Seven super successes and other legislative and regulatory accomplishments of 2003.

Lobbyists and trade associations in Washington, D.C., take credit for a lot of things. Some are valid accomplishments, while others are positive developments with only marginal involvement by the group taking credit. Our 25 years of advocacy experience have convinced us that it is very difficult (and usually unwise) to pursue or oppose legislative/regulatory action without involving other groups with a stake in the outcome. This means that more often than not we act in coalition when we achieve a victory, and the question becomes whether credit takers were coalition leaders or free riders. Following is a list of major accomplishments in which we know NAA/NMCH have played an important role.

Top Seven Successes

Successes were achieved in 2003 in many areas, but the following seven accomplishments stand out as issues where NAA/NMHC took the lead and the dollar savings to the apartment industry was substantial.

1. Stopped U.S. Postal Service from requiring retrofit of all mailboxes. (See #1 under "Property Management.")

2. Eliminated costly water submetering regulation. (See #1 under "Environment.")

3. Twice prevented a long-term shutdown of the FHA Multifamily Insurance Program. (See #1 under "Finance.")

4. Secured use of non-metallic sheathed cable. (See #1 under "Building Codes.")

5. Won right to retain exclusive video contracts. (See #2 under "Property Management.")

6. Preserved the value of the Low-Income Housing Tax Credit Program. (See #2 under "Housing and Tax Policy.")

7. Persuaded EPA to make storm water permits less burdensome. (See #2 under "Environment.")

Property Management

1. Spearheaded an effort to successfully oppose mandatory retrofitting of all apartment mailboxes.

NAA/NMHC organized a multi-sector real estate coalition that successfully blocked a U.S. Postal Service proposal that would have required apartment owners to significantly increase the size of all apartment mailboxes, even those already in use. Left unchallenged, the retrofit requirement would have cost the industry at least $2 billion.

2. Won the right for owners to enter into exclusive video contracts.

After eight years of NAA/NMHC's education efforts, the FCC decided not to ban or put a cap on the length of exclusive contracts between apartment providers and video providers. Several telecom providers had actively sought a ban on exclusive contracts in their effort to secure mandatory access to apartment properties. We argued that exclusive contracts are necessary to support competition by enabling smaller providers to establish themselves, and the FCC agreed with us.

3. Protected apartment interests as Congress passed several new and revised consumer privacy laws.

NAA/NMHC successfully urged Congress to balance the needs of leasing agents to obtain valid credit information with the legislators' desire to strengthen consumer privacy rights in legislation creating new national credit standards. The final Fair and Accurate Credit Transactions Act (FACT Act) addressed NAA/NMHC's primary concern with the legislation by expanding the types of state laws pre-empted by the Fair Credit Reporting Act (FCRA) and making those extensions permanent. Having one national standard of privacy protections for consumer credit reports simplifies compliance for multi-state operators.

NAA/NMHC also supported legislation passed this year banning deceptive unsolicited e-mails (i.e., spam). The new law overrides even tougher anti-spam laws already passed in some states, including a California law set to take effect Jan. 1, 2004, that would have required online marketers to obtain consumers' permission before sending them any e-mails.

4. Created fair housing partnership with HUD.

Under a new agreement with the U.S. Department of Housing and Urban Development (HUD), NAA/NMHC are leading the way in promoting industry awareness (with the help of member companies and NAA affiliates) of best practices in reaching out and meeting the needs of potential Hispanic renters, a market of great interest to for-sale and rental housing providers alike.

Housing and Tax Policy

1. Preserved the value of the Low-Income Housing Tax Credit.

Active participation by NAA/NMHC preserved the value of the Low-Income Housing Tax Credit (LIHTC) after President Bush's original proposal to end the double taxation of corporate dividends unintentionally threatened to gut corporate support of the program by penalizing corporations that used LIHTC purchases to lower their taxes. Analysts estimated the proposal could have reduced by 30 percent the number of affordable housing units produced each year. NAA/NMHC successfully protected the program in the final bill by supporting an alternative provision that was eventually enacted and did not affect the LIHTC.

2. Turned back rent control initiatives in Massachusetts, New York and California.

In coalition with state and local apartment associations, NAA/NMHC helped defeat a ballot initiative to reinstate rent control in Cambridge, Mass. We also worked to successfully prevent a dramatic expansion of New York City's rent control laws when they came up for renewal. Finally, we postponed legislative action on a California bill (S.B. 178) that would subject all new properties to rent controls.

3. Blocked yet another homeownership incentive.

NAA/NMHC worked quietly behind the scenes to remove a provision in a $350 billion tax reduction bill passed in May that would have allowed certain households to deduct the cost of mortgage insurance premiums from their taxes. Proponents estimated that this provision would have helped up to 300,000 renters purchase a home.

4. Protected Section 8 Funding and Urged Program Reform.

When the Bush administration announced proposals to eliminate funding for some existing voucher holders and convert the Section 8 voucher program into a state-run block grant program, NAA/NMHC helped form a coalition that persuaded Congress that it would be far more effective to retain the program at the federal level and make the administrative reforms long advocated by NAA/NMHC to improve voucher utilization rates. This message was delivered in Congressional testimony by Andrew Showe, of the Columbus Apartment Association, and by 2003 NAA President Tom Shelton. AS a result, the omnibus spending bill approved in December by the U.S. House of Representatives rejected the block grant initiative and provided sufficient funding to cover all vouchers expected to be used in FY 2004.

Finance

1. Twice prevented a long-term shutdown of the FHA multifamily insurance program.

Thanks to quick action by NAA/NMHC members and others, Congress passed and President Bush signed into law a bill (P.L. 108-83) restoring commitment authority for the FHA Multifamily insured Loan Program after it shut down on Sept. 16 because of insufficient credit authority. When the program was suspended again on Dec. 4, NAA/NMHC again jumped into action and secured Congressional approval of supplemental funding by Dec. 9, averting a potential six-week shutdown while Congress was in recess.

2. Secured increased FHA loan limits and reduced insurance premiums.

NAA/NMHC and others successfully advocated for an increase in FHA insured multifamily loan limits in high-cost areas. Before adjourning for the year, Congress approved legislation that boosts FHA loan limits to 140 percent, up from 110 percent, in high-cost areas and authorizes the HUD Secretary to approve loans as high as 170 percent for special projects. In addition, after two years of effort, in October HUD finally agreed to reduce the FHA multifamily mortgage insurance premium to 50 basis points. This move completed the rollback of a 30 basis point increase HUD instituted in 2001. An analysis requested by NAA/NMHC and others supported our contention that there was no financial need for the premium increase.

Environment

1. Convinced the EPA to ease regulations on owners who bill directly for water.

After a long uphill battle, on Aug. 28 the EPA published a draft notice reversing its long-held position that apartments that charge residents separately for the water they consume must comply with the water quality testing and other requirements imposed on public water systems. This change, sought by NAA/NMHC, will make it less burdensome for owners to bill directly for water.

2. Successfully urged the EPA to make its storm water permit less burdensome.

NAA/NMHC advocacy successfully convinced the EPA to eliminate unnecessary certification and documentation requirements in its new Construction General Permit (CGP). This is a major win for the apartment industry, as it reduces regulatory barriers to the development process and will reduce compliance costs.

3. Convinced Congress not to enact mold legislation.

As the acknowledged leader for the rental housing industry on the topic of mold, in 2003 NAA/NMHC successfully convinced Congress not to enact mold standards until better science is available. We also played an active role in developing standards for mold as part of the real estate due diligence process and worked with the U.S. Occupational Safety and Health Administration to help draft non-mandatory guidelines for workers who are exposed to mold.

4. Convinced the Consumer Product Safety Commission (CPSC) lo ban candles with lead in the wick.

At NAA/NMHC's urging, the CPSC banned candles with lead-cored wicks. This is the first time a federal agency has specifically recognized products other than lead-based paint that can create health hazards that property owners could ultimately be held liable for. In addition, NAA/NMHC-supported research was instrumental in convincing the U.S. Centers for Disease Control not to lower the level of lead it considers to constitute lead poisoning.

5. Persuaded HUD to extend its free lead-based paint inspection program.

NAA/NMHC prevailed upon HUD to extend its deadline for eligible owners to enroll in its "Big Buy" program.

Building Codes

1. Changed the building codes to allow wider use of non-metallic sheathed cable.

After several years of tireless effort by NAA/NMHC's Ron Nickson, the National Fire Protection Association (NFPA) has finally agreed to allow developers to use less expensive NM cable in buildings up to five stories in height instead of restricting it to properties with three or fewer stories. This victory will save the industry more than $50 million per year in construction costs.

2. Secured change in accessible standards that decreases required bathroom space.

When changes were proposed to the bathrooms allowed under the ANSI A117.1 accessible standard, NAA/NMHC pored over blueprints to craft a better compromise that would reduce the number of handicapped accessible bathrooms required in Type A dwellings. The change we proposed was accepted, and this change will add an extra 15-20 square feet of usable space in these units.

3. Convinced HUD lo pursue fair housing accessibility education instead of after-the-fact lawsuits.

After years of encouragement from NAA/NMHC to better educate housing providers about federal accessibility requirements before they begin construction instead of focusing solely on after-the-fact lawsuits, in 2003 HUD launched a new "Fair Housing Accessibility First" initiative. The program includes numerous resources housing providers can use to get answers to technical or legal questions.

Beyond Lobbying: The Next Step

In addition to our specific legislative and regulatory accomplishments, we also produced numerous guidance documents over the year that helped member firms comply with new regulations and emerging issues.

1. Provided members with valuable operational guidance on complying with consumer privacy laws.

NAA/NMHC helped owners review their operational procedures in marketing, screening and human resources to ensure compliance with a variety of new federal consumer privacy laws. Au August memorandum offered advice on how new federal Do Not Call and Do Not Fax regulations would affect apartment marketing followed by a December memo addressing the new anti-spam law. NAA/NMHC also offered compliance guidance on how to adjust their screening and consumer data operations to comply with the new Fair and Accurate Credit Transaction Act, as well as a memorandum outlining how new anti-spam legislation helped members adjust their screening and consumer data operations to the most significant changes in this area of federal law since 1996.

2. Worked to make terrorism insurance more widely available and more affordable.

NAA/NMHC continue to closely monitor implementation of 2002's Terrorism Risk Insurance Act (TRIA), which provides backstop funding for catastrophic losses arising from certain terrorism-related insurance claims. NAA/NMHC aided in a Treasury' Department study of the impact of TRIA on terrorism insurance pricing, coverage and availability and urged the Department to help dispel a misunderstanding that the law does not cover losses caused by nuclear, biological or chemical (N/B/C) events. In response to data submitted by NAA/NMHC and others, HUD announced it would no longer require terrorism insurance coverage on FHA-insured multifamily loans of $50 million or less.

3. Led the way in providing guidance and advocacy on apartment security issues.

NAA/NMHC continued their efforts to assist apartment firms with operational and security concerns in a post-Sept. 11 environment. When the national terrorism threat warning level was raised to "high risk" and apartments were singled out as possible soft targets, NAA/NMHC quickly provided guidance to help operators identify possible indicators of terrorist attack planning. NAA/NMHC also made members aware of federal resources: (1) to help owners protect their buildings and occupants from airborne chemical, biological and radiological attack; (2) on high-rise evacuations; and (3) step-by-step approach to emergency planning for business.

4. Offered SARS Guidance.

In response to concern over Severe Acute Respiratory Syndrome (SARS), NAA/NMHC issued a brief reference document outlining apartment operational and legal considerations related to resident and applicant screening, as well as isolation and quarantine for infectious diseases.

5. Strengthened the NAA/NMHC Balanced Housing Policy campaign.

NAA/NMHC's multi-faceted campaign seeking a more level playing field between rental housing and homeownership produced numerous successes in 2003. Most noteworthy, after a successful meeting with then HUD Secretary Mel Martinez, the Secretary began including references to the importance of rental housing in his public remarks. Beyond the rhetoric, in November the Department issued a request for comment on two initiatives to reduce federal, state and local regulatory barriers to affordable housing. Two new tools were also added to the anti-NIMBY arsenal in 2003--a new white paper titled, From NIMBY to Good Neighbors: Recent Studies Reinforce that Apartments are Good for a Community, and a NAA/NMHC-supported publication from the Urban Land Institute (ULI) titled, The Case for Multifamily Housing. In April, NAA/NMHC mailed the ULI brochure to more than 15,000 local policy makers and planning officials.

6. Established valuable relationship wills the U.S. Conference of Mayors.

Recognizing that our fight to overcome NIMBYism must take place at the local level, NAA/NMHC devoted significant resources reaching out to the U.S. Conference of Mayors. As a result, NAA/NMHC were invited to participate in the Mayors' National Economic Summit in November where we warned attendees that cities that discourage apartments do so at their own economic peril.

7. Pursued adjustments to utility allowances at LIHTC properties.

At the urging of NAA/NMHC and others, the Internal Revenue Service (IRS) has agreed to consider changing its regulations governing rent adjustments at LIHTC properties where residents pay all or a portion of their utilities. Current regulations overestimate utility' costs, and thus reduce rental income, because they use data mostly from older properties to establish the rates even though most LIHTC properties are newer and much more energy efficient. NAA/NMHC also are encouraging the IRS to amend their roles and allow properties to become stabilized before potentially having to reduce rental income due to utility adjustments. The IRS indicates it will take action on the matter in 2004.

8. Published critical guidance documents on illegal drug labs and indoor air quality.

New NAA/NMHC white papers reviewed emerging indoor air quality issues facing owners and offered valuable guidance to help owners deal with the increasing problem of illegal drug labs.

Taking AIM at Tracking Legislation

The Apartment Industry Mobilization Service (AIMS) is vital to the apartment industry's ability to present its position when decisions are made in Washington. The industry must speak with a clear, powerful, nationwide voice to preserve a market-friendly regulatory environment. Elected officials listen best when the voice comes from respected, informed voters back home.

NAA/NMHC regulatory and legislative successes often depend on the willingness of members to sign up and participate in the MMS program. By having an already established grassroots mechanism, NAA/NMHC are able to mobilize quickly local efforts to affect the outcome of federal legislation and regulation.

AIMS members receive alerts about upcoming congressional action and help contact staff and members of Congress who are most influential. AIMS members build contacts with elected officials in key positions and gain important information on government actions affecting the apartment industry.

AIMS members also provide the Joint Legislative Staff with their professional insights that help make NAA/NMHC lobbying efforts more effective and they participate in special task forces to help solve problems facing the industry.

Visit www.naabq.org and click on the "grassroots action center" link to register.