Posted June 17, 2019

Last week saw multiple pieces of legislation receive consideration.

House Bill 131 “Repeal Map Act.” received final approval by the Senate on Wednesday. It has now been sent to the Governor for his signature. As we discussed last week, this legislation would formally repeal the state’s Map Act which has been in place for more than thirty years. Enacted initially to give the Department of Transportation the ability to identify land to be used in future transportation corridors, it has been found to have been used to hold lands in perpetuity with no just compensation to the property owner nor actual projects being scheduled/funded. If approved by the Governor, this will be a significant win for property rights in North Carolina.

Senate Bill 573 “Revenue Laws Clarifying & Administrative Changes” received a favorable report from the Senate Finance  and Senate Rules committees this week. Included in this 41-page bill are additional clarifications to the repair, maintenance, and installation (RMI) tax requirements in response to our advocacy on behalf of residential and commercial property managers. The legislation exempts certain RMI from taxation when performed by a property management company and clarifies when the taxes are required to be collected. Specifically, the bill  requires property management companies to charge and remit RMI sales tax only in the following circumstances:

1. They provide repair, maintenance, installation services for an additional charge above what is stated in the management contract.
2. They arrange for a third party to provide the repair, maintenance, and installation services and impose an additional charge for arranging these services.
3. More than twenty-five percent (25%) of the time spent managing an individual real property during a billing or invoice period is attributable to taxable repair, maintenance, and installation services. The property manager can voluntarily provide a written affidavit to attest that no more than 25% of their services on a given property constitute taxable RMI services, which would clear them of liability for taxation on any portion of the contract amount.

Posted on June 10, 2019

On Monday, June 3, 2019, proposed fee changes were presented to the Cabarrus County Board of Commissioners by the Director of Planning and a consultant that assisted with the fee study.  Along with changes in the cost of permit fees, staff is proposing changing new construction permits to a single permit (blanket permits).

On June 19, 2019, Cabarrus County Planning staff is inviting builders to come to an open session from 1-3pm in the Multi-Purpose Room at the Cabarrus County Governmental Center.  During this session staff will discuss why these fees are being proposed, give examples of how fees are charged now, and what the fees would be if adopted as proposed.  Staff will be able to answer any questions and hear any feedback that you have. 

Wednesday, June 19, 2019
1:00 PM to 3:00 PM
Cabarrus County Government Resource Center - Multipurpose Room
65 Church Street S.
Concord, NC 28025

Posted on June 10, 2019

On Monday, June 3, 2019, proposed planning and zoning fee changes were presented to the Cabarrus County Board of Commissioners, based on a recent study evaluating the potential to move to a full cost-recovery model. Along with changes in the cost of permit fees, staff is proposing changing new construction permits to a single permit (blanket permits).

On Wednesday, June 19, Cabarrus County Planning staff is inviting builders to come to an open session from 1-3 p.m. in the Multi-Purpose Room at the Cabarrus County Governmental Center.  During this session staff will discuss why these fees are being proposed, give examples of how fees are charged now, and what the fees would be if adopted as proposed.  Staff will be able to answer any questions and hear any feedback that you have.

Cabarrus County Development Fee Meeting

Wednesday, June 19

1:00 PM to 3:00 PM

Cabarrus County Government Resource Center – Multipurpose Room

65 Church Street S.

Concord, NC 28025

*It is very important that we have a strong showing at this meeting with staff*

 

Posted on May 5, 2019

A significant number of Mecklenburg County property owners will see an increase in their tax bill this year under a budget proposal unveiled recently by County Manager Dena Diorio, which would adopt a tax rate almost 2 cents, or 3.3 percent, above revenue-neutral.

With an average property value increase of more than 50% following a countywide revaluation, the tax rate at which the County would collect the same amount of total revenue (known as the ‘revenue-neutral’ rate) is 59.7 cents per $100 of assessed value. The manager’s budget proposes a rate of 61.69 cents per $100, or 1.99 cents above revenue neutral. The impact of the higher rate means more than 65% of all Mecklenburg County homeowners, and more than 71% of all commercial property owners, will see higher tax bills this year.

Posted on April 30, 2019

The City of Charlotte is considering revisions to its Noise Ordinance that would allow the Charlotte-Mecklenburg Police Department (CMPD) to designate specific construction sites as 'chronic noise producers' and require a the creation of a formal plan to mitigate noise impacts on surrounding neighborhoods.

The changes, approved last week by City Council's Neighborhood Development Committee, are part of an extensive update of the 2011 Noise Ordinance, which also include the creation of noise buffers around schools, churches or health care facilities, and tighter restrictions on the use of amplified sound. In addition to giving CMPD the authority to make the chronic noise designation, the ordinance would create escalating fines for repeat violations and add specific examples of construction equipment for greater clarity.

The  proposed Noise Ordinance changes are available on the City's website. REBIC will be reviewing the ordinance with our general contractor members in the coming weeks to determine how to address the proposed changes.

Posted on April 23, 2019

The Charlotte City Council unanimously approved a new Transit-Oriented Development (TOD) Ordinance, which sets standards for commercial and residential development in the city’s light rail corridor.

REBIC and our members worked closely with City planning staff on the ordinance over the past 18 months, and we are generally pleased with the final product. Many of our suggestions — from changes in maximum parking ratios to additional development incentives — were included in the final draft adopted by Council last week. Our only remaining significant concern remains the 130′ building height limitation, which can only be exceeded through the use of a bonus point system that encourages affordable housing investments, energy efficient construction, or the contribution of offsite infrastructure.

While we support each of these policy goals, we believe City Council should do everything possible to encourage density in our transit corridors, and not restrict itself from considering economic development opportunities that would otherwise be limited by the building height caps in each TOD district.

Click here to read more.

Posted on April 8, 2019

Mecklenburg County LUESA is proposing dramatic increases to its Land Development, Zoning and Floodplain Permitting Fees for FY 2020, as it seeks to end a longstanding practice of supporting Land Development Services with excess stormwater fee revenue.

The proposed increases, combined with the elimination of two vacant stormwater positions, will allow Land Development Services to cover 100% of its operating costs, says Land Development Director Dave Canaan. With the Town of Huntersville starting its own land development permitting operation this summer, the County's Land Development Services division will handle projects in the five remaining towns and the ETJ. The City of Charlotte charges separate fees for land development permitting within its boundaries.

Both REBIC and the Greater Charlotte HBA have voiced our strong opposition to the proposed fees (listed below), which represent year-to-year increases of nearly 200% in some cases. Fees for multi-year projects will be phased in over two years, and new fees will be implemented for re-inspections and re-reviews of development plans.

Click here to read more.

Posted on April 1, 2019

Lawmakers return to Washington, D.C., this week after spending time in their districts. Several measures have been introduced that are important to NAIOP and commercial real estate. The Carried Interest Fairness Act of 2019, introduced in the House by Rep. Bill Pascrell (D-NJ) and in the Senate by Sen. Tammy Baldwin (D-WI), aims to treat certain income currently taxed at the capital gains rate as ordinary income. This would be a major change, since the top capital gains rate is 20 percent and the highest rate on ordinary income is 37 percent.

Less than two years ago, Congress passed the Tax Cuts and Jobs Act of 2017 (TCJA), a law that NAIOP strongly supported. Lawmakers recognized that taxing carried interests at a lower rate than ordinary income provides the necessary incentive for entrepreneurs to undertake risks inherent in development. The provision was therefore kept in place in the new tax law, though a new three-year holding period was imposed. The three-year holding period was intended to ensure that “carried interests” were used primarily for longer-term capital assets.

NAIOP has opposed changes to the taxation of real estate carried interests, and is working with its real estate allies to educate lawmakers in both the House and Senate on the changes already made to carried interest taxation.

Posted on March 22, 2019

The House Ways and Means Committee will hold a hearing on Wednesday to discuss what the committee calls: “Our Nation’s Crumbling Infrastructure and the Need for Immediate Action.” The committee handles federal spending matters and is chaired by Rep. Richard Neal (D-MA).

The availability of modern and efficient infrastructure systems is a major factor in real estate development and investment decisions. The success of commercial real estate projects is largely dependent on access to quality roads, ports, rail and other infrastructure systems. Improving the nation’s infrastructure is one of NAIOP’s 2019 legislative priorities, and building the infrastructure the country needs will require federal investment.

In last month’s State of the Union Address, President Donald Trump said that infrastructure is an area that may be ripe for bipartisan cooperation. Rep. Peter DeFazio (D-OR) announced that he also hopes the parties can work together. “We face a $1 trillion surface transportation investment gap over the next 10 years to fix the infrastructure we have, meet future needs, and restore our global competitiveness,” he said in a news release. “Any serious infrastructure proposal must provide sustainable, long-term federal funding so we can make these necessary investments, create millions of living-wage American jobs, increase economic growth, and decrease congestion and emissions.”

Posted on February 26, 2019

The Charlotte Planning Department late last week released a revised draft of its proposed Transit-Oriented Development (TOD) Ordinance, ahead of a March 18th public hearing.

REBIC is in the process of reviewing the ordinance, which is available for download HERE. We strongly encourage any developers considering projects in the City's transit corridors to look through the draft and provide us with any feedback you may have.

Some of the changes in the new draft include:

Posted on February 19, 2019

With a Friday deadline looming, lawmakers in Congress say they have reached a deal on a spending bill that would keep the government open for the rest of the fiscal year. Without an agreement, funding for about a quarter of the federal government would run out on Feb. 15.

The spending agreement would reportedly include some $1.3 billion for barriers on the U.S.-Mexico border. That’s far less than the $5.7 billion that President Donald Trump had been demanding.

During NAIOP’s annual Chapter Leadership and Legislative Retreat in Washington, D.C., last week, keynote speaker Bret Baier of Fox News suggested a compromise. Baier said Trump probably will not get a physical “wall” on the border, but could get increased funding for border security. He predicted that might be enough for Trump to declare a win on the issue.

Posted on February 14, 2019

Members of the Charlotte Chapter of NAIOP traveled to Washington, D.C., last week to meet with members of Congress about issues critical to North Carolina’s commercial real estate industry. The Capitol Hill visits were part of NAIOP’s annual Chapter Leadership and Legislative Retreat, and gave Charlotte developers a chance to advocate on a range of topics, including:

• Establishing a reasonable cost recovery period for qualified leasehold improvements;
• Advocating for increased federal investment in our national infrastructure, including roads, ports and bridges; and,
• Encouraging Congress to incentivize energy-efficient construction without imposing new mandates.

During the course of the day, NAIOP members met with Senator Thom Tillis and congressmen Richard Hudson and Patrick McHenry. Thanks to those NAIOP members who took time out of their busy schedules to advocate for commercial real estate priorities on Capitol Hill!

Posted on February 13, 2019

State legislation passed last month at the conclusion of the 2018 session of the General Assembly means redevelopment sites in Charlotte are no longer required to include on-site stormwater controls if no additional impervious surface is created. A provision in SB 469, a Technical Corrections bill initially vetoed by Governor Cooper but ratified through a legislative override, specifically mandates the change to local stormwater ordinances, regardless of where a local government obtains its regulatory authority.

While a redevelopment exemption for stormwater has been state law for years, the City of Charlotte has previously required controls on all projects, citing its adherence to a federal NPDES stormwater permit that called for higher local standards. REBIC has long argued that stormwater controls should not be required on redevelopments where no additional impervious surface is created.

The provision in SB 469 also allows development within a vegetative buffer, as long as the runoff from the entire impervious area of the project is collected, treated, and discharged through a portion of managed vegetative buffer. Of course, stormwater controls will continue to be required on sites whenever additional impervious surface is created.

Posted on January 28, 2019.

Originally posted by REBIC.

The Treasury Department and the Internal Revenue Service issued final regulations regarding the new 20 percent deduction on qualified business income. As Americans begin preparations for the 2018 tax filing season, real estate professionals have been uncertain about the true impact of the 2017 Tax Cuts and Jobs Act on their respective businesses. Friday’s ruling from Treasury and the IRS, however, signaled a significant victory for the real estate industry and for many of the National Association of Realtors®’ 1.3 million members.

“Friday’s ruling is a result of several months of advocacy and collaboration between NAR, our members, and the administration,” said NAR President John Smaby. “These final guidelines will allow real estate professionals to benefit from the Section 199A 20 percent pass-through deduction, a move that will empower Realtors® to expand their operations and provide improved services to consumers and potential homebuyers across the country. The National Association of Realtors® is grateful for the openness and transparency encouraged by Treasury and the IRS, and we thank them for their hard work to ensure the real estate community was heard throughout this rulemaking process.”

Posted on January 28, 2019.

Originally posted by REBIC.

The 2019 Mecklenburg County Property Revaluation is complete, and property valuations are now online at the Assessor’s website.  Look for your Notice of 2019 Real Estate Assessed Value in your mailbox in late January 2019, and remember that this Notice is NOT a bill. Your property tax bill will be determined by the tax rates adopted by Mecklenburg County and the City of Charlotte later this year (probably around July).

You can also use the tools on the County website to file an informal appeal if you think your property has been improperly valued. If you disagree with the results of your Informal Review Request, you have a right to file a Formal Appeal to the Board of Equalization and Review. You may request an appeal any time prior to the adjournment of the Board of Equalization and Review or within 30 days of your Notice of 2019 Assessed Value. All requests for appeal must be made in writing and on the proper form.

Posted on January 17, 2019

The new Congress in Washington, D.C., features plenty of new faces, with Democrats controlling the House of Representatives for the first time since 2010. But the new class will be dealing with some old problems as 2019 begins. 

Most of the government was funded before the start of the 2019 fiscal year, which began in October. Yet 25 percent of the federal government remains shut down after lawmakers and President Donald Trump couldn’t agree on a spending deal. Trump insists he wants $5 billion to fund a wall along the Mexican border, which Democrat lawmakers are refusing. The president says the shutdown could last for “months or even years.” 

Also, the lame duck Congress failed to address some technical mistakes it made when writing the 2017 Tax Cuts and Jobs Act. For example, when they were writing the bill, lawmakers wanted to allow real estate businesses to depreciate Qualified Improvement Property (usually expenditures associated with interior tenant improvements) over a time span of 15 years. Instead, because of a drafting error, the law as written imposes a 39-year depreciation schedule. 

NAIOP is part of a coalition encouraging the administration and lawmakers to fix that mistake. Congressional lawmakers in both parties acknowledge the mistake and want it fixed. Before the outgoing Congress wrapped up, former House Ways and Means Committee chairman Kevin Brady released a draft reform bill for discussion. The new chair of the committee, Richie Neal (D-MA), says he wants to hold hearings to discuss the tax law. But making any technical corrections will require passing a new law, and it isn’t clear when that might happen.

Posted on January 15, 2019

The City of Charlotte has set a February 25th Public Hearing date for a new Transit-Oriented Development (TOD) Zoning Ordinance, despite a key Building Height Bonus provision still undergoing revision.

REBIC and other industry groups have worked with City staff on the draft for more than a year, as part of a comprehensive stakeholder review process that has seen a number of restrictive provisions pared down or eliminated. But the Building Height Bonus provision, intended to encourage the construction of Affordable Housing units along transit corridors, was only unveiled on December 13th, and has yet to be modeled for effectiveness.

The Height Bonus, which is designed to advance City policy priorities such as affordable housing, open space preservation and sustainability, will give developers the opportunity to amass points that can be used to increase their building height. It would allow buildings to rise as high as 300′ in the highest-density TOD district when the maximum amount of points are obtained. Developers would also be able to increase their building height by paying a fee-in-lieu that that would go into the city’s Housing Trust Fund.

Click here to read more.

State legislation passed last month at the conclusion of the 2018 session of the General Assembly means redevelopment sites in Charlotte are no longer required to include on-site stormwater controls if no additional impervious surface is created. A provision in SB 469, a Technical Corrections bill initially vetoed by Governor Cooper but ratified through a legislative override, specifically mandates the change to local stormwater ordinances, regardless of where a local government obtains its regulatory authority.

While a redevelopment exemption for stormwater has been state law for years, the City of Charlotte has previously required controls on all projects, citing its adherence to a federal NPDES stormwater permit that called for higher local standards. REBIC has long argued that stormwater controls should not be required on redevelopments where no additional impervious surface is created.

The provision in SB 469 also allows development within a vegetative buffer, as long as the runoff from the entire impervious area of the project is collected, treated, and discharged through a portion of managed vegetative buffer. Of course, stormwater controls will continue to be required on sites whenever additional impervious surface is created.

Thanks are due to the North Carolina Home Builders Association (NCHBA) and State Representative Dean Arp (R-Union) for their support of this critical legislation!

Posted on December 11, 2018

Lawmakers return to Washington, D.C., this week to continue their post-election lame-duck session. It isn’t clear exactly what issues they will deal with, but taxes and spending are major concerns.

One key issue that NAIOP continues to focus on is the need to fix some clerical errors in the 2017 tax reform bill. NAIOP is part of a group of hundreds of organizations and businesses pressing for a technical corrections law. This would require a majority in the House and at least 60 votes in the Senate, so it would need to be bipartisan. Lawmakers on both sides of the aisle have indicated they understand the need for action on at least one issue: Qualified Improvement Property.

Lawmakers also face a December 7 deadline to fully fund the federal government. They passed, and President Donald Trump signed, a partial budget in September, just before the 2019 fiscal year began. Time is of the essence when it comes to completing the spending bill, as there are only about 12 legislative days available in the lame-duck session.

Posted on November 7, 2018

President Donald Trump and Republican lawmakers are promising to pass legislation to deliver further tax relief for the middle class.

“Business will not enter into it, and this will be on top of the tax reduction that the middle class has already gotten, and we’re putting in a resolution probably this week,” Trump told reporters in the Oval Office last week.

Lawmakers are out of session until after Election Day, Nov. 6. Rep. Kevin Brady, chair of the Ways and Means Committee, said, “We will continue to work with the White House and Treasury over the coming weeks to develop an additional 10 percent tax cut focused specifically on middle-class families and workers, to be advanced as Republicans retain the House and Senate.” Brady also hinted Republicans may cut government spending if they retain the House.