cannot thrive if its offices are empty.
The American people cannot prosper when federal officials refuse to show up to work and do their jobs by delaying new treatment approvals, stalling new infrastructure projects, and enabling waste, fraud and abuse.
Congress and the federal government must do more to break away from industry leaders and eliminate burdensome regulations and red tape.
Despite these troubling headwinds, there are signs that the health of the commercial real estate market is strong.
Commercial properties in the neighborhood continue to perform well.
Local malls and other brick-and-mortar operators continue to perform well and have experienced positive rental growth.
Industrial real estate has also been a bright spot, with analysts predicting moderate rental growth over the next 10 years.
Multifamily properties continue to remain strong and vacancy rates remain stable.
It is vital that we return federal employees to the office and ensure that our commercial real estate market remains strong.
I look forward to having this very important discussion with all of you.
With this he gives in to the Ranking Porter member for her initial statement.
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