Browse Tag: Capitol Hill

Commercial Podcast: Flood Insurance Program Renewal Passes In DC

capitol hill

 

In the latest Commercial Podcast from NAR Treasurer Bill Armstrong, news comes of the passage on Capitol Hill of the National Flood Insurance Program.  You can hear the cast, called “Flood Insurance Win” in its entirety here.

On June 29th, the Senate passed the Biggert-Waters Flood Insurance Bill, and President Obama signed it into law on July 9th. This is a  culmination of years of steady effort by NAR members and its legislative team, including  a final push at NAR’s Midyear Legislative Meetings and REALTOR® Rally.

The years of temporary extensions to the National Flood Insurance Program (NFIP) were by definition unable to offer protections to commercial property markets, and in fact led twice to shutdowns, including one that stalled more than 40,000 real estate transactions requiring flood insurance for financing in June 2010 alone.

Reauthorization of NFIP means stakeholders will no longer need to take their chances in the virtually nonexistent market for private flood insurance. There are 21,000 communities across the US that require flood insurance as a financing prerequisite, and the passage of the bill ensure that 5.6 million business and home owners will have access to the coverage they need.

The bill addresses not just the coverage but also sources of the problem in the market.  It has provisions for more accurate flood plain mapping so that the industry can better target where flood insurance is required and where it is not.  Also included are provisions for a more streamlined process for challenging the accuracy of the flood plain map in use by the federal government in a business’s area of operation.

Biggert-Waters ensures that taxpayers will spend less for federal assistance for flood disasters over the long run.  You can be sure NAR will carefully monitor the program’s new implementation and be on the lookout for reforms as needed to protect commercial property owners.

Listen to Bill’s podcast here.

 

(Photo credit: Kynan Tait)

 

 

 

Stay On Top Of Important Local And National Commercial Real Estate Legislation With Scout

One of the greatest things about our system of government is the amount of lawmaking done in public.  The texts of bills, and speeches on bills of all kinds is public information. When proposed laws come up, we have a chance to see what they are, where they came from, who they will benefit, who they will impact and why, and when the votes are coming.

But because of all the work involved, it’s still a only a slim chance.  Being allowed access to this information is merely the first step. For example, NAR Commercial’s efforts on Capitol Hill include this exhaustive work of staying on top of the congressional record, watching carefully for issues that relate to commercial real estate when they arise, tracking their progress through the chambers and replicating all of this for all 50 states in addition to DC.

Before action comes alert, filtering, progress monitoring.  So when a free software tool comes along to allow individuals to help out with the legwork needed before action, you bet we’re going to talk about it.

The Sunlight Foundation is a non-partisan, non-profit based in DC dedicated to making government transparent and accountable.  They’ve rolled out Scout, which is an awesome new tool that alerts you when Congress or your state house proposes legislation that affects you or your commercial real estate clients.  You set up keywords such as “retail” or “commercial real estate” or “property tax” and the site will alert you when these terms appear in pending legislation — including in your state house!

Scout’s uses for commercial real estate pros are many.  All real estate is local, and so is all state legislation. Since Scout works with state houses and not just DC, there are numerous opportunities to use it to directly add value to your relationships.  Early warning about legislation coming down the pike in the state house about road construction in a given area can be a great subject of discussion between you and your retail clientele.  Bills proposing anything touching financial issues probably matter to your clients – Scout lets you be the one to bring them up.

Similarly, when Congress in DC kicks around changes in REIT accounting, it can help those of you in the investment side know what’s coming tax-wise and adjust accordingly.

Check out Scout. Watch the short tutorial video below and share with us what you find.  Help us keep government working for you.

 

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NAR Signs Letter Supporting US REIT Act: What’s In The Bill?

English: Capitol Hill

Some commercial real estate advocacy news from the Hill: Hon. Patrick J. Tiberi (R-OH) and Hon. Richard E. Neal (D-MA), both co-sponsors of H.R. 5746, also known as the Update And Streamline REIT Act (U.S. REIT ACT)  received a letter from NAR and major trade associations in support of the Congressmen’s bill.

Letter text:

June 11, 2012

The Honorable Patrick J. Tiberi The Honorable Richard E. Neal

United States House of Representatives United States House of Representatives

106 Cannon House Office Building 2208 Rayburn House Office Building

Washington, D.C. 20515 Washington, D.C. 20515

Dear Representatives Tiberi and Neal:

On behalf of the commercial real estate industry, we are writing to express our support for H.R. 5746, the Update and Streamline REIT Act (U.S. REIT Act), and to thank you for your leadership in co-sponsoring this non-controversial, bipartisan legislation.

In 1960, Congress enacted the original tax provisions that created the opportunity for individual investors to obtain the benefits of large scale, income-producing real estate while diversifying their investment portfolio. Today, REITs are widely held entities that own about $900 billion of commercial real estate properties, amounting to approximately 20% of investment grade commercial real estate in this country. At little or no revenue cost, the U.S. REIT Act would make a number of narrowly targeted, but important, changes to the tax rules applicable to REITs to enable them to operate effectively, keep up with market changes, and remain consistent with the Congressional goal of more than five decades ago of making professionally managed, income producing real estate available to investors from all walks of life.

Commercial real estate is an important contributor to the U.S. economy and impacts the way in which Americans live, work, shop, and carry on business. REITs are a small but significant part of the larger real estate community. We applaud your efforts to keep the rules governing REITs up to date to make it easier for investors to diversify their retirement and savings portfolios, and we fully support H.R. 5746.

Sincerely,

American Hotel & Lodging Association

American Land Title Association

American Resort Development Association

American Seniors Housing Association

Building Owners and Managers Association (BOMA) International

CCIM Institute

CRE Finance Council

Institute of Real Estate Management

International Council of Shopping Centers

Investment Program Association

Manufactured Housing Institute

NAIOP, Commercial Real Estate Development Association

National Apartment Association

National Association of Real Estate Investment Trusts

National Association of Realtors

National Multi Housing Council

Realtors Land Institute

Society of Industrial and Office Realtors

The Real Estate Roundtable

So What’s In The Bill?

The U.S. REIT act (full text of the bill here) (detailed summary from REIT.com here) proposes changes in the law governing the sale of REIT assets, the distribution of dividends and other aspects.  A quick summary follows:

Dealer Sales Safe Harbor Provisions

Under some conditions, REITs can earn a stiff penalty of 100% taxability on the sale of certain assets.  In “prohibited transactions” or “dealer sales” as currently defined, an rental or timber asset meets certain thresholds of capital improvements made to a rental property or a REIT has performed greater than seven sales during that year.  The bill proposes the liberalization of these requirements, making it easier to operate effectively and with the liquidity they need.

The Preferential Dividend

Tthe current rules on distribution of dividends among a REIT’s investors are under proposed change.  The change is proposed in the wake of the Regulated Investment Company Modernization Act, signed into law in 2010.  In that law, mutual fund preferential dividend distribution rules were liberalized; the U.S. REIT act seeks similar loosening and related changes.

More: Income and Asset Tests, Duplicative Taxation

Also up for change is the formula allowing what ratios of asset classes REITs may hold, as well as a change in accounting rule that seeks to avoid the current potential for double taxation.

Check out the entire summary from REIT.com here.

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Your Voice On The Hill: NAR Commercial Advocacy Timeline

The western front of the United States Capitol...
The Hill (Photo credit: Wikipedia)

Not to toot our own horn (well, okay, maybe a little)  but before and since the 2008 financial crisis unfolded, commercial REALTORS®  have been proud to bring a loud and consistent voice to Washington, advocating for Congressional support on the issues that affect our commercial practitioner membership.

NAR’s Commercial Real Estate Advocacy Timeline 2008-Present is a great read to catch up on what the commercial professional has seen done and promises to see in the future in terms of advocacy.

Dealing with the folks on the Hill is not a cakewalk.  Washington is legendary for gridlock, and making a case for our industry is not a job to take lightly. But the principles of the commercial real estate market speak directly to the unique narrative of opportunity and growth that our country will always be known for.  Making sure that isn’t forgotten on Capitol Hill is why we’ve been able to consistently bring home a series of advances for our industry, including these highlights and more:

  • Loudly registering concerns about FASB‘s lease accounting proposals
  • Urging Senate leadership to include statutory framework for a US covered bond market, which could provide the industry with new credit sources
  • Supporting Internet Sales Tax fairness, assisting states to collect an estimated $23 billion in uncollected sales taxes while helping brick-and-mortar retail businesses face fair competition
  • Achieving Congressional extension of flood insurance to provide certainty and avoid disruption in real estate markets
  • Advocating for REIT and other asset-backed issuers in the face of SEC review
  • Supporting extension of key SBA programs, aiding credit availability in office, retail and industrial sectors.

And so much more.  Take a look at the full timeline here and follow along as we fight the good fight for our members and our industry.

What’s up in your neck of the woods in terms of these proposals?  What would you tweak? What would you like to see us take up in Washington?

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