The Section 8 Housing Choice Voucher program provides rental subsidies to approximately 2 million very-low income households who obtain housing in the private rental market. The basis of the program, which is to broaden the range of housing choices for families seeking affordable housing, has proven to be effective in helping low-income families find decent, safe and affordable housing.

House Financial Services Chairman Barney Frank (D-Mass.) said the Congressional Budget Office estimates that the legislation would save the government $20 billion over five years.

The bill addresses several issues of interest to multifamily builders. Specifically, the measure:

• Requires the U.S. Department of Housing and Urban Development (HUD) to translate official HUD documents and other papers commonly used by property managers that are considered “vital,” and to set up an 800 hotline number for oral interpretations under the newly launched Limited English Proficiency (LEP) Guidance.
•  Streamlines the unit inspection process by eliminating duplicative inspections and unnecessary delays, while ensuring that units continue to meet housing quality standards. This will encourage increased apartment owner participation.
• Provides important changes to the project-based voucher program to ensure its flexibility as a tool for preserving or expanding the supply of apartments affordable to low-income families in many communities, particularly those with a tight housing market.

NAHB is encouraging the Senate to introduce companion legislation. For more information, e-mail Scott Meyer or call him at 800-368-5242, x8144.

• Senate Panel Focuses on Issue of Carried / Promoted Interest

This week the Senate Finance Committee held the first of two hearings on the issue of so-called “carried interest.” Carried, or “promoted" interests, are income flows paid to private equity fund participants as a disproportionate share of the participant’s initial investment. They are generally associated with hedge fund managers, but promoted interests are also a common financing vehicle for payments to home builders, especially multifamily builders, for real estate joint ventures in which outside partners provided gap financing. Under present law, carried interests are taxed as capital gains income. However, many in Congress believe that such income should be taxed as ordinary income at higher rates because the income does not represent profit allocable to a capital interest. 

Two new pieces of proposed legislation are relevant to this issue. Senate bill S. 1624 would require corporate taxation of all Publicly Traded Partnerships. The bill is silent on the issue of carried interest. However, the two issues have become co-mingled since the introduction of House bill H.R. 2834. This bill is of much greater concern to the housing community.

The House bill would tax a carried interest at the ordinary income rate of 35% instead of the current capital gains rate of 15%. Clearly, this legislation would do significant damage to real estate development by disrupting real estate partnerships large and small, aside from the broader economic and community development implications. The House plans to hold hearings later in July.

To view the legislation, click here and type the respective bill numbers in the box in the center screen. For more information, e-mail Greg Brown or call him at 800-368-5242, x8421.

• Property Rights Bill Unveiled in House

A bill introduced in the House this week by Reps. Jim Sensenbrenner (R-Wisc.) and Maxine Waters (D-Calif.)  would prohibit federal, state and local governments from using the U.S. Supreme Court’s Kelo decision to condemn property, and it is very similar to legislation that passed the House last Congress by an overwhelming bipartisan vote of 376-38. The Kelo decision affirmed that taking property solely for economic development is a valid public use. 

The bill would continue to allow governments to use eminent domain for traditional public purposes, such as roads, schools, brownfield redevelopment,and utilities. It also attempts to protect the right of government to use eminent domain to “remove harmful uses of land provided such uses constitute an immediate threat to public health and safety,” which is intended to mean blighted areas. As with last year’s bill, NAHB is concerned that the “harmful uses” language is too narrow. For more information, e-mail J.P. Delmore or call him at 800-368-5242, x8412.

Step one in opposing this regulation was to enlist allies — in this case, Reps. Barney Frank (D-Mass.), Maxine Waters (D-Calif.), Michael Oxley (R-Ohio), and Spencer Bachus (R-Ala.), who all sent a letter to HUD asking the Department to withhold the proposed rule from publication, citing industry concerns. HUD agreed to comply, for now, but said it planned to go forward with the rule. HUD also agreed to take steps to relieve the burden on passive investors. This was clearly progress, but not enough.

NAHB followed up by speaking with legislators about the possibility of passing a law that would force HUD to suspend the 2530 electronic filing requirements until the passive investor concerns were addressed, and such a bill, introduced by Rep. Melissa Bean (D-Ill.), has since been passed in the House. A companion bill, introduced by Sen. Christopher Dodd (D-Conn.), also has been passed in the Senate.

HUD has since published guidance on revised filing requirements for passive investors, and also has published guidance on compliance with the House Bill. For more information on this ongoing effort, e-mail Claudia Kedda, or call her at 800-368-5242 x 8352. [return to top]

The agencies said that they were particularly concerned about the growing use of adjustable-rate mortgages (ARMs) “that provide low initial payments based on a fixed introductory rate that expires after a short period, and then adjusts to a variable rate plus a margin for the remaining term of the loan.

For more information on this and other new requirements for subprime lending, read the full story in Nation’s Building News. [return to top]

• Pillars of the Industry Awards Entries Open — Aug. 15

Enter your firm's wonderful development, great marketing, or individual achievement in the multifamily industry's most prestigious awards competition. Expect an announcement and a Web site link by August 15.

• Housing Credit Group Issues Forum — Sept. 5

“Clearing the Hurdles to Affordable Housing” is the theme for this year’s Issues Forum, to be held in Seattle in conjunction with NAHB’s Fall Board of Directors meeting. Expert speakers will address NIMBY attitudes and other concerns that can be a barrier to affordable housing. Anyone working with the Low Income Housing Tax Credit to build or finance affordable housing can learn strategies for clearing these hurdles and moving projects forward.
 
Members of NAHB's Housing Credit Group receive discounted registration to this event. For more information about HCG membership, please visit http://www.nahb.org/hcg and join today! To view an agenda and register online for the Issues Forum, visit this page.

• Sunbelt Builder’s Show, Featuring Multifamily Speakers — Sept. 27-29

The 2007 Sunbelt Builders Show™ will be held September 27–29 at the Gaylord Texan Resort & Convention Center in Grapevine, Texas/DFW. This year’s Show features two events designed specifically for the multifamily development community.  Start with an entertaining and valuable session on winning designs by Pillars Award-winners Stephanie Moore of Moore Design Group and Ron Harwick of James, Harwick + Partners Inc. These Dallas-based leaders in the multifamily industry will be sharing their wealth of design knowledge and experience. Don’t miss it on Thursday, September 27.

Then join colleagues for Sunbelt’s “Higher Densities, Higher Profits” Luncheon. Learn about innovative development solutions and marketing techniques from an expert, Spencer Stuart Jr. of Pillars Award-winning Legacy Partners Residential Development Inc. And don’t forget to visit NAHB’s Multifamily Council booth on the trade show floor!  To register for the Show and for more information, please go to http://www.sunbeltbuildersshow.com/.

• International Builders’ Show in Orlando — Feb. 13-16, 2008

Early Builders’ Show information and online registration are now available. The closest hotels fill up first, so register, and reserve your spot soon!

• New Resource on Warranties from BuilderBooks

Warranties for Builders and Remodelers, Second Edition gives builders, remodelers, trade contractors, suppliers and other industry professionals vital knowledge concerning the basic elements of a warranty so they can avoid costly mistakes and protect themselves and their businesses while simultaneously maintaining customer satisfaction.

The publication features:

• Clear explanations of implied warranties, statutory warranties, court-imposed warranties and more
• Sample language and formats for warranty documents
•  Your rights and responsibilities and the recommended practices and procedures
• Tips for drafting warranties that work
• State-by-state lists of cases and statutes applicable to construction claims

Written by NAHB’s legal experts and available from BuilderBooks.com, Warranties for Builders and Remodelers, Second Edition explains the rights, responsibilities and recommended practices and procedures for developing a warranty program.

• Dell Double Discounts End Soon!

NAHB members purchasing customized computer systems from Dell during the month of July can save up to 20% -- so view the Member Advantage site and click on the Dell symbol for details.

To maximize the Member Advantage Discount, use the following procedure: After you have made your selections and you are ready to purchase, call your dedicated Dell sales representative at 888-577-3355, Monday-Friday, 7:00 a.m.-8:00 p.m. (CT) and Saturday, 8:00 a.m.-5:00 p.m. (CT).  Your sales representative will apply your NAHB member discount to your order. NAHB members who have previously ordered from Dell also receive a monthly catalog, which includes this double discount offer.

Note: Double discounts do not apply to the preconfigured systems, which are already priced at up to 20% off.