With only five months before the midterm elections, NMHC/NAA continue to advocate on behalf of the multifamily industry on a number of key issues.
The recent decision to cancel the August recess allows the Senate more time to pass legislation and move key nominees forward. There are a variety of issues currently slated for discussion in the House and Senate. Among these issues are bills related to the fiscal 2019 spending (including appropriations for water projects, HUD programs and military construction) and the renewal of the National Flood Insurance Program (NFIP) that expires on July 31. NMHC/NAA are continuing to make headway on these topics, as well as other relevant issues in the coming months.
Following last year’s passage of the Tax Cuts and Jobs Act (TCJA), NMHC/NAA continue to focus on tax reform implementation in a number of key areas. For instance, we are advocating for regulatory or legislative fixes to the depreciation period of multifamily properties in existence prior to 2018 for firms opting out of interest deducibility limits. Additionally, we continue to work to ensure multifamily will be a qualifying investment for Opportunity Zones and that the Zone incentives can be paired with LIHTC, Historic and New Market Tax Credits.
“Tax reform represented a tremendous win for the multifamily industry because it has lowered rates while protecting capital flows,” said Matthew M. Berger, NMHC’s Vice President of Tax. “The industry is now working to ensure that the Treasury Department interprets the provisions as Congress intended.”
In the current political climate, immigration remains a key issue. Moderate House Republicans have joined with Democrats to force either a discharge petition vote (a measure that requires House majority and allows a bill to be brought to the floor without a full report from the committee), or – what is more likely at this stage – a vote on a brokered package of bills from Congressional leadership.Immigrants are a key driver of apartment demand and an important force in apartment construction and operations so NMHC/NAA continues to be engaged in the general immigration debate.
Several key immigration programs are important to the industry. For example, the EB5 program is currently on a short-term reauthorization. NMHC/NAA continue to push for a long-term reauthorization of the program paired with enhancements and improved integrity measures.Additionally,the H2B Visa program continues to be oversubscribed, illustrating dramatic labor shortages for a number of industries in need of seasonal workers.
National Flood Insurance Program Reauthorization (NFIP)
The aforementioned NFIP will expire on July 31 – unless Congress moves to reauthorize the program. “Extending the National Flood Insurance Program (NFIP) is absolutely critical for apartment companies of all sizes and the broader real estate industry,” said Kevin Donnelly, Vice President of Government Affairs at NMHC. “The industry continues to make its case for Congress to enact a long-term reauthorization of the program, bolster the private market and enact critical multifamily reforms that will enable owners to better protect against flood risk.”
NMHC/NAA are continuing to push Congress to enact a long-term reauthorization that included fundamental reforms important to the multifamily industry. In November 2017, with the support of NMHC/NAA, the House of Representatives passed a five-year reauthorization bill that included several of these reforms. As of this writing, the Senate has yet to consider similar legislation.
Housing Finance Reform
Due to the current political state of play, legislative action on Housing Finance reform is doubtful in 2018. However, NMHC/NAA continues to meet with Member of Congress and Administration officials to stress the important role that the GSEs play in the multifamily industry.
Director Mel Watt’s term at FHFA will end at the end of 2018 and the Trump Administration will have an opportunity to pick a new FHFA Director. NMHC will be closely following the debate and process surrounding the choice of a new Director.
ADA Education and Reform Act
Following House passage of H.R. 620, the ADA Education and Reform Act earlier this year, NMHC/NAA focus now shifts to the Senate. The majority of Senate Democrats have signed a letter opposing Senate action on H.R. 620, which complicates the path forward for passage in the Senate. “The Passage of H.R. 620 in the house is an important step towards upholding the objectives of the American Disabilities Act while providing commonsense reforms to deter expensive and unnecessary lawsuits,” said Paula Cino, NMHC’s Vice President of Construction, Development and Land Use Policy. “We will continue to work with lawmakers in the Senate to show how H.R. 620 responds to a growing problem of ‘drive-by’ ADA lawsuits.”