- October 21, 2014
- October 16, 2014
- October 14, 2014
The federal, state and local policy issues impacting the apartment industry are numerous and wide-ranging, and affect how property owners and managers provide safe, affordable housing to 35 million Americans. The myriad of issues include bed bugs, taxes and fees, building codes, tax reform and more. Overarching these complex issues is the need for Congress to create a balanced housing policy that recognizes the critical role of apartments in providing shelter for Americans.
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Addressing the growing shortage of quality affordable housing for America’s workers is a top industry priority. An estimated shortfall of three million apartments exists nationwide. This number is only expected to worsen as the number of renter households increases. In many metro areas, regulatory barriers and compliance costs, construction costs and limited financing prohibit the private sector from constructing, rehabilitating and operating apartments at rents in line with workers’ earnings.
Legislation and regulations in diverse areas can influence the apartment industry’s strength and sustainability. Government action or inaction on issues can impact the day-to-day management of apartments by raising costs, adding liability risk and creating ambiguities with major legal and health implications. A burdensome regulatory environment increases costs and makes it more difficult for the industry to develop affordable housing solutions for underserved market segments such as America’s working class.
Ensuring consistently reliable sources of financing for apartments is a major industry issue. Apartment development is an extremely capital-intensive business and relies heavily on financing to operate. Today 300,000 new apartments are needed annually to meet demand; yet only 130,000 apartments were built in 2011. Policymakers must recognize our industry’s unique needs and retain the successful components of the existing multifamily programs in whatever succeeds the Government Sponsored Enterprises.
Meeting tomorrow’s housing demand requires a supportive legislative and regulatory framework. While codes, standards and best practices ensure the safety of our built environment, it is also critical to monitor the cost of implementation. Unnecessary and prohibitive increases to construction costs limit affordability. And with 77 million Baby Boomers who may be downsizing and nearly 80 million Echo Boomers beginning to enter the housing market, up to seven million new renter households could form this decade.
Energy and environmental policies are priority issues. Apartment owners have a significant business interest in reducing the energy costs of operating apartment communities and ensuring that housing remains affordable for residents. We believe in investing in the future through better building energy performance. Likewise, we seek to balance environmental stewardship and economic growth. Compared with other housing types, apartments are significantly more environmentally sustainable and resource efficient.
Supporting economic growth through sensible tax policy is critical. Lawmakers are calling for reform of the nation’s overly complex tax code to foster economic competitiveness and economic growth. Given that owners, operators and developers of multifamily housing pay taxes when they build, operate, sell or transfer communities to their heirs, a lot is at stake. The apartment industry favors pro-growth reform that does not disadvantage multifamily rental housing relative to other asset classes.