Posted on November 7, 2018

President Donald Trump and Republican lawmakers are promising to pass legislation to deliver further tax relief for the middle class.

“Business will not enter into it, and this will be on top of the tax reduction that the middle class has already gotten, and we’re putting in a resolution probably this week,” Trump told reporters in the Oval Office last week.

Lawmakers are out of session until after Election Day, Nov. 6. Rep. Kevin Brady, chair of the Ways and Means Committee, said, “We will continue to work with the White House and Treasury over the coming weeks to develop an additional 10 percent tax cut focused specifically on middle-class families and workers, to be advanced as Republicans retain the House and Senate.” Brady also hinted Republicans may cut government spending if they retain the House.

Posted on November 5, 2018

Date: November 20, 2018
Day/Time: 2-2:45 p.m. ET
Location: Your Office
Format: Webinar

Register Online

The Advantage Series is an exclusive member benefit, delivering expert insights into the latest research to help you make informed business decisions.

This webinar will provide members with an analysis of the recent midterm elections and the potential impact on NAIOP’s top public policy and legislative priorities.  Aquiles Suarez, NAIOP’s vice president for government affairs, and Alex Ford, NAIOP director of federal affairs, will discuss issues including tax legislation, the future of infrastructure policy, environmental issues and federal regulatory matters.  Attendees can pose questions regarding federal issues affecting their business and gain insights to prepare them for any future regulatory or legislative challenges.

Posted on October 30, 2018

By Joe Padilla

Charlotte has an Affordable Housing crisis -- it's an undeniable fact. Our crisis is not unlike those faced by dozens of American cities, large and small, where a limited supply of land and rooftops pushes rents and home prices out of reach for many. It's a unfortunate byproduct of our own success, driven by the growing appeal of a city that continues to attract more than 40 new residents a day with our high quality of life, temperate weather and strong job market.

What is also undeniable is that the need for affordable housing exists across much of the income spectrum. The U.S. Department of Housing & Urban Development (HUD) pegs the Charlotte MSA's Area Median Income (AMI) right around $74,000. Using the rule of thumb that no one should spend no more than 30% of their gross income on housing, a family of four earning 80% of AMI ($56,550 a year) could pay a maximum of about $1,400 a month in order to avoid being what the government considers 'cost burdened.' On the lower end of the income spectrum, a family of four at 30% AMI ($35,350) shouldn't exceed about $883 in monthly housing costs.

Posted October 25, 2018

Potential investors are getting some clarity about how they may use Opportunity Zones to reduce their capital gains taxes. Last week, the Department of the Treasury released proposed rules for the zones, which were created as part of last year’s tax reform bill. Earlier this year, Treasury had approved opportunity zones – communities that have been identified as economically disadvantaged – in all 50 states, the District of Columbia and five U.S. territories.

“We want all Americans to experience the dynamic opportunities being generated by President Trump’s economic policies. We anticipate that $100 billion in private capital will be dedicated towards creating jobs and economic development in Opportunity Zones,” Treasury Secretary Steven Mnuchin said.

NAIOP supported the inclusion of the Opportunity Zones provisions in last year’s Tax Cuts and Jobs Act. Opportunity Zones allow investors to “defer tax on any prior gains until the earlier of the date on which an investment is sold or exchanged, or December 31, 2026, so long as the gain is reinvested in a Qualified Opportunity Fund,” the IRS explained. “[I]f the investor holds the investment in the Opportunity Fund for at least ten years, the investor would be eligible for an increase in basis equal to the fair market value of the investment on the date that the investment is sold or exchanged.”

Posted on October 16, 2018

REBIC has put together an Election Guide to help you cast your vote for candidates who support the real estate industry.

See which candidates REBIC has endorsed.

View early voting times and locations.

Posted on October 12, 2018

Lawmakers in both parties are beginning to understand the real-world consequences of a drafting error in the 2017 Tax Cuts and Jobs Act and are asking for a fix. Last week, a group of 12 Senate Democrats sent a letter to Treasury Secretary Steven Mnuchin urging action on the tax treatment of Qualified Improvement Property (QIP). A similar letter from 58 House Republicans was also delivered to Speaker Paul Ryan.

QIP is broadly defined as improvements to an interior portion of a commercial building. These include tenant improvements or an office build-out.

Kevin Brady, Chairman of the Ways and Means Committee, has promised to introduce and advance a technical corrections bill in the lame duck session of Congress, following the November midterm elections. But with Republicans’ majority in the House in jeopardy, it remains unclear whether Democrats will be willing to help move the bill before the end of the year.

Posted on September 5, 2018

A total of 283 groups including NAIOP are asking the Trump administration to swiftly address particular drafting errors that were made in the Tax Cuts and Jobs Act before it was signed into law last year. In a letter sent to Treasury Secretary Steven Mnuchin, the groups asked specifically about two provisions: those dealing with qualified improvement property (QIP) and net operating losses (NOL).

QIP is a central concern for NAIOP, as we strongly support a shorter depreciation schedule. “Should the law be left unchanged, a real estate firm investing $5 million to renovate its property would lose out on more than $100,000 each year in deductions, money that could be spent on hiring new staff, or reinvesting in the business,” wrote NAIOP Chairman Jim Neyer in an op-ed for the Cincinnati Enquirer. “Worse yet, companies might decide to hold off on these projects,” Neyer warned.

The group letter makes a similar point. “The delay in correcting these provisions has caused economic hardship for some retailers, restaurants, members of the real estate industry, and suppliers of building products, and is also delaying investments across the economy that impact the communities in which these companies are doing business,” it says.

Posted on August 6, 2018

Just hours before coverage was set to lapse for thousands of homeowners, the Senate approved a bill Tuesday to keep the National Flood Insurance Program operating for four more months.  President Donald Trump is expected to sign the bill—which cleared the House last week—into law before midnight Tuesday, when the program expires.

“We applaud lawmakers for taking this needed action to prevent disruptions to closings in thousands of communities across the country,” Elizabeth Mendenhall, president of the National Association of REALTORS®, said in a statement. “Although the program is now extended through Nov. 30, the NFIP is in desperate need of reforms that will make the program solvent and sustainable for the long-term. The National Association of REALTORS® will continue fighting for these reforms.”

The NFIP provides critical flood insurance to homeowners in more than 22,000 communities nationwide, but Congress has wrestled for years with proposals to reform the program, which remains on shaky financial footing.

Click here to view original post by REBIC.

Posted on July 2, 2018

The U.S. Supreme Court ruled in South Dakota v. Wayfair, Inc. that states may collect sales taxes from online retailers, even if those sellers do not have a physical location in the state. That reverses a decision the Court had made in 1992 in Quill Corp. v. North Dakota.

NAIOP supports the collection of existing sales and use taxes from online retailers when these taxes are already owed to state and local governments, including backing legislative efforts in Congress that would specifically empower states to do so. Not collecting these taxes puts brick-and-mortar retailers at a disadvantage to out-of-state vendors whose purchasers can avoid taxes, as the Court pointed out in its decision.

“Each year the physical presence rule becomes further removed from economic reality and results in significant revenue losses to the States,” Justice Anthony Kennedy wrote in the decision. “These critiques underscore that the physical presence rule, both as first formulated and as applied today, is an incorrect interpretation of the Commerce Clause.”

Posted June 27, 2018

As the North Carolina General Assembly winds down an unusually short Short Session in Raleigh, Realtors®, home builders, property managers and developers are looking at some legislative victories — along with some unfinished business.

First, the wins …

• HB 948 – Building Code Regulatory Reform — Clarifies existing language allowing licensed architects and engineers to certify components or elements of a building, without the need for a city or county inspection; gives builders the ability to request inspections from a state program in the event a local inspection can’t be provided within 48 hours; and, provides greater flexibility to the State Qualifications Board to grant provisional licenses to code enforcement officials. Thanks to Representative Mark Brody for his leadership in sponsoring this bill!
  Status: On Governor’s Desk
• SB 224 — Landlord Recovery Expenses — Allows landlords to recover legal fees and other out-of-pocket expenses in summary ejectment cases. The legislation was introduced in response to a recent Superior Court decision that required a landlord to reimburse a tenant nearly $200 in eviction expenses after he paid his past-due balance.
  Status: On Governor’s Desk
• HB 826 – Clarify System Development Fees — Clarifies and streamlines the water/sewer capacity fee authority approved for local governments in 2017. Thanks to Senator Paul Newton for his work on this important legislation.
  Status: On Governor’s Desk
• SB 99 — Appropriations Act of 2018 — The state budget includes a crucial provision that allows contractors who pay tax on materials covered under the Repair, Maintenance & Installation (RMI) sales tax provision to pay those taxes at the retail level and receive credit from the Department of Revenue.
  Status: Session Law 2018-5

Now the unfinished business …

Posted on June 25, 2018

The North Carolina General Assembly approved last week's legislation that would make substantive reforms to local building permitting and inspection processes both Mecklenburg County and statewide.

HB 948 – ‘Building Code Regulatory Reform‘ was sponsored by Rep. Mark Brody (Union), and makes some very beneficial changes to the permitting and inspection process that would benefit both home builders and commercial developers. They include:

• Clarifies existing language allowing a licensed architect/engineer to certify a component or element of a building, without the need for a city or county to inspect and approve that component.
• Gives the State Department of Insurance the statutory authority to assign Marketplace Pool inspectors to conduct an inspection in the event the local officials cannot provide one within 2 business days of a request.
• Provide greater flexibility for the State Q-Board to grant provisional licenses to Code Enforcement officials who are certified and in good standing in other states, which will help address the growing issue of inspector vacancies across North Carolina.

HB 948 is now awaiting Governor Cooper’s signature. Thanks to the North Carolina Home Builders Association (NCHBA) for their leadership on this critical piece of legislation.

Posted on June 6, 2018

On May 30, 2018, the three chapters of NAIOP North Carolina, visited capitol hill to advocate.  A special thanks to Jason Moore (Charlotte Legislative Committee Chair) and Joe Padilla (REBIC) for helping coordinate visits with legislators to speak about the commercial real estate perspective.  While this is a short session (this means the time of the session is short, but also that new legislation cannot be introduced), it is of critical importance the state senators and representatives know who NAIOP is and what we represent. 

The key areas of discussion are around regulatory reform, economic development and tax reform.  To view the NAIOP NC 2018 Legislative Priorities, click here.  A special thanks goes to the following legislators that took their time to meet with us directly:

• Chris Thomas
• Jason Moore
• George Lyles
• Jim Gamble
• Tim Robertson

Posted on May 25, 2018

Yesterday, President Donald Trump signed the Economic Growth, Regulatory Relief, and Consumer Protection Act into law. This reform legislation includes NAIOP-supported provisions that ensure there is adequate capital availability for commercial construction financing.

The bill requires banking regulators to revise elements of the current High Volatility Commercial Real Estate (HVCRE) designation that unfairly targeted commercial construction lending, including:

• Allowing commercial borrowers to use the appreciated value of contributed land, rather than the original cost as under the prior rule.
• Limiting the application of the HVCRE classification by clarifying that loans made to acquire existing property with rental income would not be subject to higher capital requirements.
• Allowing banks to remove the HVCRE designation prior to the end of the loan.

Revision of the HVCRE designation was an important element of NAIOP's 2018 agenda, and enactment of this important legislation is a major victory for NAIOP's members. We commend the president and the bipartisan coalition of lawmakers who worked to deliver this measure.

Posted on May 4, 2018

The Supreme Court is expected to issue a decision by the end of June in South Dakota v. Wayfair, Inc., et al, a case that could change how sales taxes are collected on Internet purchases.

Two years ago, South Dakota passed a law that would require out-of-state companies to pay sales taxes if they sold more than $100,000 worth of goods or made 200 separate sales transactions in the state. The law was designed as a direct challenge to the Supreme Court’s 1992 ruling in Quill Corp. v. North Dakota, which blocked states from collecting sales taxes from Internet retailers if those retailers don’t have a store, warehouse or sales staff physically present in the state.

NAIOP supports the collection of existing sales and use taxes from online retailers that are already owed to state and local governments. Not doing so puts brick-and-mortar retailers at a disadvantage to out-of-state vendors whose purchasers can avoid taxes.

Posted on April 24, 2018

The REBIC Primary Election Voter Guide is now available. View below or click here to view.

Posted on April 9, 2018

Last week, President Donald Trump hosted a campaign-style event in Ohio to discuss his infrastructure plan. The White House Council of Economic Advisers says that, if implemented, the plan could put more than 400,000 people to work over the next decade. Infrastructure and transportation is a legislative priority for NAIOP in 2018.

Trump says he’d settle for a series of smaller bills instead of a single, sweeping bill. Infrastructure improvements could "be passed in one bill or in a series of measures," the president told reporters last week.

That’s important because many observers doubt Congress will be able to agree on any single major bill before the November election. Still, administration officials promise to keep working on the issue. "We will have a push, a strong push to have infrastructure done this year," a senior administration official told CNN. "We hope to get a big chunk done this year."

Posted on March 27, 2018

Senators took a positive step last week, with an overwhelming vote to begin reforming the 2010 Dodd-Frank banking law. The measure, S. 2155, passed on a 67-31 vote, with support from members on both sides of the political aisle.

A key component of the reform measure is a NAIOP-supported provision aimed at improving the regulatory process involving High Volatility Commercial Real Estate (HVCRE) loans. The HVCRE rule, which has resulted in confusion among lenders and borrowers, was originally put into place by the Basel III committee on international banking supervision and was adopted by U.S. banking regulators. 

“The current HVCRE rule is overly broad and forces banks to hold unreasonably high capital levels before they may make certain loans,” said Thomas Bisacquino, NAIOP president and CEO. “We commend the Senate for passing a measure addressing the problem by providing greater clarity on the HVCRE issue.”

Posted on March 13, 2018

A recent Advantage Series webinar helped members understand the implications of the new 2018 Tax Reform law, thanks to Crystal Christenson of the accounting firm Wipfli, LLC.

Catch a recap on the Market Share blog and listen to the archived webinar.

Posted on February 26, 2018

Last week, the House of Representatives passed H.R. 620, a bill to improve the Americans with Disabilities Act (ADA) by reducing opportunities for people to file nuisance lawsuits under the law. The legislation, which allows property owners to fix any alleged violations while keeping penalties in place for businesses that remain in noncompliance, passed 225-192 and will now move to the Senate.

The measure is aimed at eliminating so-called “drive-by lawsuits,” a tactic used by some “unscrupulous trial lawyers,” as House Judiciary Committee Chairman Bob Goodlatte (R-VA) called them, whose lawsuits, he said, “[divert] money from accessibility where it belongs.” As documented in a 60 Minutes report last year, some lawyers cruise around local communities in an attempt to spot minor ADA infractions at offices, gas stations, malls and other locations. In some cases, these lawyers don’t even bother to leave their homes, and instead use aerial images from Google Maps to target alleged violators.

H.R. 620 requires that anyone making a complaint against a business must file a written complaint. It gives the business owner 60 days to fix any violation, and up to an additional 60 days if the owner is acting in good faith and can demonstrate substantial progress toward making the changes. Owners who refuse to address violations could be sued.

Posted on February 20, 2018

The federal budget deal signed by President Trump contains a number of wins for real estate, including a temporary extension of federal flood insurance and extension of tax provisions that include relief from debt forgiveness, the deductibility of mortgage insurance premiums, and several energy-efficiency related provisions.

Flood Insurance

Extends the National Flood Insurance Program until March 23, giving lawmakers time to work on longer term reauthorization and reform legislation. It also adds $27 billion in mitigation and resiliency funds to address issues arising from last year's hurricanes. The extension makes $12 billion available under the Community Development Block Grant (CDBG) program to fund U.S. Army Corp of Engineers flood mitigation projects.

Click here to read more.