Apartment Leaders Meet with Federal Reserve Chairman.

Apartment leaders, including NAA President James P. Hepfner, CAPS, CPM; NAA President-Elect Phil Carlock, CAPS, CPM; NAA Executive Vice President Doug Culkin, CAE, CIC; and NMHC's Executive Committee recently met with Federal Reserve Chairman Alan Greenspan. NMHC Chairman Leonard Wood began the wide-ranging discussion, held in the Fed's boardroom, by briefing Chairman Greenspan on current conditions in the apartment market. Other issues discussed during the hour-long meeting included rising oil prices; the impact of mergers and acquisitions within the financial services industry; and loan underwriting and capital adequacy standards.

HUD's accessibility review finally released

The U. S. Department of Housing and Urban Development (HUD) recently released its long-awaited review of the accessible design features in the model building codes for conformity with the Fair Housing Act's accessible design requirements. NAA/ NMHC have been urging HUD to eliminate the confusion associated with the Fair Housing Act Accessibility Guidelines since they were first published in 1991.

In 1997, NAA/NMHC and the model building code groups jump-started HUD's review by submitting to HUD a technical matrix comparing the federal requirements with the model codes. When HUD failed to take action, an NAA/ NMHC-led coalition worked with Rep. David Price (D-NC) to include language in HUD's FY 2000 funding bill requiring HUD to expedite the process. The now-completed HUD review will help create a safe harbor design standard for apartment practitioners and reduce the degree of inadvertent noncompliance. HUD's report specifically identifies where the building codes do not meet the Fair Housing Act design and construction requirements.

It is expected that the International Code Council (ICC) will propose revisions to the new International Building Code (IBC) that would bring the IBC up to the level where it meets or exceeds the Fair Housing Act requirements in all areas. The goal now is to have an ICC- and HUD-approved Appendix to the IBC completed by 2001.

New wetlands regulations issued

The U.S. Army Corps of Engineers published final regulations (65 FR 12818) which will terminate developers' use of a streamlined "nationwide permit" process for most construction by requiring specific permits for each project that could affect a half-acre of wetlands or more, down from the current minimum of three acres.

NAA/NMHC expressed serious concerns over the new regulations when they were first proposed three years ago, noting that individual permits take five times as long to process and that the Army Corps' cannot maintain its present permit approval times with its current resources. Congress has instructed the Corps to investigate the workload and cost implications of the new wetlands regulations. NAA/NMHC will continue to work to promote reasonable wetlands permitting requirements. The final regulations go into effect on June 5, and are available online at http://frwebgate.access.gpo.gov/ cgi-bin/getdoc.cgi?dbname=2000_register&docid=fr09mr00-188.

Fair housing actions

Responding to ongoing encouragement by NAA/ NMHC, and more recently by Congressional appropriators, HUD has announced its plans to improve compliance with the Fair Housing Act's accessibility provisions by increasing the education and technical assistance it provides to the building community. In a March 1 letter to House Appropriations Committee Chair Bill Young (R-FL), HUD disclosed that, for the first time, it will make itself available "to provide technical assistance and plan reviews of multifamily housing projects." The agency is also considering creating an interactive Web site on the topic, increasing education directed at architects, working with industry organizations to promote accessibility seminar materials, and educating tax credit developers of their accessible design obligations under the Fair Housing Act. AIMS members can obtain a copy of the letter by calling Amy Tubbs at NAA at 703/518-6141 x127 or email at [e-mail].

Courts rule on FDCPA and "Megan's Law"

The Sixth Circuit Court of Appeals has held that outside attorneys are not debt collectors under the Fair Debt Collection Practices Act (FDCPA) when they are collecting a debt on a client's behalf and debt collection is not the attorney's regular activity. (Schroyer v. Frankel, 197 F.3d 1170, Dec. 2, 1999.) In a decision that could be applicable to rental housing providers and agents acting in their behalf, the federal appeals court held that:

* only two percent of the attorneys' case load involved debt collection;

* most of those collections were on behalf of regular business clients whom they represented in a variety of legal matters;

* none of those business clients had frequent or ongoing debt collection activities, the attorneys were not subject to the FDCPA as they were not "regularly engaged in debt collection activities."

In an important case of first impression, a New Jersey Superior Court judge ruled that a property owners' association can prohibit owners from selling or leasing property to certain sex offenders registered under Megan's Law (Mulligan v. Panther Valley Property Owners Association, No. L-188-99, N.J. Super. Ct. (Warren County), Nov. 12, 1999.) In finding that the association's interest in preserving the community's safety outweighs the negligible impact the regulation has on a homeowner's ability to sell or lease the property, the ruling lends additional weight to rental housing providers who enact policies refusing to rent to applicants listed on the state's sex offender registry.

Affordable housing initiatives

Responding to a new report that the Federal Housing Administration (FHA) has generated a $5 billion surplus above previous estimates, President Clinton has directed the HUD Secretary, Office of Management and Budget Director and Domestic Policy Council Director to make recommendations on using the newly available funds to expand "affordable housing opportunities."

Recommendations could include subsidizing the new affordable rental housing construction, downpayment assistance to increase homeownership, new rental assistance vouchers and other initiatives. HUD Secretary Andrew Cuomo has indicated his preference is for new production. Rep. Rick Lazio (R-NY), chairman of the House Housing and Community Opportunity Subcommittee, has asked the U.S. General Accounting Office and the Congressional Budget Office to determine the accuracy of the FHA audit.

Affordable housing increase proposed

HUD recently published proposed regulations (65 FR 12632) that would raise the annual affordable housing goals for Fannie Mae and Freddie Mac from 42 percent of their total mortgages purchased to 48 percent in 2000 and 50 percent in 2001. Among other things, the rule would increase the percent of multifamily mortgage purchases required from 0.8 percent of 1994 volume to one percent of 1998 volume for 2001-2003. Bonus points would be awarded to both corporations for financing small multifamily properties (from five to 50 apartment homes). Freddie Mac would receive additional credit for financing properties with more than 50 apartment homes. Actions taken that maintain the affordability of expiring Section 8 units would also receive credit under the housing goals. Fannie Mae also announced a 10-year, $2 trillion homeownership and affordable housing initiative, which includes $175 billion for multifamily investments. The Fannie Mae program will also seek to expand the market in financing small multifamily properties with up to 50 apartment homes by investing $18 billion in these mortgages.

Information compiled by NAA/NMHC Joint Legislative Staff: Senior Vice President Clarine Nardi Riddle; Vice President of Tax Jim Arbury; Vice President of Communications Kim Duty; Vice President of Property Management Jay Harris; Vice President of Environment Eileen Lee; Vice President of Housing and Finance Stephen Lefkovits; and Vice President of Building Codes Ron Nickson.