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REBNY victories to assist in recovery.

Several Real Estate Board victories in the first half of 1993 will hasten the market's recovery.

Three tax actions sought by REBNY were especially favorable to investors. First, water and sewer tax rates were frozen for two-years. Second, the City Council honored its pledge not to increase the realty levy. Third, the state instituted administrative reforms in the gains tax, including a redefinition of "consideration" as appraised market value, rather than the face amount of the debt for computing gains tax liability. This change will facilitate real estate transfers by removing what had been a strong disincentive to sellers.

Real estate brokers benefitted from REBNY's efforts. The Department of State agreed to virtually all the Board's recommendations for revising continuing education requirements, including an equitable assignment of credits for work experience. This proposal's adoption will reduce licensees' classroom hours. REBNY also helped to defeat bills whose passage would have made brokers responsible for disclosing immaterial facts, and for conveying to buyers detailed state-prepared forms to be filled out by a seller.

REBNY was a prime mover in convincing the state to deregulate some luxury priced rent-stabilized apartments, as well as units occupied by especially affluent tenants. In addition, REBNY fought off an attempt to reduce the allowable rent increase for individual apartment improvements from 1/40th the rent to 1/72nd, and turned back a bill calling for the elimination of the Major Capital Improvement (MCI) increase once the recoupment period expires. These related successes preserve some motive for owners to reinvest in residential buildings.

As the federal government struggled to forge a budget, REBNY was first to advise Washington that unless individuals can reduce the tax basis of depreciable property without having to pay full taxes immediately on canceled indebtedness, the gears of our country's credit machinery will jam, depriving businesses of capital to accelerate an economic recovery If that tax is paid over time through a lower depreciable basis, government gets the revenue eventually and owners can retain distressed properties. Otherwise, lenders will be hamstrung with properties to manage, losses on their books, and added constraints on loans. On another major issue, REBNY and the National Realty Committee have called for establishing parity between real estate and other industries on passive losses. Qualifying losses from rental properties should be deductible from all income. At this writing, these matters were unresolved, but we've made our case forcefully in a difficult budget processes. New York's Senator Alfonse D'Amato and Connecticut's Senator Joseph Liberman were commendably supportive.

The Real Estate Board was part of another major 1993 news story. Following the tragic explosion at the World Trade Center, we assembled a bank of 5 million square feet of temporary office space and handled inquiries from between 15 and 25 percent of the twin towers' employers. The space was made available at owners' cost (cleaning, taxes and utilities) and without brokers' commissions. The Board was praised by Governor Cuomo, Mayor Dinkins and Port Authority Executive Director Stanley Brezenoff on a nationally televised news conference.

Terrorism at the trade center turned New York's attention toward enhancing building security. At the end of March REBNY held a seminar on this subject with the Building Owners and Managers Association of New York and reissued its high rise fire safety brochure.

REBNY'S other building management accomplishments included persuading the city to agree to go back no more than five years in pursuit of taxes and interest on profits from owners' sale of electricity, where it had been the practice to calculate proceeds as far into the past as 13 years and more. We also argued successfully against a proposed costly retrofit to transmit the location of an alarm within the building to the departmental borough communications center. Since this information is provided when firefighters arrive on the scene of a blaze, the retrofit would have served no public safety interest.

On other fronts, we inaugurated two new services. REBNY is publishing "The Real Estate Board Quarterly Cooperative Sales Report." For the first time, information on this sector of the market, whose activity is not a matter of public record, will be pooled and analyzed from submissions provided by 30 member residential brokerages. The conclusions are released to guide buyers and sellers. The full report is available exclusively to participating brokerages. REBNY has also established a mediation service to help resolve disputes at low cost by promoting negotiation and communication between parties.

Almost every aspect of REBNY's work concerns economic development. For example, our collaboration with the Fifth Avenue Association and the Grand Central Partnership won more enforcement staff to police illegal street peddlers, and a restriction that bars vendors from selling printed matter in areas where general and food vending are prohibited. Fewer peddlers will improve the retail environment, and shore up the taxpaying merchants whose shops elevate New York's stature as a business and fashion capital. The Board's also discouraged the state from prohibiting industrial development bonds to be used for projects with large portions of retail space. Such a ban would limit the bonds' effectiveness in corporate retention programs as retail leasing is currently a market strength. We also averted a tax hike by supporting passage of the city's Solid Waste Management Plan, which substitutes incineration and recycling for expensive transportation of garbage to out-of-state disposal sites.

I've written at length -- although not inclusively -- about the Real Estate Board's many accomplishments over the last six months to acquaint you with our trade association's varied services to the industry. Readers of this issue of Real Estate Weekly are well aware that a revitalized real estate industry will mean many added career opportunities if you have the talent, energy, dedication and ambition to succeed in this fascinating and rewarding profession. I hope this article sparks your interest in joining the Real Estate Board. Your participation in REBNY can make it an even more effective force for the advancement of your career.
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Title Annotation:Career Development; Real Estate Board of New York successful during first half of 1993 in tax actions brought to New York City Council
Author:Spinola, Steven
Publication:Real Estate Weekly
Article Type:Column
Date:Aug 18, 1993
Words:985
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