Advocacy Update

Forrest WallWritten by Forrest Wall, CAE, Staff Vice President, and Industry Relations

Senate Passes First Apartment Inspection Reform Bill

The Michigan Senate, on a 38-0 vote, passed Senate Bill 394 in early November. As you may recall from my previous communications, SB 394 is the first in a set of bills to reform the law covering municipal inspections of rental property. Introduced in June by Senator David Robertson (R-26th District), SB 394 proposes to amend the Housing Law of Michigan to include townships under the law so they are governed in the same way as cities and villages, as well as mandate that inspection fees shall not be required more than six months in advance of the inspection. Additionally, the legislation removes the language mandating that a municipality inspect multifamily rental property, and replaces it with language stating that inspection is at the local government’s option, except in cases where there is a tenant complaint. The bill now heads to the Michigan House of Representatives for consideration, beginning with a hearing before the House Local Government Committee. The second bill in the series will address the resident right of permission for local government entry to inspect, with an expected introduction before year-end.

Carried Interest Legislation at the Forefront Again

Over the last several years, debate has raged in the United States Congress about the treatment of carried interest in the tax code, with many demonizing it as a loophole designed to make the rich richer. Currently taxed as a capital gain, critics have argued that it should be taxed at the much higher ordinary income rate. The rationale used by advocates for change has been that the current treatment of carried interest unfairly benefits Wall Street hedge fund managers and private equity. As we know however, a change in this tax would more directly impact real estate developers, with the effect of dampening investment in residential and commercial projects. The latest effort to change the rate on carried interest is being led by Congressman Sander Levin, with the introduction of the Carried Interest Fairness Act of 2015. AAM will continue to work with the National Association of Home Builders and other real estate groups to oppose this legislation.

 

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