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December 22, 2015
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

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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NMHC Insider
OMNIBUS
In a Nutshell: Multifamily and FY 2016 Omnibus Funding
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
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
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
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
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
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
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
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
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
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
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
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 PAC
NMHC Members Step Up Again!
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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Hill Watch
The House and Senate are in recess.
Media Roundup
Obama Signs $1.8 Trillion Funding and Tax Deal
The Hill
Praise, Criticism for GOP as Obama Wraps 2015
Roll Call
Washington Post: Recapitalizing Fannie, Freddie is a "Recipe for Housing Disaster"
HousingWire
Congress Should Reject Gutting Fair Housing Rule with Riders
The Hill
More Renter Households Face Affordability Woes
Multi-Housing News
House GOP Bill Includes REIT-Spinoff Ban
Wall Street Journal
EPA Broke the Law with "Covert Propaganda," Says Watchdog
The Hill
Congress Approves First Major Cyber Bill in Years
The Hill
The Scoop

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.

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