A unified voice.

Housing and community development have become top priorities for many communities in recent years, fueled by a worsening affordable housing shortage and growing citizen calls for more livable communities and a better quality of life.

Unfortunately, there is a growing disconnect between the country's housing needs and the federal housing policy. As it has for the past 50 years, national housing policy continues to emphasize homeownership almost exclusively. While homeownership is a worthy goal for many families, it cannot solve many of the country's most pressing challenges.

Raising the homeownership rate will not solve the affordable housing shortage. It will not create homes for the nurses, teachers, fire fighters and police officers who cannot find shelter reasonably close to their jobs. It cannot hope to house the estimated 13 million immigrants who will come to this country in the next 10 years or the nation's nearly 74 million Baby Boomers as they age and can no longer take care of themselves. For many of America's most pressing challenges, from suburban sprawl to affordable housing, apartments are a much better solution.

By 2030, there will be 94 million more people in the United States than there were in 2000. And all of these people need somewhere to live, somewhere to work mad somewhere to shop. If the country hopes to accommodate this population growth without giving up all green space and adding to the nation's pollution and traffic congestion, Americans need a more balanced housing policy that explicitly recognizes and values apartments and rental housing.

Apartments help create stronger and healthier communities: by offering enough housing, for the workers that businesses need: by reducing the cost of providing public services, such as water. sewer and roads; and by creating vibrant live/work/play neighborhoods.

Not only are apartments needed, but a growing number of Americans want them. For generations, married couples with children dominated housing markets. But today those families are less than 25 percent of American households. In their places are young professionals, childless couples, empty nesters and single parents who want the conveniences, amenities, shorter commutes and financial freedom that apartment life gives them.

The National Apartment Association (NAA) and the National Multi Housing Council (NMHC) have joined together to advocate for a more balanced housing policy, one that respects the rights of individuals to choose housing that best meets their financial and lifestyle needs. NAA/NMHC urge decision-makers at all levels of government to work with the apartment industry to craft a smarter housing policy that:

* Ensures that everyone has access to decent and affordable housing, regardless of his or her housing choice:

* Respects the rights of individuals to choose the housing that best meets their financial and lifestyle needs without disadvantaging, financially or otherwise, those who choose apartment living;

* Promotes healthy and livable communities by encouraging responsible land use and promoting the production of all types of housing:

* Recognizes that all decent housing, including apartments, and all citizens, including renters, make positive economic, political and social contributions to their communities: and

* Balances the expected benefits of regulations with their COSLS to minimize the impact on housing affordability.

In a unique relationship, NAA and NMHC have joined forces for more than a decade to form a Joint Legislative Program. This partnership creates a clear, consistent voice for the apartment industry on Capitol Hill.

The NAA/NMHC Joint Legislative Program ensures that apartment firms are able to engage government officials in constructive, ongoing dialogues and participate in policy decisions affecting their ability to provide housing to million of Americans.

Additionally, the Joint Legislative Program, in concert with 10 other national real estate organizations, is actively involved with the Congressional Real Estate Caucus (CREC) on Capitol Hill.

The Joint Legislative Program will remain in the vanguard of bringing key issues before legislators and regulators in the ongoing debate over the federal government's role in supporting apartment living.

The National Apartment Association

The National Apartment Association (NAA), based ill Alexandria, Va., is the leading advocate for quality rental housing. NAA is a federation of 191 state and local affiliated associations representing more than 51,000 members responsible for more than 6.1 million apartment homes nationwide. It is the largest broad-based organization dedicated solely to rental housing. NAA members include apartment owners, management executives, developers, builders, investors, property managers, leasing consultants, maintenance personnel, suppliers and related business professionals throughout the United States and Canada.

NAA strives to provide a wealth of information through advocacy, research, technology, education and strategic partnerships. NAA provides six national designation programs; publishes UNITS magazine and other industry publications; holds an annual Education Conference & Exposition; and promotes industry professionalism. For information, call 703/518-6141, e-mail [e-mail] or visit www.naahq.org.

National Multi Housing Council

Based in Washington, D.C., the National Multi Housing Council (NMHC) is a national association that advocates on behalf of the apartment industry and the nearly 15 million American households who live in apartment communities of five or more units. NMHC's members are the principal officers of the larger and more prominent apartment firms and include owners, developers, managers and financiers. The Council's legislative and regulatory agenda targets a wide variety of issues, including housing policy, multifamily finance, environmental affairs, tax policy, fair housing, building codes, technology, human resources and rent control. In addition, NMHC conducts apartment-related research, encourages the exchange of strategic business information and promotes the desirability of apartment living.

Congressional Real Estate Caucus

The Congressional Real Estate Caucus (CREC) was formed in May 1998 at the Real Estate Summit on Capitol Hill organized by the NAA/NMHC Joint Legislative Program Staff. Reps. Mark Foley (R-Fla.) and Richard Neal (D-Mass.), former mayor of Springfield, Mass., serve as co-chairs. The caucus is endorsed by 12 national real estate groups representing 2 million members and companies that own, build, manage and finance real estate. CREC serves as a forum for members of Congress and real estate professionals to discuss federal policy and its impact on the nation's real estate industry.

CREC seeks to ensure implementation of federal policies that further real estate's contributions to national, state and local economies. Real estate accounts for one-quarter of every tax dollar, constitutes half the nation's domestic investment and is responsible for 12 percent of the nation's gross domestic product and an estimated 8.9 million jobs. Thus, protecting and promoting a healthy real estate sector can only serve to strengthen the nation's economy.

PLEASE JOIN US: We look forward to seeing you at the 2006 NAA Capitol Conference, March 12-15, in Washington, D.C. Visit www.naahq.org for details.

Housing Policy

Apartment rental housing is a key element to the nation's housing and must be part of a balanced approach to serving the housing needs of all Americans. Many areas of the country are facing critical shortages of homes within reach of working families. Yet Congress continues to push for new homeownership incentives despite mounting evidence that the homeownership envelope has been pushed too far. At the same time, the Section 8 Housing Choice Voucher Program--the only federal program available to help struggling families find safe, decent rental housing--has been targeted for funding cuts and drastic restructuring.

NAA/NMHC will continue to advocate for a more balanced housing policy that effectively addresses the nation's most pressing housing needs, and one that explicitly recognizes the importance of apartments in the nation's future growth plans. And NAA/NMHC will oppose efforts to direct even more of the limited federal housing resources toward homeownership at the expense of critically needed rental housing programs.

Barriers to Multifamily Development

NAA/NMHC Position: Apartments are a vital, but often overlooked, part of the community development toolbox. If America is serious about wanting to change the future and create healthier and stronger communities in this country, apartments and compact development have to be thought of in a more positive way

Background: The U.S. population is growing faster than many people realize. Ali of these people need somewhere to live, somewhere to work and somewhere to shop. The only way the United States can accommodate this kind of population growth without sacrificing quality of life is to embrace compact, mixed-use development that integrates homes, schools, shopping, jobs and entertainment into neighborhoods. High-quality apartments are an important part of this future growth plan.

Unfortunately, many Americans oppose apartment construction because of outdated fears about rental housing. Local governments, eager to retain the support of voters, erect barriers to higher density development. Even worse, many of the country's zoning laws are more than 50 years old and prohibit the kind of vibrant, walkable communities that citizens want.

NAA/NMHC's outreach, seeking a morn level playing field between rental housing and homeownership, has produced numerous successes, including the U.S. Department of Housing and Urban Development's (HUD) effort to remove barriers to multifamily housing through its new Regulatory Barriers Clearinghouse.

Action Requested: NAA/NMHC strongly support legislation to fund research, identify, model programs and analyze the economic and social benefits of a balanced approach to housing. Outdated zoning laws that discourage "smart growth" should be revised.

Homeownership Incentives

NAA/NMHC Position: NAA/NMHC recognize the importance of homeownership to America; however, a "homeownership above all else and at any cost" policy is unwise. Trying to create a nation of too many homeowners will ultimately harm not only many of those owners, but also local communities.

Background: Homeownership is a special part of the American fabric, but there is mounting evidence that America may be pushing the homeownership envelope too far. Foreclosures of conventional loans in 2004 hit a near-record level, and FHA foreclosures were at their highest level ever, more than double the average for the past 21 years. In the third quarter of 2005, FHA mortgages that were three or more months overdue were at record levels. Foreclosures on conventional mortgages have remained flat. However, even with quarterly fluctuations, FHA foreclosures continue their upward trend. In the sub-prime loan arena, mortgages that were three or more months overdue have not subsided entirely from their 2003 peak levels.

Rising foreclosures not only hurt working families, they also hit local communities hard. When families default and abandon their houses, property values decline and neighborhoods can spiral downward. Cities, counties and towns lose tax revenue and incur higher costs associated with vandalism and other social problems. In 2004, one researcher estimated that cities spend an average of $73,300 per FHA foreclosure.

NAA/NMHC are not the only voice raising concerns. A Nov 27, 2005, Los Angeles Times article cites research suggesting that "even if prices simply flatten, it is going to cause significant pain and have a large impact on the economy. Appreciation is not bonus money for a lot of families; it is money that has already been spent."

Despite those warning signs, in 2005 the administration and Congress once again proposed several new and more aggressive homeownership policies, including a federally insured, no downpayment loan program. NAA/NMHC helped defeat several of these initiatives in the 108th Congress, including proposals that would have allowed certain households to deduct the cost of private mortgage insurance from their taxes and a proposal for the zero downpayment, federally insured loan program.

Action Requested: NAA/NMHC urge Congress to fully consider the nation's most pressing housing needs and the needs of working families before advancing any additional homeownership incentives.

Section 8 Housing Choice Vouchers

NAA/NMHC Position: NAA/NMHC support full funding for all existing Section 8 vouchers, as well as continued federal administration of the program. NAA/NMHC support refining the program to make it more cost-effective without reducing the number of families served. And NAA/NMHC support additional reforms to make the program more market-friendly to encourage more apartment firms to accept Section 8 vouchers. Finally, NAA/NMHC oppose any effort to make participation in the Section 8 program mandatory.

Background: NAA/NMHC's federal efforts in 2006 take place amid a bigger policy shift as the federal government continues its effort to transfer responsibility for affordable housing to state and local governments. For decades, Section 8 vouchers have provided housing assistance to struggling families. But the program has been plagued with inefficiencies and onerous bureaucratic requirements that discouraged private owners from accepting vouchers. As a result, many vouchers went unused, which allowed Congress to routinely rescind money from the program to fund other operations.

In the late 1990s, some program reforms were implemented that made the program more attractive to private owners, and voucher use rose to 96 percent. NAA/NMHC and others have spent several years working with HUD to identify additional programmatic reforms to raise usage even higher to serve more people.

In addition to programmatic obstacles, the program faces continued funding problems. In FY 2006, the program's funding was further reduced by a 1 percent across-the-board funding cut included in the Congressional budget reconciliation process. In addition, the formula for calculating how much each locality will receive for housing vouchers was changed in 2004. Before that, funding was based on the actual rent for each voucher in use. As of 2004, however, voucher funding was converted to a dollar-based system, instead of the prior unit-based system. Under this new system, each voucher is funded at a specific dollar level regardless of the rent. In FT 2006, this problem is further exacerbated by additional changes to the funding formula. Instead of basing funding on costs over the past 12 months, funding is based on a three-month period in 2004. This formula may not reflect actual current costs and will likely result in funding shortfalls in many cities.

Against the backdrop of these funding challenges, several states and localities have attempted to address their affordable housing shortages by forcing housing providers to make Section 8 program acceptance mandatory. Some jurisdictions have even made families and persons receiving housing assistance payments a protected class under state civil rights laws, making it a civil or even criminal violation to opt out of the Section 8 program. These efforts go against the principles on which the Section 8 program was created. The program's creators recognized that participants would bear additional administrative and regulatory costs, above and beyond those necessary to serve as conventional market housing providers. Thus, they implicitly preserved the right to participate or not. They failed to make this distinction explicit in the federal law, however, and several state legislatures have considered measures to effectively mandate participation in the Section 8 program.

Action Requested: NAA/NMHC strongly advocate reform of the current Section 8 housing choice voucher program to make the program more transparent and to reduce burdensome regulatory requirements. NAA/NMHC urge Congress to provide sufficient funding for all authorized vouchers and to reject efforts to turn the program into a state-based block grant. In addition, NAA/NMHC urge states to respect the federal preemption of state and local laws intended by the program to keep participation voluntary.

Rent Control

NAA/NMHC Position: NAA/NMHC encourage affordable housing production and voucher assistance instead of rent control to address the national challenge of affordable housing availability.

Background: Forbes magazine lists rent control as one of the 10 worst economic ideas of the 20th century, writing: "Here we have a policy initiative that has done huge damage to cities around the globe, it is very. hard today to find an economist supporting rent control."

In his definitive academic research work, "A Reevaluation of Residential Rent Controls," Anthony Downs of the Brookings Institution concludes, "[M]ost of the benefits produced by rent controls aid moderate-, middle- and upper-income households, rather than the poor households they may have been adopted to help," HUD concurs: "The benefits of rent control are poorly targeted ... Significant numbers of well-to-do renters live in rent-controlled apartments and enjoy substantial benefits, while many lower-income renters receive little or no benefit." The Advisory Commission on Regulatory Barriers to Affordable Housing, a blue-ribbon panel of experts, wrote, "As a means of redistributing income to the poor ... rent control is extraordinarily inefficient, if not counterproductive."

Action Requested: NAA/NMHC urge Congress and the states to provide sufficient incentives for investment in rental housing to relieve housing shortages.

Housing and the Hurricane Disasters

NAA/NMHC Position: As the nation struggles to recover from last year's hurricane disasters, one of the most pressing needs is to find safe and decent housing for Hurricane Katrina's victims. NAA/NMHC believe it is imperative that the government implement disaster housing programs that house evacuees in an efficient manner that affords the evacuee with housing and the apartment owner with the assurance that the rent will be paid.

Background: In the immediate aftermath of hurricanes Katrina, Rita and Wilma, apartment owners opened their doors to evacuees. In some cases apartment owners offered free housing to those who were the neediest and in many cases owners offered rent discounts, waived security deposits and application fees and offered flexible lease terms.

As the apartment industry pledges to continue to house as many of these families as practical, it is imperative that the government develop a plan that includes appropriate counseling to help evacuees navigate the three different government assistance programs currently available to them--HUD's Katrina Disaster Housing Assistance Program (KDHAP), FEMA's Section 408 Individuals and Households program and FEMA's Section 403 program funding vouchers.

In November: FEMA took steps to move evacuees from hotels to apartments, but its long-term housing plan does not meet the needs of the evacuees or the housing providers. For one, it only makes rental assistance available in throe-month allotments, even though the majority of evacuees will not be able to return to their homes for 12 to 18 months. The three-month plan also ignores a housing provider's need for longer term commitments.

Furthermore, many evacuees who received their initial three-month rental assistance check were not informed that it could only be used for rent. As a result. FEMA acknowledges that many evacuees spent the money on urgent needs such as food, clothing and medicine. NAA/NMHC have urged FEMA to take the appropriate steps to advance money now to the evacuees to pay their back rent or to set up a program to facilitate the payment directly to the apartment owner.

In its Nov. 22 announcement, FEMA also declared that it would stop reimbursing cities for hurricane voucher programs as of March 1, 2006. Unanswered is whether the agency will honor prior commitments to 12-month voucher leases in Houston and six-month leases in Dallas. At this point, FEMA has indicated that no extensions of the March 1 deadline will be available; however, the agency will reimburse the city for any fees incurred by breaking the leases early.

Action Requested: NAA/NMHC urge the government to fulfill their commitments to evacuees and housing providers specifically:

* NAA/NMHC urge the government to honor its prior commitment and fund the 12- and six-month voucher programs created in many Texas cities.

* NAA/NMHC urge FEMA to take the appropriate steps to advance money now to the evacuees to pay their back rent or to set up a program to facilitate the payment directly to apartment owners.

* NAA/NMHC urge the government to expedite the ability for owners to conduct background checks. During the immediate emergency this was not possible, but NAA/NMHC request access to criminal information as a normal requirement to house evacuees for an extended period of time.

Property and Asset Management

Growing professionalism and new technologies are transforming the experience of those who live in apartments. Fueled in part by the rise of publicly owned apartment companies and their customer-centric approach to apartment management, today's apartment residents receive a variety of new services and conveniences that make apartment living a desirable alternative to traditional single-family living.

While large, publicly owned apartment firms are a presence in the apartment sector, the vast majority of residential property managers are small businesses. Of the nation's rental housing managers, 99 percent qualify as small businesses (i.e., they have total "annual receipts" of no more than $5 million).

Although many important decisions affecting both large and small stakeholders in the residential property management industry are matters of state law, federal legislation and regulation significantly affect market-rate and subsidized apartments alike.

As the 109th Congress begins its second session, a number of federal legislative and regulatory issues "affect property management. In addition to the priority issues detailed below, NAA/NMHC will closely watch judicial, regulatory and legislative developments that significantly affect the interests of apartment owners and managers.

Do-Not-Fax Laws

NAA/NMHC Position: NAA/NMHC support reasonable measures to provide privacy protections to consumers: however, federal regulations governing fax communications should be reasonable and should not restrict otherwise legitimate communications and marketing practices.

Background: In 2003, the FCC revised its earlier interpretation of the agency's rules regulating the use of fax communications. For the first time, it required firms to obtain advance, written consent before sending most "commercial" faxes, even to those with whom the sender has an established business relationship. That significant change from current law not only created an unreasonable compliance burden on apartment firms, it also created new potential liability for class action lawsuits. As a result of opposition by NAA/NMHC and others, the FCC postponed implementation of the rule several times. On June 28, Congress passed legislation (the Junk Fax Prevention Act) once and for all overturning the FCC's onerous new rules.

The FCC will now pursue a rulemaking process to interpret various provisions of the legislation, including time limitations for the Existing Business Relationship (EBR) exemption and further define the opt-out obligations.

Action Requested: NAA/NMHC urge the FCC to adopt reasonable rules that do not undermine the legislative intent of Congress to permit legitimate fax communications that are necessary to the operations of businesses and trade associations.

Immigration Reform 

NAA/NMHC Position: NAA/NMHC strongly support comprehensive reform that would improve the effectiveness of employee screening processes without increasing employer burdens when verifying an individual's legal status to work. NAA/NMHC also urge legislation that would allow employers to hire certain foreign workers under a temporary guest worker program.

Background: The combination of a need for workers and an inadequate immigration system has caused an unacceptable status quo. Experts estimate there may be as maw as 10 million undocumented workers throughout the country performing work that most Americans will not do themselves. By not creating adequate legal avenues for hiring foreign workers and not addressing the status of workers already here, Congress and the administration are not fully safeguarding the economy for the future.

U.S. immigration laws need to be reformed, but the answer does not lie in new laws that solely burden and penalize employers. Even the most diligent employers have difficulty identifying forged documents. Careful employers should not be penalized when they implement proper screening techniques. Employers currently have voluntary access to the federal government's Basic Pilot electronic/telephonic verification system to ensure that all employees are authorized to work. Though this is a good start, this experimental program has an unacceptable error rate. Nonetheless, the U.S. House of Representatives passed a controversial border-security measure (HR 4437) that would mandate participation in the error-fraught Basic Pilot system for both new and existing employees. The bill does not include a safe harbor provision and would impose significantly increased penalties on employers for alleged verification violations.

Improving national security does not simply require better employment verification enforcement, but a more rational, comprehensive immigration policy. Specifically, a comprehensive immigration reform package should include a temporary guestworker program that would allow employers to hire certain pre-screened foreign workers when other qualified workers are unavailable. HR 4437 does not include such a temporary guest worker provision.

The Senate is expected to take up immigration reform early this year, and several proposals have already been introduced. The Bush Administration has urged comprehensive immigration reform that includes a guest worker program.

Action Requested: NAA/NMHC strongly urge Congress to approve legislation that includes a phased-in, cost-effective employment verification system as part of a comprehensive package that also includes a temporary worker program.

Association and Small Business Health Plans

NAA/NMHC Position: NAA/NMHC strongly urge Congress to approve legislation that would improve access to health insurance for small employers and self-employed individuals by allowing them to purchase coverage through certain business associations, including trade groups and chambers of commerce.

Background: A significant portion of the tens of millions of Americans who lack health insurance own, or are employed by, small businesses that cannot afford to purchase health care coverage. There is virtually no competition among insurers that cater to small purchasing groups, a major contributing factor to the inaccessibility of affordable coverage. Association Health Plans (AHPs) or Small Business Health Plans (SBHPs) are one approach to improving access to affordable health insurance. Allowing groups of small businesses to join together via an association is one way to reduce costs.

On July 26, the U.S. House of Representatives approved a measure (HR 525) that would allow the creation of AHPs/SBHPs under a federally regulated system exempt from some state laws. That bill, along with a similar measure (S 406), is under Senate consideration. A separate Senate proposal (S 1955) would also allow AHPs/SBHPs, but would do so under state-level regulations. The Bush Administration and a broad coalition of business and employee groups support AHPs/SBHPs.

Action Requested: NAA/NMHC call on Congress to adopt legislation that would improve access to affordable health insurance coverage for small business owners and employees through AHPs/SBHPs.

Homeland Security 

NAA/NMHC Position: NAA/NMHC strongly support ongoing efforts to enhance homeland security while taking appropriate measures to ensure such actions do not unnecessarily interrupt or significantly burden the business operations of the apartment industry.

Background: In the post-September 11 world, the business community, including the apartment industry, is being confronted with what seem like daily doses of new government initiatives to protect the homeland against terrorism. Apartment firms now screen residents and employees against terrorist lists and report large cash transactions to federal counter-terrorism officials. They also comply with enhanced lease termination rights for deploying service members enacted in 2003.

In addition, the landmark intelligence reform legislation approved at the end of 2004 includes a provision encouraging the private sector to adopt a disaster and emergency preparedness standard. It advises the insurance industry and credit rating agencies to "consider a company's compliance standards" when making underwriting/credit-worthiness decisions. Congress is also considering a requirement for some real estate businesses to establish anti-money-laundering programs.

Action Requested: NAA/NMHC urge Congress and regulators to take a reasonable approach when instituting new laws intended to enhance homeland security so that the business community is not unduly burdened by unreasonable new compliance obligations or increased legal liability. NAA/NMHC will continue to work with their real estate partners through the Information Sharing and Analysis Center (ISAC) to coordinate efforts to improve the communications from the Department of Homeland Security (DHS) on threats and warnings as well as policy and planning activities.

HUD Fair Housing Enforcement Practices

NAA/NMHC Position: NAA/NMHC encourage HUD to increase funding for programs designed to promote the understanding of fair housing and federal accessibility requirements by all sectors involved in apartment design and construction.

Background: NAA/NMHC continue to lead the apartment industry in monitoring the U.S. Department of Justice's (DOJ) and HUD's fair housing enforcement activities.

In the area of accessible design, NAA/NMHC continue to monitor and generally support HUD's commitment to expand technical assistance to the industry and move away from an accessible design policy that had been focused almost exclusively on enforcement by advocacy groups. NAA/NMHC will also monitor HUD and DOJ accessible design enforcement activities for any changes affecting member firms. Specifically; NAA/NMHC will participate in DOJ's annual accessibility forum to showcase successful partnerships between multifamily property owners and the disability communities.

Action Requested: NAA/NMHC encourage Congress to direct a greater percent of the Fair Housing Initiatives Program (FHIP) funding for industry-directed education.

Privacy and Identity Theft

NAA/NMHC Position: NAA/NMHC support reasonable efforts to safeguard a consumer's personal information; however. those efforts should be limited to situations where there is a real threat of identity theft so companies are not overburdened with notification obligations that may not be warranted.

Background: Consumer privacy continues to rank high among federal lawmakers' priorities as the number of reported cases of fraud and identity theft increase. Recent security breaches have raised questions about whether sensitive consumer information, especially when collected by a data broker, may be falling into the wrong hands and contributing to increased identity theft. The FTC receives between 15,000 and 20,000 contacts a week from victims of identity theft and consumers who want to learn how to avoid becoming a victim. To address this growing problem, several bills have been introduced in the 109th Congress. Ali of the bills contain similar provisions, such as requiring prompt notification of security breaches, awarding more regulatory power to the federal government and setting minimum security standards for data security.

The apartment industry is most concerned with breach notification requirements and the regulations governing the disposal of consumer information.

Action Requested: NAA/NMHC encourage Congress to resist enacting overly broad notification and data destruction requirements and offer expertise to Congress and the federal agencies as various proposals wind their way through the legislative and regulatory process.

Telecommunications Policy

NAA/NMHC Position: NAA/NMHC strongly favor a healthy and competitive telecommunications industry that meets the reliability, technical capability and cost needs of apartment residents. Federal telecommunications policy should be based primarily on a free and open market, without legal restrictions and requirements that impair the management of a multi-unit dwelling.

Background: Telecommunications services are in great demand, and today's apartment residents require newer, faster and more sophisticated telecommunications capabilities. As a result, apartment owners rely on advanced telecom systems and services to satisfy resident needs and to establish an edge in real estate's highly competitive marketplace. Those needs can only be met when telecommunications providers compete in a freely operating market. Such competition has spurred the development of new technologies and higher quality service.

Some telecom providers have asked Congress for permission to ignore the normal service negotiations that must take place between property owners and providers and to instead be given mandatory access to multi-unit communities. Federal and state efforts to give telecommunications providers mandatory access are presumably pursued to serve the interests of individuals who reside in apartments. More often than not, however, these efforts result in less competition and higher prices because they make it difficult for small, competitive providers to survive. In addition, it forces apartment communities to adopt technologies that may soon become obsolete.

Action Requested: Members of Congress should reject any efforts by telecommunications providers who seek legislation that grants them special access privileges to private property.

Tax Policy

Federal tax policy should reflect the economic nature of investments in the financing of real estate and discourage laws causing an outflow of capital from real estate to other investments or distortions in the flow of capital to selective real estate sectors.

Tax Reform

NAA/NMHC Position: NAA/NMHC believe it is premature to adopt a position on tax reform until specific legislation is formally introduced and considered by Congress. Only in the context of specific legislation can NAA/NMHC evaluate the impact such changes will have on the taxation of real estate and rental housing as well as the implications they raise for overall national housing policy.

Background: On Nov 1, the President's Advisory Panel on Federal Tax Reform presented its final recommendations to the Treasury Secretary who will submit his own suggestions to President Bush. The president is expected to announce the administration's position on tax reform in 2006 and submit implementing legislation to Congress immediately thereafter. Congressional leaders have adopted a "wait-and-see" approach to tax reform, pending morn definitive guidance from the administration.

NAA/NMHC note the recommendation of the President's Advisory Panel on Tax Reform to modify the mortgage interest deduction which would be a positive step toward a more level playing field between rental housing and homeownership, a goal advocated by NAA/NMHC and other national housing organizations. At the same time, however, the Advisory Panel's proposal to eliminate the highly successful Low-Income Housing Tax Credit program would terminate the only federal support for the production of affordable housing and exacerbate the nation's housing problems. In addition, the negative experiences of the apartment industry as a result of earlier tax reform efforts, most notably the Tax Reform Act of 1986 and enactment of depreciation recapture in 1997, suggest the exercise of caution during this formative period.

Action Requested: NAA/NMHC urge the administration and Congress to undertake comprehensive tax reform initiatives carefully. Efforts to reform the tax laws should not be exploited as an opportunity, or provide an excuse, to Congress to increase the tax burdens on, or otherwise disadvantage, owners and renters of multifamily housing relative to other real estate and other asset classes.

Tax Cut Extensions

NAA/NMHC Position: NAA/NMHC support extension of several tax cuts previously passed by Congress and scheduled to expire.

Background: In the past several years, Congress passed major tax bills that included temporary tax cuts. The 2001 Economic Growth and Tax Relief Act (PL 107-16) reduced marginal tax rates, reduced the marriage penalty tax and reduced and then eliminated the estate tax. The 2003 Jobs and Growth Tax Relief Act (PL 108-27) accelerated individual income tax rates and reduced the tax on individual long-term capital gains and dividends to 15 percent.

In 2004, Congress extended many of the individual tax cuts through 2010 in the Working Families Tax Relief Act of 2004 (PL 108-311). However, many of the business-related tax cuts--specifically, reduced capital gains rates and taxation of dividend income at the capital gains rate--are still scheduled to expire in 2008.

Action Requested: Congress should extend the tax reductions for those items that are necessary to avoid disruptions to the economy.

Capital Gains

NAA/NMHC Position: NAA/NMHC strongly support efforts to reduce the capital gains tax on older properties and to repeal the 25 percent depreciation recapture rule established in 1997.

Background: In 1997, when Congress reduced the maximum tax rate on long-term capital gains to 20 percent (for assets held more than 12 months), it imposed a 25 percent depreciation recapture rate on the portion of the gain assigned to the depreciable portion of a property. In 2003, the capital gains tax rate was further reduced to 15 percent (through 2008), but the depreciation recapture rate was left unchanged.

The 25 percent depreciation recapture rate discourages owners of older properties in need of modernization from selling them to new investors willing to invest the necessary capital in them because of the tax bill the sale would generate. Imposing such a high depreciation recapture tax on apartment properties that have been depreciated from original cost fails to recognize the unique nature of commercial real estate. It also discriminates against real estate in favor of other asset classes.

In 1999, Congress approved a tax bill that reduced capital gains and the depreciation recapture rate, but the measure was vetoed. More recently, in January 2004, the Treasury Department recommended simplification of the calculation of capital gains depreciation recapture on certain types of assets, including real estate, by eliminating the special 25 percent rate and replacing it with a new "blended" rate based on a combination of ordinary income and capital gains tax rates.

Action Requested: NAA/NMHC urge Congress to rescind the onerous and unnecessary depreciation recapture rule.

Exit Tax

NAA/NMHC Position: NAA/NMHC support the elimination of current tax law provisions that discourage owners of older properties from selling those communities to new owners who can modernize them and preserve them as part of the nation's affordable housing stock.

Background: Under the current tax laws, when owners or investors sell a property, they must pay capital gains tax and depreciation recapture taxes on the gain. Many apartment communities cannot generate a high enough sales price to cover these "exit taxes." This puts communities with lesser economic value at risk of deterioration because the owners have no incentive to invest additional funds in a property with little or no cash-flow. As a result, many owners simply opt to hold onto the communities until their deaths, at which point no taxes will be assessed on the depreciated gain (and the possible capital gain above that) because the property's basis will be "stepped up" at death to current market value.

In 2003, the congressionally chartered Millennial Housing Commission recommended that Congress pass "exit tax relief" for owners who transfer affordable housing communities to entities that agree to preserve the communities and keep them affordable. Legislation based on this recommendation was introduced in both chambers of Congress in 2004 and is pending in the present Congress as HR 3715, the "Affordable Housing Preservation Tax Relief Act of 2005."

Action Requested: NAA/NMHC urge Congress to support the broadest and most administratively efficient relief from the "exit tax" problem in the belief that all apartment owners. whether federally assisted or not. should be eligible for such relief to attract new capital to older multi family communities for renovation and modernization.

Federal Estate Tax

NAA/NMHC Position: NAA/NMHC strongly support extension of the federal estate tax laws that will be in effect in 2009 to the year 2010 and beyond.

Background: In 2001, Congress passed legislation to eliminate the estate tax, which gradually reduces the tax rate and increases the size of estates excluded from taxation during 2002 to 2009. Then, for nine months in 2010, it will fully repeal the estate tax. But in October 2010, the law will revert back to the higher rates and smaller exclusions in place in 2001.

In addition to repealing the estate tax, the law also repeals "stepped-up" basis. Stepped-up basis determines whether heirs of depreciable properties pay capital gains taxes based on the fair market value of a property when they inherited it or on the lower accounting basis (the original purchase price less any depreciation taken by the donor).

Because the law repeals both the estate tax and the stepped-up basis provision, commercial property owners are better off retaining the estate tax law as it will exist in 2009: (1) assets are stepped up to fair market value at the time of the donor's death; (2) the first $3.5 million of an estate is excluded from taxation; (3) for assets beyond the $3.5 million exclusion, a maximum 45 percent tax rate is applied to the net fair market value (value minus debt); and (4) heirs may re-depreciate the property granted them using fair market value (stepped-up basis).

The U.S. House of Representatives has repeatedly passed legislation to make full repeal of the federal estate tax permanent, but the Senate has not acted. An attempt to make full repeal permanent is expected to occur in 2006.

Action Requested: NAA/NMHC urge Congress to extend the estate tax provisions scheduled to be in place in 2009 rather than fully repeal the estate tax.

Environmental Clean-Up

NAA/NMHC Position: NAA/NMHC believe Congress and the U.S. Treasury should allow immediate expensing of environmental clean-up costs for tax purposes.

Background: A significant portion of U.S. land is contaminated with environmental hazards that will have to be cleaned before the land can be put into productive use. These hazards include asbestos, leaking underground storage tanks, ground water contaminants, lead-based paint, airborne toxicities and radon Whether these sites are cleaned depends, in large part. on the economics of the situation, which, in turn, depends on federal tax treatment of those costs.

If taxpayers are forced to amortize the costs over the future life of the property instead of deducting them immediately, many clean-ups become cost prohibitive. Present tax law on environmental clean-up is unclear. Congress previously passed legislation allowing immediate deduction of certain costs incurred when remediating brownfields and extended the provision until Dec. 31, 2005.

Some tax experts argue that the costs should be matched against future revenue and thus capitalized. Other experts argue, just as strongly; that the costs are similar to those for repairs of equipment and thus should be an immediate expense.

NAA/NMHC are working with Congress and officials at the U.S. Treasury Department to provide a sound basis for immediate expensing of these costs.

In late 2005, the Senate and the House of Representatives approved separate bills to extend brownfield clean-up cost expensing for two years and to expand the provision to include sites contaminated by petroleum products.

Action Requested: Although a permanent extension of the law would be preferable, NAA/NMHC urge favorable action early in 2006 on the pending two-year extension/expansion legislation. Any new law should be applied retroactively to Dec. 31, 2005.

Depreciation

NAA/NMHC Position: NAA/NMHC support further studies in conjunction with Congress and the U.S. Treasury. Department to ascertain a more accurate estimate of the composite useful life of an apartment community.

Background: Current tax law allows apartment communities to be depreciated over a 27.5-year period, but a 2000 study by NAA/NMHC suggests that may be too long. The research showed the true useful life of an apartment community is probably closer to 20 to 25 years. In spring 2001, the U.S. Treasury Department released its initial report on depreciation and called for further study. To date, no further study has been undertaken.

Action Requested: The U.S. Treasury, Department should reinvigorate its study of useful depreciation lives so tax law will reflect economic reality.

Environment

The 109th Congress is expected to consider several environmental issues with significant implications for the real estate industry. Methamphetamine legislation is a priority, as well as issues related to indoor air quality, to addition, the apartment industry continues to face new regulatory requirements from previously enacted laws in the areas of wetlands, endangered species and brownfields. NAA/NMHC will be closely monitoring both the regulatory and legislative developments that significantly affect apartment owners, managers and developers.

Indoor Air Quality

NAA/NMHC Position: NAA/NMHC continue to work at both state and federal levels to advance a legislative agenda on indoor air quality that is both reasonable and based on sound science.

Background: Indoor air quality (IAQ) can be adversely affected by numerous factors including moisture, mold, pesticides and off-gassing of common household chemicals and building materials. Although there has been much speculation about the health effects of IAQ, it is a largely unsettled matter as to which substances, and at what levels, pose a threat to human health.

The continued increase in the number of children with asthma serves to focus lawmakers' attention on the matter of indoor air quality. Legislation that would fund federal research into the causal relationship between IAQ and asthma, allergies and respiratory problems has been introduced in both the House and Senate, but has not passed out of the relevant Congressional committees. Additionally, a National Academy of Sciences (NAS) study on Damp Indoor Spaces made several specific recommendations regarding the built-environment for federal agencies, including HUD and the U.S. Department of Energy, that have yet to be implemented.

Action Requested: Congress should direct federal agencies to incorporate the recommendations of the NAS Report on Damp Indoor Spaces into their research agendas on indoor air quality. In addition, given the current scientific uncertainty and question about the effect of mold on health, NAA/NMHC urge that Congress not allow funds to be used by any federal agency to establish mold exposure guidelines in housing (including federally owned and assisted housing) until such time as EPA and the Centers for Disease Control and Prevention or other federal agencies, as necessary, carry out the research needed to fill gaps and answer questions identified by NAS.

Energy and Energy Efficient Credits

NAA/NMHC Position: NAA/NMHC support the passage of energy legislation that contains, among other things, tax credits and incentives to encourage the use of energy efficient building technologies, renewable energy sources and conservation measures by apartment owners. NAA/NMHC are concerned about federal policies that have stressed an over-reliance on natural gas for new power plants without the concomitant development of increased gas resources or demand-side management.

Background: Although Congress passed the Energy Policy Act in 2005, that measure did not fully address issues of concern to NAA/NMHC. While the measure did include tax incentives to spur property owners to incorporate energy-efficient building technologies, renewable energy sources and conservation measures into use on their properties, these incentives are severely constrained and will be difficult to obtain as a practical matter. As a matter of national security and sustainability, energy-efficient building technology incentives are critical to the multifamily housing industry. Escalating prices for oil and natural gas have contributed to highly volatile utility pricing on apartment communities. Supply and demand fundamentals are expected to keel) prices high on these commodities for the foreseeable future.

Action Requested: NAA/NMHC support the passage of an energy bill that contains tax incentives for both energy-efficient renovation and construction of apartment communities and the installation of water submetering devices in apartment communities. With respect to natural gas, NAA/NMHC support a balanced approach that would increase natural gas supplies while reducing demand through conservation and energy-efficiency programs. NAA/NMHC also support funding to demonstrate alternate energy technologies that can be used on apartment communities.

Lead Hazards

NAA/NMHC Position: NAA/NMHC fully support the federal policy of eliminating childhood lead poisoning by 2010 and urge a comprehensive approach to dealing with lead hazards throughout the environment and strongly urge that governmental resources be targeted toward incentives to eliminate lead hazards wherever they exist.

Background: NAA/NMHC encourage their memberships to provide residents with a healthy living environment, free from the hazards associated with lead-based paint. Regrettably, there is a significant amount of lead present in the general environment that is not associated with paint and thus not under the control of the property owner. Such lead presence is instead due to past automotive and industrial emissions and other more insidious sources, such as consumer products ranging from candles to dishware and crayons to chalk. Each of these sources presents a potential lead-poisoning threat to children.

Sen. Hillary Clinton (D-N.Y.) has introduced a bill that would amend the Internal Revenue Code of 1986 to provide a tax credit worth 50 percent of the costs of reducing lead hazards. Eligible communities could claim a credit for both lead abatement costs and the cost of interim lead control measures. As written, however, the credit is only available to low-income communities and has certain other limiting factors. An identical bill, introduced by Rep. Ray LaHood (R-Ill.), is pending in the House of Representatives.

Action Requested: Congress should enact legislation that allows for expensing of lead remediation and removal activities for all rental properties, not just those serving low-income residents.

Methamphetamine

NAA/NMHC Position: NAA/NMHC support measures that aid property owners in preventing, identifying and remediating clandestine methamphetamine (meth) labs.

Background: The manufacture of illicit meth in makeshift, clandestine laboratories is of growing concern to the apartment industry. Even after a laboratory is abandoned, the resulting property contamination can have health, safety and financial effects resulting from the presence of hazardous manufacturing byproducts and residual production chemicals. There are currently no federal statutes requiring the remediation of meth labs and no standards to guide property owners in decontamination efforts. While states mandate the cleanup of meth-contaminated properties, few have developed operational cleanup standards that define contamination levels and appropriate remediation methods. Moreover, it is well recognized that difficulties exist in testing for and evaluating meth-related chemicals and their health effects are largely unknown. Therefore, the established standards are not directly related to scientific or medical findings.

Rep. Bart Gordon (D-Tenn.) introduced legislation (HR 798) that would direct the EPA to develop testing and remediation guidelines in cooperation with the National Institute of Standards and Technology. It would also require the National Academy of Sciences to conduct research on the potential health effects of residual meth exposure. NAA/NMHC submitted written testimony in favor of this bill, which subsequently passed the House and is pending in the Senate.

Action Requested: Congress should enact legislation directing the relevant federal agencies to develop uniform guidelines and decontamination practices for meth labs that promote health and safety.

Finance

Given the capital-intensive nature of the apartment industry, finance remains one of NAA/NMHC's most important issues. The current success of the multifamily debt and equity markets underscores both the legacy of federal housing finance programs, as well as their continuing importance to the apartment sector.

NAA/NMHC will continue to work toward establishing a wider availability of capital for all phases of apartment activity--new construction, refinancing, rehabilitation and sale. NAA/NMHC will also continue to work to improve the efficacy of financing programs that produce high-quality rental housing for everyone from lower-income families to the millions of moderate-income families not eligible for government subsidy, but nevertheless struggling to cover their cost of housing.

Regulatory Oversight of Fannie Mae and Freddie Mac 

NAA/NMHC Position: NAA/NMHC support sound financial and affordable housing regulatory oversight of the government sponsored enterprises (GSE). NAA/NMHC support legislation that would create a single regulator with the appropriate authority to manage systemic risk based on evaluation of investments, capital reserves and holdings. NAA/NMHC do not support statutory conditions restricting the activities that the agencies can engage in regarding portfolio investments.

Background: Congress is moving closer to establishing a new regulator for Fannie Mae and Freddie Mac. On Oct. 26, 2005, the House of Representatives passed the Federal Housing Finance Reform Act (HR 1461) by a vote of 331-90. The House action included extensive floor debate in an ultimately unsuccessful attempt to alter the bill so it more closely aligned with the Senate version (S 190) that passed the Senate Banking, Housing and Urban Affairs Committee on July 28 but has yet to be considered by the full Senate. The two key differences between the House and the Senate bills are: (1) the Senate bill places severe restrictions on the multifamily mortgages eligible to be held in the GSEs' portfolio; and (2) the House bill includes a provision that would require the GSEs to contribute 5 percent of their after-tax profits to a low-income housing fund. (That controversial provision was revised during the House debate to give priority to hurricane victims and to ban funding for nonprofit groups that engage in election activities, including voter registration.) Because of these significant differences, no final action was taken on the measure in 2005.

NAA/NMHC oppose the Senate bill because of the severe restrictions it places on the GSEs' ability to hold multifamily mortgages in their portfolios. In NAA/NMHC's view, this would be overwhelmingly damaging to the multifamily housing industry and could lead to higher-cost loans, less flexible loan terms and a reduction in their conventional lending. NAA/NMHC are also concerned that the Senate language would limit investments in multifamily mortgage revenue bonds and Low-Income Housing Tax Credits. The Senate bill also eliminates a provision from the House measure that would require the GSEs to contribute 5 percent of their after-tax profits to a low-income housing fund.

Action Requested: NAA/NMHC urge Congress to establish a strong regulator without specific requirements about the type of investments that can be held in portfolio.

Utility Adjustments for Tax Credit Properties

NAA/NMHC Position: NAA/NMHC strongly advocate changing Section 42 of the Internal Revenue Code to create alternative methods for establishing utility allowances for Low-Income Housing Tax Credit (LIHTC) properties.

Background: Internal Revenue Service (IRS) rules require rents at LIHTC properties to include a utility allowance for resident-paid utilities. However; the methods currently used to estimate those costs tend to overestimate actual resident utility cost, which, in turn, reduces the gross rant received by property owners.

The two methods allowed under current law are: (1) local public housing authority (PHA) utility estimates: or (2) local utility company cost estimates. The PHA allowances, which are based on older public housing properties, have little correlation with utility costs for newer, more energy-efficient tax credit properties. Utility company data, on the other hand, is generally difficult to obtain.

In recent years, HUD, state housing authorities and property owners and developers have developed more accurate utility charges based on consumption and utility rates at the local and property, level. But IRS regulations governing the LIHTC program do not allow use of these alternatives.

NAA/NMHC created an industry coalition to seek appropriate changes. After an exhaustive evaluation of all the alternative methods and practices available to estimate utility costs, a proposal to expand the allowable methods was submitted to the IRS.

The proposal retains the two existing options but recommends adding a new option to allow property owners to use energy consumption models and estimates based on consumption data that reflects current building design standards, materials, appliances and fixtures.

Action Requested: NAA/NMHC urge the IRS to quickly adopt the industry proposal on alternative procedures to estimate LIHTC utility allowances.

FHA Multifamily Mortgage Insurance Program

NAA/NMHC Position: NAA/NMHC support the Federal Housing Authority (FHA) multifamily insurance program as a critical source of funding for the production of "affordable rental housing. NAA/NMHC seek additional program changes to make it more competitive with the private market.

Background: The FHA multifamily insurance program provides necessary funding for affordable rental housing production. However, the program is complex and time consuming compared to conventional financing programs. As a result, it has failed to attract the interest of the broader apartment sector:

Both HUD and Congress have implemented several changes to improve the program, including raising per-unit loan limits, providing for higher limits in high-cost areas and reducing the insurance premium to its lowest level in two decades.

HUD has also taken great strides to improve the FHA program through its multifamily accelerated processing (MAP) program. While beneficial, these changes have not been enough to attract broader use of the program by apartment firms. To compete with the private market, the program must be more uniform in its administration and more competitive with the private market.

Some NAA/NMHC members report it can take two to three times more at-risk capital to secure an FHA loan compared to conventional financing. To secure FHA approval, a developer must provide a complete development plan with certified costs of development (i.e., contractor bids awarded or approved). The cost associated with control of the property (title, taxes, insurance), maintaining contractor bids over an extended and sometimes uncertain period, changes in underwriting throughout the loan approval process and the effect of fluctuating interest rates create a significant burden to a developer prior to final HUD approval. Many times, the risk undertaken far outweighs the reward.

Action Requested: NAA/NMHC urge HUD to further modify the FHA multifamily insurance program to reduce the amount capital developers are required to put at risk to obtain HUD-insured financing.

Building Codes

The nation's model building codes and standards have a significant effect on the cost of housing and, ultimately, on the supply of homes within reach of working families. NAA/NMHC work closely with model code and standard setting organizations to produce packages that allow apartment developers to build affordable housing without reducing the basic requirements for life safety.

In 2000, the three major building code organizations joined under the auspices of the International Code Council (ICC) to create a single set of international model codes. Prior to that, each local jurisdiction could choose to adopt one of the three existing model codes, which meant there was no single standard for construction across the country. With the publication of the first set of ICC codes in 2000, there was finally a single set of codes for the entire country designed to work together. NAA/NMHC strongly support local adoption of the ICC codes over competing codes.

NAA/NMHC have been involved in the code development process for more than 14 years, and through their actions have saved more than $4,200 per new apartment unit by keeping out unnecessary and redundant provisions.

ICC Model Codes

NAA/NMHC Position: NAA/NMHC support the adoption of the model codes developed and published by ICC over any other set of model codes.

Background: Created by the merger of the three model code organizations, ICC has more than 190 years of collective experience in code writing. The ICC model codes, developed with input from code officials and industry, have proved to be a complete, comprehensive and coordinated set of codes that allow the apartment industry to build cost-effective, safe, affordable and accessible housing.

In addition to being the only set of model codes developed and published by a single organization, the 2000 IBC with the 2001 amendments and the 2003 IBC are the only model codes with the "Safe Harbor" designation for compliance with HUD Fair Housing Act Accessibility Guidelines (FHAAG).

The competing NFPA 5000-2006 code is incomplete, unenforceable and technically unsound. It includes permissive language that does not specifically state basic code requirements, and it includes conflicts that do not clearly differentiate between prescriptive design requirements, performance design requirements and the intent of the code to base requirements on the specific occupancy. Action Requested: NAA/NMHC strongly urge local jurisdictions to adopt the full package of ICC construction codes and to reject the NFPA 5000 as a possible competitor. Although amendments made during the local adoption process may be necessary to respond to specific local conditions, NAA/NMHC discourage all unnecessary local amendments.

NAA/NMHC further urge localities not to "mix and match" codes, such as adopting the ICC's International Building Code (IBC) but then adopting the NFPA Uniform Fire Code (NFPA 1) in lieu of the ICC's International Fire Code. Not only do some of the code provisions contradict each other, but the dual adoption unnecessarily raises construction costs.

NAA/NMHC further urge local jurisdictions not to adopt the NFPA Life Safety Code (NFPA 101) for anything other than medical occupancies because the code has requirements for existing apartments that are not aligned with the requirements in the IBC.

Non-Metallic Sheathed Cable

NAA/NMHC Position: NAA/NMHC strongly support the cost-effective, safe electrical wiring provisions in the 2003 and 2006 ICC codes and the 2002 and 2005 National Electrical Code. NAA/NMHC oppose any modifications to those provisions that raise costs without supporting technical justification.

Background: For more than 14 years, NAA/NMHC have advocated widespread use of non-metallic sheathed cable (NM cable, also referred to as Romex) in all buildings regardless of building height. Earlier code requirements limited NM wiring to buildings with three or fewer stories--a costly and unjustified restriction.

During the 2001 code development cycle, the ICC removed all height limitations on the use of NM cable from its International Building Code (IBC). In addition, the 2002 National Electrical Code, published by the NFPA, revised its restriction to allow the NM cable in apartments up to five stories in height. The 2005 NEC retains these changes.

Expanded use of NM cable saves apartment developers $50 million in annual construction costs, without compromising life safety. These savings allow apartment developers to construct new apartments and replace old housing in areas where they previously would not have been able to compete economically.

Action Requested: Local jurisdictions are urged to adopt the 2006 ICC codes and the 2002 and 2005 NEC without any local amendments restricting the use of NM wiring.

Accessibility

NAA/NMHC Position: NAA/NMHC support accessible building code provisions that are compatible with the provisions of the Americans with Disabilities Act and the Fair Housing Act. NAA/NMHC support the "Safe Harbor" designation by HUD for the 2000 IBC with the 2001 amendments and the 2003 IBC, and encourages HUD to extend the designation to the 2006 IBC. NAA/NMHC also support the U.S. Architectural & Transportation Barriers Compliance (Access) Board's efforts to align the federal accessibility provisions with those contained in the model codes. NAA/NMHC further encourage the Access Board to accept the American National Standard, ANSI Al 17.1, 2003 Accessible and Usable Buildings and Facilities standard as the basis for accessibility technical requirements.

Background: HUD's acceptance of the ICC/ANSI Al 17.198 accessibility standard and the 2000 IBC with the 2001 amendments and the 2000 Code Requirements for Housing Accessibility (CRHA) as a safe harbor under HUD's FHAAG is a major step forward in the development of a single set of national accessibility standards. This, however, is only the first step because it is also necessary to secure DOJ's involvement and determination on the building code provisions designed to be in compliance with the Americans with Disabilities Act Accessibility Guidelines (ADAAG). NAA/NMHC's direct participation in the development of code provisions meeting the FHAAG provisions and their successful advocacy of mandatory language in the HUD appropriations bill were pivotal in spurring HUD's review of the model codes. NAA/NMHC will continue to work with all parties interested in obtaining DOJ's approval.

Action Requested: NAA/NMHC members support the adoption of the accessibility provisions in the 2006 ICC codes.

Please visit www.naahq.org for details about the 2006 NAA Capitol Conference.