Federal telemarketing rules create new responsibility for apartment companies. (Capitol Beat).

The Federal Trade Commission (FTC) has amended its Telemarketing Sales Rule (16 CFR 310) to address the national "do not call" registry that launched in July. Apartment companies should note that they are potentially liable for any errors made by telemarketers working on their behalf because telemarketers will be required to identify their client each time they access the registry.

Consumers may begin registering in July; beginning in September, telemarketers must scrub their call lists against the national "do not call" registry at least every 90 days. The revised rule also includes new provisions restricting call abandonment, requiring telemarketers to transmit caller ID information and cracking down on unauthorized billing. FTC and state enforcement begins in October. A detailed explanation of the amendments is posted at www.ftc.gov/bcp/conline/pubs/ buspubs/calling.htm.

Lobbying Against Mailboxes Continues

NAA/NMHC continue to lobby against a U.S. Postal Service (USPS) effort to require existing apartment mailboxes to be retrofitted to conform to a proposed new standard. Specifically, USPS proposes to increase the minimum size for all apartment mailboxes by approximately 25 percent. USPS said the larger mailboxes are needed to accommodate growing mail volume and to improve mail security.

On June 19, NA/VNMHC presented the results of an NAA/NMHC survey, showing that the cost to retrofit mailboxes could reach $2 billion. NAA/NMHC's survey also refutes the need for improved mail security. NAA/NMHC will continue to work with the Committee to aggressively advocate for cost-effective measures that will not adversely affect apartment firms or residents. In addition to opposing any retrofitting requirements, NAA/NMHC also are urging a reasonable transition period and a waiver/exemption process for new construction where the new standard would be prohibitively expensive or restricted by space limitations.

NAA/NMHC Opposes Section 8 'Block Grant'

NAA/NMHC continue to oppose a Bush Administration plan to "block grant" the Section 8 voucher program.

On July 1, the House Committee on Financial Services sponsored a regional panel on the proposal in Los Angeles where NAA President Thomas Shelton, CAPS, CPM, of Greystar Real Estate Partners, testified.

On June 10, Andrew Showe, Vice President of Showe Management Corp., testified against the plan before the U.S. House of Representatives on NAA/NMHC's behalf.

Shelton and Showe encouraged the legislators to reform the existing Section 8 program and outlined numerous specific reforms that would make the program more attractive to the private sector.

(See p. 34 in this issue of Units.)

Mold Class Action Suit

On May 28, an NAA/NMHC-led coalition, which includes the U.S. Chamber of Commerce and numerous other real estate organizations, filed a friend of the court brief in a class action suit seeking mold-related damages from a rental housing provider (Archstone-Smith Operating Trust v. Rachel J. Henriques, Case No. 3D03403, 3rd District Court of Appeals of Florida).

The case is especially disturbing because it includes as potential plaintiffs not just the residents, but also any property guest and visitor regardless of how long they stayed. The brief argues that class actions are not a fair means of resolving mold-related claims, largely because the question of whether an individual's symptoms are allegedly caused by mold exposure from an apartment property cannot be resolved without a detailed examination of individualized facts. Class certification also deprives the property owners of their due process right to defend against the claims and to pursue alternative theories of causation and contributory negligence. It also creates a composite plaintiff with potentially stronger claims than any particular individual member of the class. NAA/NMHC are encouraged by the fact that the case is pending before the same court that recently decertified a $145 billion class action tobacco verdict after ruling that each class member had "unique and different experiences" that would require individual litigation.

Rent Control Extended, Not Expanded

On June 20, the New York State legislature approved a measure extending the state law controlling rents in New York City for another eight years. The vote marks a significant victory for the Community Housing Improvement Program and the Real Estate Board of New York, which worked with NAA/NMHC to defeat a proposal that would have dramatically expanded the number of apartments subject to rent control. Current law, and the newly extended version, allows vacated apartments that rent for at least $2,000 to escape rent control.

The extension occurred despite new research condemning rent control. A new study by Massachusetts Institute of Technology (MIT) examines how ending rent control in Cambridge, Mass., led to a surge in new apartment investment. The report, Rent Control and Housing Investment: Evidence from Deregulation in Cambridge, Massachusetts, found that investment in the city increased approximately 20 percent, and that both affluent and modest income neighborhoods experienced an "investment boom." Because Cambridge's housing stock is very similar to that in New York City, the study, which is posted at www.manhattan-institute, org/html/cr 36.htm, suggests that New York City's housing quality would increase similarly if the city's rent control policies were not renewed when they expired.

Anti-Trespassing Law Upheld

On June 16, the U.S. Supreme Court unanimously upheld an anti-trespassing law adopted by the Richmond, Va., Redevelopment and Housing Authority to try to reduce crime in public housing (Commonwealth of Virginia v. Kevin L. Hicks, No. 02-3 71).

The law, which bans unauthorized visitors without a "legitimate business or social purpose" from the streets, sidewalks and lawns of public housing properties, may be a model for similar visitor policies in rental housing generally. The U.S. Supreme Court ruling reversed an earlier ruling by the Virginia Supreme Court saying the law violated the First Amendment. The U.S. Supreme Court said the anti-trespassing law is a valid means of trying to reduce violent crime in public housing and does not unconstitutionally limit free speech. It did note, however, that the law's application in some specific cases could still face First Amendment challenges. The full ruling is available at www.supremecourtus.gov/opinions/02pdf/ 02-371.pdf.

Homeownership Tax Credit Update

Legislation pending in Congress would give low- and moderate-income first-time homebuyers a one-time tax credit that they could use to help with a down payment or for closing costs. Unlike other homeownership-related tax provisions that require recipients to wait until they file their taxes to benefit, this proposed credit would allow recipients to transfer the credit to the lender at closing in order to benefit immediately.

The credit would be limited to those with income under $67,000 for singles and $112,850 for married couples. The measure's sponsors estimate the credit could help 17 million households purchase a home in a seven-year period.

NAA/NMHC continue to question policy-makers whether this tax credit should be enacted in view of the large budget deficit and the need for a more balanced housing policy that includes rental housing in the equation.

Meanwhile, Congressional appetite for new homeownership initiatives is not unlimited. Despite strong support from the National Association of Home Builders and others, legislators eliminated a provision from the recent tax cut measure (P.L. 108-27) that would have allowed homeowners to deduct the cost of mortgage insurance from their income taxes.

Fair Credit Reporting Act Testimony

Julie Smith, President of Bozzuto Management Go., testified on NAA/NMHC's behalf on June 4 to urge the U.S. House of Representatives to extend the soon-to-expire state law preemptions contained in the Fair Credit Reporting Act (FCRA).

Without these preemptions, companies which operate in several states could be forced to comply with a patchwork of different requirements concerning adverse action notices, the content of consumer credit reports, and apartment firms' obligations to furnish or investigate information provided to reporting agencies.

Earlier hearings in both the House and Senate made specific references to the rental housing industry and the challenges consumers face in obtaining a lease due to discrepancies in consumer reports. As Congress considers whether to extend the preemption, several legislators say they want to use the FCRA reauthorization process also to strengthen consumer privacy laws. In response, NAA/NMHC testimony voiced support for new uniform national standards to address identity theft concerns. NAA/NMHC testimony is available at www.naahq.org/ government/issues.aspx.

Compiled by NAA/NMHC Joint Legislative Staff. Senior Vice President for Government Affairs Jim Arbury; Vice President of Finance and Technology David Cardwell; Vice President of Communications Kim Duty; Vice President of Property Management Jay Harris; Vice President of Environment Eileen Lee; Tax Advisor Howard Menell; Vice President of Building Codes Ron Nickson; and Mark Obrinsk3 Chief Economist and Vice President of Research. NAA PAC State Ambassador Profile Cynthia Lucas, CPM, Jacksonville, Fla.