| An Industry On Point in 2015 |
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| Copyright: M. Dogan |
Congress has called it a wrap for the holidays and
2015. But before heading out for their long winter break, lawmakers and the
nation breathed a sigh of relief after the omnibus $1.8 trillion Fiscal Year
2016 Federal Government spending bill was approved.
Fortunately, the chances of another government shutdown were averted with the
carefully cobbled together, and much deliberated over, legislation. President
Obama promptly signed the bill before heading off for some R & R in Hawaii
with his family.
The omnibus budget package holds numerous large victories for the multifamily
industry. For example, the tax portion of the legislation, known as tax
extenders, would provide permanent or long-term extensions of provisions to
promote investment in multifamily properties, the production of low-income
housing, and reduce the devastating impact that the Foreign Investment in Real
Property Tax Act (FIRPTA) places on foreign investment in U.S. real estate.
Additionally, the package would renew through 2016 provisions to promote energy
efficiency in multifamily buildings. |
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NMHC Chairman: Affordability and Hoop Dreams Revisited |
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A year ago, my company,
Avanath Capital Management, acquired Northpointe Apartments, a 528-unit
apartment community built in the 1960s in Long Beach, Calif. It is an
affordable property, located in a super ethnically diverse, working class
neighborhood in North Long Beach, close to the cities of Compton and Paramount.
The rapper, Snoop Dogg, grew up a couple of miles from our property. |
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| OMNIBUS |
| In a Nutshell: Multifamily and FY 2016 Omnibus Funding |
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The omnibus legislation funding the Federal Government
for Fiscal Year 2016 that was approved by Congress last week, and signed by
President Obama, included wide-ranging provisions that touched many aspects of
the multifamily industry from housing finance reform to assisted housing to
research related Census data. (Don’t miss all the details on the omnibus in
relationship to other key multifamily issues throughout this edition of Multifamily Markup.) |
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| INVESTMENT |
| EB-5 Program Reauthorized and Temp Staff Gets More Flexibility |
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After months of contentious debate, troubling press coverage
and oversight
reports calling into question parts of the EB-5
“Jobs for U.S. Visa” Immigrant Investor Program,
Congress decided to reauthorize the program
unchanged through September 2016. The provision to
extend the program was strategically tied to the omnibus Federal Government funding measure. The program
allows a foreign investor, and his or her family, to obtain a U.S. green card
by making an investment in a capital project that results in the creation of
permanent jobs. It’s an important source of investment in commercial real
estate projects including multifamily. |
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| INFORMATION SHARING |
| Cyber Info Sharing Bill Becomes Law |
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Shortly before leaving town for their holiday break,
Congress passed the "Cybersecurity Act of 2015" as part of the large end-of-year omnibus
spending bill. This bipartisan, compromise legislation was born out of three
separately passed bills that NMHC/NAA have long supported. |
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| CLEAN WATER ACT |
| Omnibus Leaves Water Rule on Cutting Room Floor |
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The Omnibus Federal Government funding bill failed to
include a prohibition on funds to enforce the Environmental Protection Agency
(EPA) and Army Corps of Engineers’ (Corps) controversial “Waters of the U.S.”
(WOTUS) rule. But the legislation did include a provision that restricts the
application of the rule in agricultural areas, including farm ponds and irrigation
ditches. The rule would impact the multifamily industry by significantly
expanding the scope of lands that will be subject to federal permitting
requirements under the Clean Water Act. |
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| CAPITAL MARKETS |
| 2016 Scorecard Bumps Multifamily Volume Caps to $31 Billion |
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The
Federal Housing Finance Agency (FHFA) released its 2016 Scorecard on December
17, which is used to both assess activities at the government-sponsored
enterprises (GSEs), Fannie Mae and Freddie Mac, as well as outline priorities
in the coming year. The new scorecard preserves the volume caps on multifamily
business at Fannie and Freddie. But it raises the caps for each to $31 billion,
in comparison to 2015 and 2014 when the caps remained the same at $30 billion
for both. |
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| AFFORDABILITY |
| Fannie, Freddie "Duty to Serve" Webinar on December 22 |
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The Federal Housing Finance Agency (FHFA), Fannie Mae
and Freddie Mac’s regulator, released draft “Duty to Serve” guidance on
December 15. The guidance encourages Fannie and Freddie to develop plans for
boosting mortgage finance in underserved markets. Ultimately, the proposal
focuses on preserving affordable housing, adopting policies that help
low-income borrowers purchase manufactured housing, and increasing the
availability of affordable mortgage credit for lower income families in rural
areas. |
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| HUD |
| Congress Cuts Affordable Housing Red Tape |
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On December 4, President Obama signed the “Fixing America's Surface
Transportation (FAST) Act” into law. The $300 billion package funds
the highway and transit system in our nation for five-years. Of interest to the
multifamily industry is language included in the bill by House Financial
Services Committee Chairman Jeb Hensarling (R-TX) that improves and streamlines
several of HUD’s rental housing programs. |
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| SECTION 8 |
| House Committee Takes Common Sense Section 8 Reform Steps |
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On December 9, the House Financial Services Committee approved the “Housing Opportunities Through Modernization Act of 2015,” which encourages common sense reforms to HUD’s Section 8 Housing Choice Voucher Program. The bill would also extend the contract term for project based vouchers from 15 to 20 years. Specifically, the legislation would streamline the Section 8 voucher program’s property inspection process by allowing immediate occupancy if the apartment home has
been inspected within the past 24 months. This would reduce the length of time an apartment is vacant and limit move-in delays for residents. |
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| EMPLOYMENT |
| Industry Presses Congress to Oppose Joint Employer and Overtime Rules |
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NMHC/NAA recently urged Congress to oppose burdensome
employment rules expanding the definitions of joint employer and mandatory
overtime. Specifically, in its August Browning-Ferris Industries ruling, the
National Labor Relations Board (NLRB) significantly expanded the definition of
a joint employer. This could have a significant impact on multifamily firms who
may become liable for the actions of subcontractors, suppliers, vendors and
temporary staff. Meanwhile, in June the
Department of Labor proposed to increase the salary threshold for white collar
workers who are entitled to overtime pay protections under the Fair Labor
Standards Act (FLSA). Multifamily and other industry workers would be impacted
because overtime pay would be determined based only on falling below the
threshold. |
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| LEAD BASED PAINT |
| EPA Reminder: Stay Current with Lead Paint Rules and Regulations |
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Owners and managers of residential property built
before 1978 are required to be in compliance with federal and state
regulations. That’s unless they have performed certain specified tests on their
properties which have resulted in a lead-free determination. Recently, the
Environmental Protection Agency (EPA) announced 75 enforcement actions under
the Renovation, Repair and Painting regulations (RRP). These regulations
require renovation contractors and training providers to protect people from
harmful exposure to lead dust and debris. This EPA announcement serves as an
important reminder to the multifamily industry to stay current with
certification and training requirements and to work lead-safe. |
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| DATA SECURITY |
| Cyber Remains a Priority as the Year Draws to a Close |
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The week of December 7 proved to be a busy one for
cyber-related issues in the nation’s capital. Specifically, the Federal Trade
Commission (FTC) reached a high-profile settlement, a House committee marked up
a data security bill, and the House and Senate made significant progress on a
final compromise on information sharing legislation. Given the amount of
personal information that apartment firms collect, including Social Security
numbers, driver’s license numbers and more as part of the leasing process,
these developments are a high priority for the industry. |
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| NMHC EVENTS |
| Register Today: 2016 NMHC Apartment Strategies Outlook Conference |
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Join
us for the 2016 NMHC Apartment Strategies Outlook Conference on January 19 – preceding the NMHC Annual Meeting – at the Hilton Orlando Bonnet Creek/Waldorf
Astoria in Orlando, Florida. The conference is an entire day of trends,
statistics and powerful business insight into what lies ahead next year for the
economy and our industry. Please note that the Apartment Strategies Conference
is open to members and non-members and requires separate registration from the Annual
Meeting. Register Now! |
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| NMHC Members Step Up Again! |
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NMHC members met with senior Senator Michael Bennet
(D-CO) this month. Bennet is a pragmatic, independent thinker with a business
background. He has emerged as an effective leader with a proven record of
bringing people together to deliver results for working families. |
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| The House and Senate are in recess. |
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HUD Secretary Castro and World Catch “Star Wars”
HUD Secretary Julián
Castro and his brother Representative Joaquín Castro (D-TX) were spotted
together catching the latest blockbuster “Star Wars” movie along with the
masses – sans any galactic costumes. Find out where they went, and when, to
watch the hottest flick on the planet.
Read
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