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Hard work paying off with real estate victories in government
January 14, 2015
By Steven Spinola
This Thursday marks REBNY’s 119th Annual Banquet, an event which celebrates our industry, its members, and everything we have all done in the past year to better New York City.
One of REBNY’s most important missions is to advocate on behalf of our members’ best interests on not only a city and state-wide level, but on a federal level as well.
2014 was a year which saw us working harder than ever before to pursue that mission and set more goals for the year ahead.
The signing of H.R. 2600: The Interstate Land Sales Disclosure Act (ILSA) Update of 2013 into law represents a great victory of 2014.
ILSA, originally passed in 1969 to protect customers from being fraudulently sold property due to misleading advertising, began being applied to vertical condominiums in the 1980s. However, following the real estate market crash in 2008, buyers were able to take advantage of a loophole in ILSA which allowed them to back out of pre-crash contracts.
On September 26, 2014, President Obama signed H.R. 2600 – introduced and passed as a result of advocacy efforts by Senator Charles Schumer, U.S. Rep. Carolyn Maloney, and REBNY – into law, which exempts condominium developments from ILSA filing and registration requirements, and in doing so, gives condominium developers and their lenders a greater level of certainty as the economy continues to recover.
In a time of partisan battles, ILSA passed without any objections from either side of the aisle, which was a major victory for our industry, and one which will undoubtedly lead to even greater confidence in our City’s economy going forward.
Most recently, another momentous victory took place. On Monday President Obama also signed H.R. 26, the Terrorism Risk Insurance Program Reauthorization Act (TRIA) of 2015, into law, after it was passed overwhelmingly by both the House and the Senate.
TRIA, which was originally passed in the wake of 9/11, is an act created to ensure the availability of terrorism risk insurance. The bills also provide a government reinsurance backdrop in the event of large-scale terrorist attacks, and require that business insurers offer terrorism coverage for the types of insurance included in the act.
At such a delicate time in New York City’s recovering real estate economy, the absence of legislation such as TRIA could raise several troublesome issues, including job losses and disruption of construction. Furthermore, as we have learned, in the event of a large-scale act of terrorism the need for rapid deployment of funds is critical to the recovery and rebuilding of real estate in the city.
TRIA expired at the end of 2014, but through the help of Senator Charles Schumer, U.S. Rep. Carolyn Maloney, Congressman Peter King, House leadership, the New York delegation, the Real Estate Roundtable, the Coalition to Insure Against Terrorism, and others, the program has been reauthorized for an addition six years.
Going forward, REBNY still has items on its federal agenda for 2015.
In November, several organizations, including the Institute of Real Estate Management, the National Apartment Association, The Real Estate Roundtable, wrote a letter urging Senate Majority Leaders Harry Reid and Mitch McConnell to pass a proposal to provide relief from the Foreign Investment in Real Property Tax Act (FIRPTA).
The proposal, called the Menendez/Enzi proposal, would do so in two ways. First, foreign pension funds that invest in U.S. real estate and infrastructure are subject to a tax penalty under FIRPTA, which the proposal would negate entirely.
It would also allow foreign investors to take greater ownership stake in publicly traded companies whose assets largely consist of U.S. real property without triggering FIRPTA liability and extend the provision to certain collective investment vehicles. REBNY has always been an advocate of encouraging foreign investment, and will continue to support this proposal in 2015.
REBNY will also continue to monitor activity surrounding the reform of Government Sponsored Enterprises and how they operate. Following the economic downturn in 2008, GSEs such as Fannie Mae and Freddie Mac experienced substantial losses, and several proposals have been submitted by Congress and the Obama Administration to rectify this.
They range from shuttering GSEs completely, to more modest reforms such as increasing down payments and financing requirements, shortening term loans, raising interest rates, and more.
Senator Charles Schumer reached out to REBNY to assess these reforms and their impacts, and has written a letter urging FHFA to avoid implementing further arbitrary reductions or placing caps on Fannie Mae’s and Freddie Mac’s origination levels and securitization activities with regard to multifamily finance.
These are only a handful of last year’s accomplishments and this year’s upcoming projects, and I am immensely proud of the hard work we’ve all put into making them possible. I look forward to even greater victories going forward, not only for the real estate industry, but for New York.
In other REBNY News:
January 15 is REBNY’s 119th Annual Banquet from 7 p.m. to 10 p.m. at the New York Hilton! Join us at one of the most celebrated events of the year as we recognize and honor our industry’s top professionals. For more information, contact MaryAnn Aviles at 212-532-3100 or at MAviles@rebny.com.
January 20 from 9:30 a.m. to 11 a.m. is the Tony Robbins Peak Performance Workshop, with Top National Speaker Dragan Trajkovski. Free for REBNY Residential Members, this workshop will help you create a strong routine to maximize business results and overcome obstacles, develop strategies to achieve amazing results in any area of your life, determine your financial success this year, and much more! For more information, contact Jeanne Oliver-Taylor at JTaylor@rebny.com.
January 26 from 12 p.m. to 2 p.m. is the Commercial Real Estate Finance Luncheon at the Yale Club. For more information, contact Desiree Jones at DJones@rebny.com.