The Institute of Real Estate Management (IREM), strongly committed to legislative advocacy, helped to generate significant legislative results in 2012 of benefit to its members, other commercial real estate professionals and allied interest groups. Among the most notable of these victories, some achieved in collaboration with the National Association Of Realtors (NAR) and other groups, are these:
- Lease Accounting – IREM has strongly opposed proposed changes that would require businesses to recognize assets and liabilities arising from lease contracts, certain that they could lead to bloated balance sheets and a host of other potential problems. These changes differ from current regulations that allow leases to be considered operating expenses that do not appear on balance sheets.
During a visit by 265 IREM Members to Capitol Hill last April, the members took the accounting issue to their elected officials. Specifically, they requested that their legislators sign onto a bipartisan lease accounting “Dear Colleague” letter, which encourages the Financial Accounting Standards Board (FASB) to complete a comprehensive and detailed economic impact study to better understand the major implications of the new lease accounting proposal. Following the meetings, 61 Congressional members signed onto the letter. In June of 2012, FASB and the International Accounting Standards Board (IASB) discussed a new proposal which is expected to be released in 2013 that potentially may be more reasonable.
- Carried Interest – The carried interest issue has long been on IREM’s radar screen. In addition to participating in a coalition monitoring potential changes to carried interest policy, IREM Members lobbied this issue on Capitol Hill in April. Members urged Congress to vote against any legislation that would change tax rates in ways that may discourage future commercial real estate investment, particularly in an already fragile market. IREM was successful in heightening legislators’ awareness of this issue and keeping carried interest rates unchanged throughout 2012.
- National Flood Insurance Extension – IREM strongly supported the extension of this vital program, an extension which President Obama signed into law effective through 2017. This is a multifaceted victory for homeowners, businesses, banks and real estate professionals for it assures coverage, where necessary, to obtain a mortgage.
- Marketplace Equity Act – IREM has been advocating for more equitable sales tax policies, such as the Marketplace Equity Act (H.R. 3179 and S. 1832). This legislation would simplify and streamline the tax collection process for online retailers. Many online retailers have an unfair advantage in that their tax collection is not required or regulated, while brick and mortar stores must charge and record a sales tax. This inequity encourages consumers to buy more products online, ignoring physical establishments. Last spring, IREM Members lobbied Congress on this issue. As a consequence, they helped to secure at least five new co-sponsors to proposed legislation by the House of Representatives supportive of IREM’s position. Additionally, they motivated many more members to take interest in the issue.
- Lead-based Paint in Commercial Buildings – This issue has long been a concern to IREM and its membership. In 2012, IREM and the coalition it joined were successful in stalling any movement to finalize and implement new rules for lead-based paint dust in commercial buildings. The U.S. Environmental Protection Agency has until December 31, 2016 (moved back from an original date of February, 2014 for paint on the exterior of a building) to finalize regulations to address lead-paint dust. IREM will continue to fight for fair and reasonable regulations for commercial and multifamily real estate management.