Housing Finance Reform Moves to Center Stage With work complete on the financial reform measure, lawmakers are turning their attention to GSE reform and the future of housing finance. Barney Frank (D-MA), the chairman of the House Financial Services Committee, announced the Committee will continue its work and conduct additional hearings on the topic in September. The Obama Administration previously announced it would convene a high-level conference on the Future of Housing Finance and the GSEs, NAA/NMHC was invited to attend. Despite this increased attention, legislation is not anticipated to be introduced until the next Congress convenes in 2011, and most observers agree a final solution to the GSE/housing finance reform problem could take years to implement. NAA/NMHC will continue to work with the Administration and lawmakers to ensure they understand the apartment industry’s unique needs.

House Passes Legislation to Bring Foreign Capital into U.S. Commercial Real Estate Prior to adjourning for its August recess, the House passed legislation (H.R. 5901) designed to bring new capital into distressed commercial real estate markets. The bill would double to 10% the amount a foreign investor can own of a publicly traded real estate investment trust (REIT) before triggering onerous reporting and tax provisions of the Foreign Investment in Real Estate Tax Act of 1980. NAA/NMHC actively support the measure; it is unclear at this point when the Senate will consider the bill.

NAA/NMHC comment on Proposed Changes to Lead Paint Rules NAA/NMHC have submitted detailed comments in response to the latest round of amendments EPA has proposed to the Renovation, Repair and Painting (RRP) rule. The RRP rule imposes compliance obligations on owners of pre-1978 market-rate and affordable properties when they undertake common renovation and repair activities. EPA is proposing to require the use of dust wipe testing instead of the “Swiffer” test for certain types of renovation projects. It also seeks to extend the RRP work practice requirements to the disturbance of any painted surface. Their comments note the Agency has no data justifying this costly and technically difficult-to-implement amendment to the RRP rule, and it has seriously underestimated the costs of compliance. They also pointed out the proposed rule wrongly treats all RRP activities as if they were abatement jobs, despite Congressional intent they be treated differently. In doing so, the proposal would create perverse disincentives discouraging owners from maintaining their properties. Finally, they asked EPA to postpone enforcing the RRP rule until cost-effective field tests are available to detect lead on all surfaces so owners can determine whether they need to comply with the RRP rules.

NMHC Quarterly Survey Shows Widespread Improvement The apartment market’s rebound continues to gain momentum, according to NMHC’s latest Quarterly Survey of Apartment Market Conditions. All four of the survey’s indexes covering occupancy, sales volume, equity finance and debt finance showed improvement over three months ago; the indexes for both sales volume and equity financing registered all-time highs. In a press release announcing the survey, NMHC Chief Economist Mark Obrinsky noted “Demand for apartment residences has substantially increased thanks to modest improvements in the jobs market and the continuing decline in homeownership rates. Going forward, the near-term outlook for the apartment industry is likely to be tied to the pace of job growth. Over the longer term, positive demographic trends are likely to keep the demand for apartments growing.”

DOJ Announces Revised ADA Regulations The Department of Justice has released updated Americans with Disabilities Act (ADA) accessibility regulations, which apply to commercial buildings and privately owned facilities opened to the public. In apartment properties, that generally includes leasing offices, parking areas, restrooms and entrances and routes to these public areas. This is the first comprehensive revision since the ADA was passed two decades ago, and although many of the changes are substantial, most do not apply to apartments. Key changes include revised reach ranges and pathway running and cross slopes. A side reach range for environmental controls must now be no higher than 48 inches versus 54 inches in the 1991 standard. The lower reach range must now be no lower than 15 inches versus the previous nine inches. Pathway running slopes are limited to 1:20 and cross slopes to 1:48 for walking surfaces. Both of these changes are consistent with design and construction elements of the Fair Housing Act and are therefore familiar to the industry. For newly constructed properties or alterations, the DOJ regulations allows covered entities the choice of following the updated rules or the original standards during the first 18 months of implementation. After that, only the 2010 standard will be permitted. If a property has been altered in accordance with the 1991 standards, there are no requirements to retrofit such elements to reflect the incremental changes in the 2010 standards. NMHC /NAA will continue to analyze the new standards for apartment industry specific applications and update members as needed.