Apartment Organizations Release 2001 Legislative Priorities.

Housing Policy, Telecommunications, Tax Reform and Energy Policy Top the Agenda

NAA/NMHC released their annual public policy agenda during NAA's March 10-13 Capitol Conference. Top on the associations' 2001 agenda are: the need for a more balanced housing policy, tax reform, telecommunications and the nation's growing energy crisis.

"Our primary message to federal policy makers in the coming year will be the need for a smarter, more balanced housing policy; one that questions the conventional wisdom and better reflects the changing needs and preferences of our citizens," according to Clarine Nardi Riddle, NAA/ NMHC Senior Vice President for Government Affairs.

"For several years now we have documented the growing `renter by choice' trend--households opting to rent even though they could afford to buy. These households include empty nesters and young professionals looking for everything from shorter commutes to more amenities and financial freedom. But despite the fact that nearly 40 percent of renters surveyed by Fannie Mae in 2000 said that buying a home was not an important priority, our federal housing policy continues to focus almost exclusively on homeownership. This outdated approach to housing policy represents a missed opportunity. It overlooks the need for apartments to help solve several modern-day problems, including suburban sprawl, urban decay, the affordable housing crisis and even the housing of our aging parents."

"We have crafted five key principles of a balanced housing policy, and we will be using our discussions with policymakers as an opportunity to reinforce these policy principles and educate them on important changes underway in the population at large and in the apartment industry. And we will continue our ongoing effort to urge policymakers to support a more reasonable regulatory framework for housing that does not reduce housing choice, jeopardize the health of the apartment industry or further erode the already inadequate sup-ply of affordable housing."

NAA/NMHC have an extensive legislative and regulatory agenda in 2001, with telecommunications, tax reform, energy policy and the need for market-based reforms in the Section 8 program figuring prominently.

Telecommunications Access

NAA/NMHC will continue to oppose certain for-profit telecommunications firms seeking authority to enter apartment properties and permanently occupy space both within the building and on rooftops without the prior consent of the apartment owner. As a part of the Real Access Alliance, a coalition of l 1 national real estate trade groups, NAA/NMHC will vigorously oppose efforts to legislate forced access. The free market is already working to ensure resident access to advanced telecommunications services, and forced-access approaches more often than not result in higher prices and less competition. Such legislation also seriously erodes constitutionally protected property rights.

Capital Gains and Depreciation Recapture 

Present federal tax laws discourage investment in new apartment properties and modernization of older apartment communities. The combination of: (1) the existing capital gains taxes; (2) a depreciation recapture rate of 25 percent; and (3) a composite depreciation life of 27.5 years for new and used apartment investment have led to a steady decline in the number of apartments available to meet the nation's housing demand. NAA/ NMHC will strongly support tax legislation which decreases both capital gains taxes and depreciation recapture rates. We will also urge reforms in the present depreciation law, which is too long and does not reflect economic reality.

Energy Policy

As the nation confronts an ever expanding energy crisis, NAMNMHC will urge Congress to develop a comprehensive national strategy for addressing energy needs. Specifically, we will support federal electricity deregulation legislation; increased funding for research on energy efficient building technologies; expanded tax incentives to encourage the use of such technologies; and tax relief for energy conservation actions by private property owners.

Section 8 Housing Choice Voucher Reform

The United States faces a critical shortage of affordable housing, yet one of the most effective tools available to the U.S. Department of Housing and Urban Development (HUD) suffers from inefficiencies that compromise the program's success. The current administration of the resident-based Section 8 "Housing Choice Voucher" program creates significant risks and costs for private owners who agree to accept the vouchers. NAA/NMHC will continue their efforts to work with both HUD and Congress to streamline the program and to clarify the voluntary nature of the Section 8 program in order to encourage more private sector participation in the program.

In addition to its legislative and regulatory effort, in 2001 NAA/NMHC's public relations program will continue its work to: (1) improve the image of the apartment industry among legislators and consumers; (2) focus national attention on the lifestyle and financial benefits of renting; and (3) highlight the importance of apartments to the national smart growth movement.

A copy of the 2001 NAA/NMHC Legislative and Regulatory Priorities is available on the NMHC homepage at www.nmhc.org/joint/legregpr/ default.html.

Fair Housing

NAA/NMHC is leading a coalition of rental housing organizations that has asked HUD Secretary Mel Martinez to reconsider pending regulations that would significantly expand housing providers' liability for sexual harassment under the Fair Housing Act. The proposed rule was released under Secretary Cuomo's administration and would permit wait-listed applicants who experienced no actual harassment to sue housing providers. It would also make providers liable for activities occurring near their properties even if they had no actual knowledge of them. As drafted, the rule would expand the definition of what constitutes actionable sexual harassment beyond the current definition used in the employment context. Both in a Jan. 11, 2001, comment letter to HUD and in this most recent coalition letter to Martinez, NAA/NMHC have urged HUD to wait for specific direction from Congress before acting in this very sensitive area. Copies of both letters are available by contacting NAA at 703/518-6141, Ext. 118 or via email at [e-mail].

Apartment Fees

The California Supreme Court has upheld a Los Angeles city $1 a month/per-unit inspection fee imposed on apartment owners. (Apartment Association of Los Angeles County Inc. v. City of Los Angeles, No. 2082645, 2001 WL 13303, Jan. 8, 2001.) The City Council approved the fee in 1998 to enhance code enforcement efforts. Apartment owners sued the city and won a lower court ruling on the grounds that the fee violated a state constitutional restriction on taxes, fees or charges levied on property or property owners without voter approval. The Supreme Court overturned that earlier decision, however, saying that the fee is more like a licensing fee than a charge against property. The court reasoned that once a property is no longer rented, the fee cannot be charged. More than 90 California cities supported Los Angeles in the case, suggesting that other jurisdictions may adopt similar fee programs in the future.

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 Building Codes Ron Nickson; and Chief Economist Vice President of Research.