Posts filed under ‘Government Affairs’

Inspections Bill Headed to Governor

From the desk of Apartment Association of North Carolina Executive Director Will Brownlee comes news of a significant legislative victory for the apartment industry in North Carolina:

Thrilled to report that S326 HAS PASSSED THE SENATE this afternoon by a 42-1 vote and is being sent to the Governor for his signature.  When signed, it is set to become law effective January 1, 2017.

This is an enormous victory for the NC apartment industry, a culmination of nearly 5 years of effort – enacting laws that will help protect our industry from invasive and overreaching inspection and registration schemes and restore a reasonable balance between the interests of landlords and cities/counties moving forward.  Many thanks to those of you who reached out to your Representatives and Senators this week;  based on reports received from Colleen and her team, several reported back that they had heard from you, and that your information had a strong impact on the final outcome.

On that note, AANC and our industry owes a huge thank you to AANC Legislative Counsel Colleen Kochanek and her team, as well as industry allies such as the NC Association of Realtors, for their tireless and creative efforts in securing necessary stakeholders and finding ways to resurrect the original H530 bill in the closing week of the legislative session and have it reborn as the now-passed S326.

 

We’ll have more about what this means in follow up posts.

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July 1, 2016 at 7:48 pm Leave a comment

NAA Statement on “How Housing Matters” Study

Following is a statement from Doug Culkin, CAE, President and CEO of the National Apartment Association, on the MacArthur Foundation’s 2016 “How Housing Matters” survey:

“With four of five Americans believing housing affordability continues to be a problem, this study underscores the need for political leadership and results‐driven policies to meet the demand for apartment housing.

America’s affordability problem is growing. The supply of rental apartments can’t meet the demand – between 300,000 to 400,000 apartments must be built annually to keep pace, but only an average of 208,000 were built between 2011 and 2015.

Compounding this challenge is stagnancy in incomes. Median rental household income is almost unchanged from 35 years ago on an inflation‐adjusted basis.

Finally, costly and cumbersome regulations at all levels of government create barriers to the development of new rental housing and ultimately drive rents above what many families can afford.

We commend the MacArthur Foundation for reinforcing that Americans want lawmakers to act now to address our nation’s housing affordability challenges.

Lawmakers must recognize that the most viable solution requires a strong partnership between government and the private sector. The National Apartment Association continues to work to enable our members to provide apartment homes that meet the needs of all Americans.”

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The National Apartment Association (NAA), America’s leading voice for the apartment housing industry, provides its members with the best range of strategic, educational, operational, networking and advocacy resources they need to learn, to lead and to succeed. As a federation of nearly 170 state and local affiliates, NAA encompasses over 72,000 members representing more than 8.4 million apartment homes globally. NAA’s purpose is to enable every single one of its members to fulfill his or her professional goals with great competence, speed and the highest standards of ethics. To learn more, visit http://www.naahq.org.

June 27, 2016 at 1:00 pm Leave a comment

NAA Whitepaper on Criminal Conviction Screening Policies

The National Apartment Association has just released a white paper titled Criminal Conviction Screening Policies: Best Practices to Avoid Disparate Impact Liability and it is a valuable resource for management companies evaluating their screening processes in the wake of HUD’s guidance last month. The white paper is divided into two parts: Part I deals with how to design criminal conviction policies so they are not susceptible to disparate impact claims of discrimination, and Part II explains how the concept of disparate impact liability emerged under the FHA and why HUD’s guidance has made screening policies a subject of increased interest for housing providers and advocacy groups.

This is truly a good resource, but as they write in the conclusion, the thinking on this issue is sure to evolve over time:

The analysis is admittedly an early assessment of the intersection between criminal screening policies and the HUD disparate impact rule approach. The way both HUD and the courts treat these types of disparate impact claims may (and, indeed, is likely to) evolve over the coming years as courts provide precedent for interpretation of the HUD Guidance and as HUD or Congress enacts further clarifying guidance, regulations, rules or statutes.

In the meantime, here’s a handy table of Do’s and Don’ts they provided in their introduction:

DosDontsGraphic

Here’s a link to the full PDF version of the paper.

May 4, 2016 at 8:27 pm 1 comment

The Impact of Disparate Impact – Your Screening Procedures May Need Revising NOW

The following is an email sent this morning (4/4/16) by AANC Executive Director Will Brownlee:

HUD Secretary Announces Guidance Regarding Excluding Persons with Criminal Records and Landlord Use of Blanket Bans/Denials

Dear NC rental industry leaders:

 It appears HUD is kicking off Fair Housing Month with a bang.  From the New York Times this morning (thank you Tom and Mary Gwyn for forwarding):   http://www.nytimes.com/2016/04/04/nyregion/federal-housing-officials-warn-against-blanket-bans-of-ex-offenders.html?emc=eta1

Ever since last summer’s U.S. Supreme Court decision in Texas Dept. of Housing and Community Affairs v. Inclusive Communities Project and the Court’s formal endorsement of a disparate impact fair housing standard, industry watchers have tried to anticipate what may be the next Fair Housing shoe to drop for the housing industry.  This appears to be it.   Based on the information contained in the article and in HUD’s Guidance (see link below), it would appear that criminal screening standards may, by necessity, need to become more nuanced to be viewed as fair housing compliant.

A full copy of the HUD Guidance, released this morning, can be found here:  http://portal.hud.gov/hudportal/documents/huddoc?id=HUD_OGCGuidAppFHAStandCR.pdf .

Key takeaways after reading the Guidance, which appears at first blush to be something of a frontal assault on the industry’s use of criminal screening for applicant denials:

Although the specific interest(s) that underlie a criminal history policy or practice will no doubt vary from case to case, some landlords and property managers have asserted the protection of other residents and their property as the reason for such policies or practices. Ensuring resident safety and protecting property are often considered to be among the fundamental responsibilities of a housing provider, and courts may consider such interests to be both substantial and legitimate, assuming they are the actual reasons for the policy or practice. A housing provider must, however, be able to prove through reliable evidence that its policy or practice of making housing decisions based on criminal history actually assists in protecting resident safety and/or property. Bald assertions based on generalizations or stereotypes that any individual with an arrest or conviction record poses a greater risk than any individual without such a record are not sufficient to satisfy this burden . . . .

 In most instances, a record of conviction (as opposed to an arrest) will serve as sufficient evidence to prove that an individual engaged in criminal conduct. But housing providers that apply a policy or practice that excludes persons with prior convictions must still be able to prove that such policy or practice is necessary to achieve a substantial, legitimate, nondiscriminatory interest. A housing provider that imposes a blanket prohibition on any person with any conviction record – no matter when the conviction occurred, what the underlying conduct entailed, or what the convicted person has done since then – will be unable to meet this burden . . . .

 A housing provider with a more tailored policy or practice that excludes individuals with only certain types of convictions must still prove that its policy is necessary to serve a “substantial, legitimate, nondiscriminatory interest.” To do this, a housing provider must show that its policy accurately distinguishes between criminal conduct that indicates a demonstrable risk to resident safety and/or property and criminal conduct that does not. A policy or practice that fails to take into account the nature and severity of an individual’s conviction is unlikely to satisfy this standard. Similarly, a policy or practice that does not consider the amount of time that has passed since the criminal conduct occurred is unlikely to satisfy this standard, especially in light of criminological research showing that, over time, the likelihood that a person with a prior criminal record will engage in additional criminal conduct decreases until it approximates the likelihood that a person with no criminal history will commit an offense . . . .

Section 807(b)(4) of the Fair Housing Act provides that the Act does not prohibit “conduct against a person because such person has been convicted … of the illegal manufacture or distribution of a controlled substance as defined in section 102 of the Controlled Substances Act (21 U.S.C. 802).”37 Accordingly, a housing provider will not be liable under the Act for excluding individuals because they have been convicted of one or more of the specified drug crimes, regardless of any discriminatory effect that may result from such a policy . . .

Because of widespread racial and ethnic disparities in the U.S. criminal justice system, criminal history-based restrictions on access to housing are likely disproportionately to burden African Americans and Hispanics. While the Act does not prohibit housing providers from appropriately considering criminal history information when making housing decisions, arbitrary and overbroad criminal history-related bans are likely to lack a legally sufficient justification. Thus, a discriminatory effect resulting from a policy or practice that denies housing to anyone with a prior arrest or any kind of criminal conviction cannot be justified, and therefore such a practice would violate the Fair Housing Act.

At first blush, it would appear that this Guidance practically mandates that the housing providers consider adopting much more nuanced criminal screening policies, ones that take many different factors into account, as this HUD Guidance effectively renders blanket denials for criminal history a thing of the past – with the specific exception of a conviction involving the manufacture or distribution of illegal drugs.  At a minimum, this Guidance should be considered required reading by both industry professionals and their respective legal counsel for Fair Housing Compliance and risk assessments moving forward.

Will Brownlee
Executive Director & General Counsel
AANCLogo

April 4, 2016 at 3:17 pm 1 comment

PTAA Goes to Washington

PTAA had several members travel to Washington on March 8-9 to participate in the National Apartment Association’s Capitol Conference. Since the House was not in session they met with the legislative staffs of Rep. Walker, Rep. Foxx, Rep. Adams and Rep. Meadows. In addition they were able to meet briefly with Senators Burr and Tillis, and then provide an in-depth briefing to their staffs on three issues of particular importance to the apartment industry:

Below are some pictures from PTAA’s day on Capitol Hill.

TillisWithNCDelegation_JonsPhone2 SenBurrTillis_NCDelegation_MaryGwynsCamera PTAAReps_WalkingThroughHouseTunnel PTAAReps_CyrusArtz_FoxxLA NCReps_BurrStaffMeeting BurrTillis_NCdelegation BurrTillis_Closeup AANCDelegation_BurrStaff

March 10, 2016 at 6:08 pm 1 comment

Support for the $2 Billion Connect NC Bond Referendum

The Piedmont Triad Apartment Association (PTAA) is supporting the Connect NC bond referendum that will appear on the March 15 ballot, and the reasons why were very well articulated by the Triad Real Estate and Business Industry Coalition (TREBIC) of which PTAA is a member:

The ($2 billion) bond is focused on the strength of our economic future: infrastructure, economic growth, and public education in the state of North Carolina.  These well-vetted projects are critical to economic development, and therefore the health of our industry as well.  There will be no tax increase due to NC’s financial strength and favorable interest rates and timing.

Relevant facts:

The Basics and Background

–     $2B Statewide Infrastructure Bond

–     Referendum March 15th

–     First statewide bond since 2000

–     Proactive investments in economic development/future jobs and emergency readiness

–     Impacts 73 counties directly, all 100 indirectly

–     No tax increase based on

  • NC’s strong financial position, low debt
  • Historically low interest rates
  • Lots of bonding capacity available, even after passage

–     Since last bond, NC has added 2 million people, so our needs are growing

–     Started at $6B from Governor

–     Lots of vetting to get to final project list

–     Ultimately won broad support from House, Senate, Democrats and Republicans

–     It won’t meet all needs, BUT there is no current debate on future or serial bond issues

What’s In The $2B Bond?

–     All projects are needs that can’t be met by annual operating budgets

–     New construction and renovation, but also deferred maintenance

  • $980M for Universities

–     Focus on Science, Technology, Engineering, and Math (STEM) buildings

–     New construction, renovation and repairs

  • $350M at 58 Community Colleges for new construction/repairs/renovations

–     40% of NC workers have attended a community college in the past 10 years!

  • $100M for Parks, including $25M for Zoo, with a focus on attracting visitors/economic impact
  • $3M for Disabled Children & Veterans parks infrastructure
  • $309.5M for Water & Sewer Competitive Grants and Loans

–     Utilities will have to apply to DENR

–     Expected focus is repairs and improvements to mostly rural, existing systems

  • $78.5M for 3 National Guard  & Pub Safety Centers, including 1 in High Point
  • $179M for Agriculture – largest single state investment ever in farms and agriculture

–     mostly at NCSU

  • new Plant Sciences Research Complex
  • Agriculture and Consumer Sciences Lab for veterinary, food, drug, and motor fuel testing
  • $349M (21%) In The Triad (plus possible Water & Sewer grants/loans)

–     $230M in Guilford County

  • NCA&T: $90M Engineering Building
  • UNCG: $105M Nursing School
  • GTCC: $9.5M for Medlin Admin Building Modernization
  • $23.3M High Point National Guard
  • $1.5M Haw River State Park

–     $119M in other 11 Counties

  • WSSU, Alamance CC, Davidson CC, Forsyth Tech CC, Randolph CC, Rockingham CC, Surry CC
  • State Parks: Hanging Rock, Mayo River, Pilot Mountain, NC Zoo

March 3, 2016 at 10:22 pm Leave a comment

Underlying Factors In the Housing Affordability Policy Debate

Ken Szymanski, the Executive Director of the Greater Charlotte Apartment Association, has written an outstanding piece on the underlying factors contributing to the housing debate in Charlotte, and many of them apply to us here in the Triad. Some key points are excerpted below, but you really should read the full piece here.

  • Moderate-, middle-, and upper-income households are served perfectly well by the dynamics of the marketplace. But low-income households cannot be served by the marketplace because their buying power is too low. That fact always has and always will generate social and political reactions, because those households are cost-burdened and have to deal with problems of housing quality and overcrowding…
  • At all levels of government—federal, state, and local—for many decades the political will has generally been lacking to materially increase this subsidy coverage of 25 percent. To quote Joseph Califano, a Cabinet secretary under President Jimmy Carter, “You can only go ‘so far’ at redistributing wealth.” We have not seen the political will to spend the money that would increase this materially. Regardless of who the HUD secretary was or whether the person in the White House was an “R” or a “D,” the appetite of elected or appointed officials—or the general public—is not there to go much over 25 percent…
  • State government has a role.  The N.C. Housing Finance Agency has been the state administrator of the federal Low Income Housing Tax Credit program.  The federal tax credit program was created in 1986 and generally aims to house those whose income is at or below 60 percent of the area median income level. 
  • The federal government has a role. Formerly, the role of the federal government was to fund public housing and provide below-market interest rate mortgages for multifamily rental housing. The role has been substantially diminished in recent years…
  • Inclusionary policy for new development/mixed-income housing has not attracted developers. Nearly three years ago, the Charlotte City Council approved a voluntary affordable housing “density bonus” for developers. If a developer wanted to build in affluent areas, the city would allow it to build extra units if it included some apartments or homes for low-income residents. But no developer has participated in the program, and the city may be starting over. A number of misconceptions underlie the city’s current inclusionary housing policy, including: a misunderstanding of the importance of return on cost in development feasibility; an overestimation of economies of scale in construction; a stereotype that private developers want to discriminate against poor people.

  • “Source of Income” civil rights issue. Somewhat akin to the inclusionary policy for new development are calls to mandate the acceptance of Section 8 (housing choice) vouchers in existing communities. Some advocates are attempting to make the market-rate rental sector shoulder a disproportionate burden of the city’s affordable housing crisis by making it “discriminatory” for a housing provider to elect not to participate in the voluntary Section 8 program. Making Section 8 voucher administration more market-like, not passing a state “source of income” statute, is the proper way to improve the workability of the federal government’s major housing assistance program.

February 19, 2016 at 3:07 pm 1 comment

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