REBNY records vital victories in 1993.

In 1993, government activity at federal, state and municipal levels all affected New York's real estate industry. The Real Estate Board worked on Capitol Hill, in Albany and at City Hall to serve its membership's interests.

In Washington, some of the 1986 tax act's errors were corrected as a result of REBNY's collaboration with the National Realty Committee and other allies.

Here are some recent features of that recent tax bill:

* Qualified individuals can deduct "passive" losses incurred from rental activities against all income.

* Individuals may defer from income the discharge of qualified real property indebtedness, but must reduce the tax basis of the depreciable property by the amount of the sum discharged. This measure will help owners to restructure their debts, and make it unnecessary for lenders to take on management of these properties, or write off a host of loans.

* The automatic restriction on Unrelated Business Taxable Income that pertained to pension funds and other non-profits regarding public traded partnerships was abolished, enabling such entities to participate in real estate investment trusts. In addition, gains from foreclosed property acquired from lending institutions are no longer subject to the tax.

* The low income housing tax credit has been permanently extended, generally speaking, retroactive to June 30, 1993.

These changes vastly revise real estate investors' horizons, and should liberate capital to renovate the existing stock and, eventually, enhance prospects for new construction to meet demand.

Another important stride in Washington was a law exempting New York City from a 1992 requirement that sprinklers be installed in all housing with any federal financing or insurance. The new law stipulates that sprinklers are not needed if "an equivalent level of safety" is achieved. Local codes satisfy that standard. The National Multi Housing Council was an ally in this effort and U.S. Senator Alfonse D'Amato and Representative Charles Schumer of the New York Congressional delegation provided leadership on the matter.

At the state level, REBNY succeeded in defending real estate brokers' rights to practice their profession effectively and serve their clients well. Buyers and sellers were relieved of vicarious liability for actions taken by brokers' agents if they authorize their brokers to engage such service providers. REBNY's efforts also spared brokers from having to disclose immaterial facts, and to give buyers detailed state-prepared forms to be filled out by the seller. In addition, the Real Estate Board also convinced the Department of State to revise educational requirments so that licensees must take 22-and-a-half hours of instruction every two years, a schedule which more closely tracks the license renewal cycle.

Reforms in the state gains tax's administration obtained by the Board ensure that this levy's calculation will be based more accurately on true economic gain. The other improvements we won include the following:

* "Consideration" on transfer of a troubled property is defined as its fair market value, rather than the face amount of the debt;

* Gains tax liability on subsequent sales by lenders of foreclosed property are computed according to a basis consisting of the loan amount and other expenses incurred during the foreclosure period prior to sale, rather than the gain in market value between the time of the foreclosure and the subsequent sale;

* Penalties are waived or abated if failure to pay is attributable to a reasonable cause;

* Lenders taking back a troubled property are shielded from the transferor's gains tax liability arising from a sale; and

* Certain "soft costs" of advertising and marketing expenses, mortgage recording taxes, interest on land during construction and the amortized cost of 421(a) certificates on the unsold cooperative and condominium units are included in the original purchase price.

The state made an historic decision to finally de-regulate some apartments whose rents stand at luxury price levels and whose occupants' household incomes are unquestionably affluent. The Rent Stabilization Association and the Real Estate Board collaborated on the successful pursuit of this change in the residential rent law. The legislation acknowledges that, in numerous cases, owners are subsidizing tenants.

At City Hall, the industry attained some well-deserved relief from what had been soaring increases in water and sewer costs. The government clamped a two-year freeze on these rates. We've been promised by senior officials that the rates will vary only with inflation for the rest of the decade. REBNY was also pleased that, for the second consecutive fiscal year, the city honored its pledge to hold the line on the average realty tax rule. This policy was forged after REBNY's 1991 government and public relations campaign prompted City Hall to cut a proposed $646 million property tax increase to $270 million.

The Board also made two major inroads on crucial planning initiatives. First, REBNY convinced the City Planning Commission and the City Council to reach a compromise on the waterfront plan that eliminated the original proposal's unreasonable demands on owners of shoreline projects to construct and maintain public areas, and to absorb liability for events beyond their control. In addition, the compromise exempts zoning lots not closer than 1200 feet from the shoreline that don't abut a waterfront park, and excluded lower density residential sites from the public access provisions.

REBNY also persuaded the government to lift the ban on 421(1) benefits from projects in FAR 15 zones. Since the program was intended to promote residential construction, we pointed out, it made no sense to deny its incentives to the sort of high-rise building most typical of Manhattan's housing stock.

Steven Spinola, President Real Estate Board of New York.