February 2019 Advocacy Update

We hold our monthly “Coffee with Your GADs” chat the first Tuesday of each month. This is your opportunity as a member to join our Government Affairs Directors for an informal discussion about policy and politics impacting the real estate industry and learn about CAR’s current advocacy initiatives. You can also share any news or trends that are of interest. Here’s what’s on our mind this February:

FEDERAL

Flood insurance

The Flood Insurance Program has been extended to May 31. It is likely we will be lobbying for long term reform during NAR’s Midyear meetings in Washington, D.C., in May. If there is another call to action on the NFIP, please answer the call. It takes two minutes and does make a difference.

Conforming loan limits

CAR and Illinois REALTORS® have sent a letter asking to increase conforming loan limits. Currently, Chicago has the same limits as cities in Indiana and Wisconsin. We’re looking to increase these limits in high-priced zip codes, in response to member feedback that there’s a stall here and higher conforming loan limits could help to create some churn. The recent government shutdown has delayed the response. Thank you to MRED for their assistance with the data used.

Tax reform

Chicago should be prepared to see a substantial reduction in what they think their deductions will be this year. We’re closely monitoring the local impact – and our ears are open. Remember: CAR lobbied NAR to include State and Local Tax Deductions in their package and fight for its inclusion- we now have it, but not the full value. The problem will also increase the further you go from the city, as the ring and collar communities pay more than we do in the city. The impact will most definitely be felt there.

Opportunity zones

NAR is starting to fall into line on Opportunity Zone discussion points – we are encouraging them to work immediately towards extending and furthering the zones, because right now, Chicago won’t get yield the same benefits other cities will simply because of our bureaucracy – by the time you get through the permitting, zoning, etc., necessary, the clock is ticking and you may not get your investment benefits. If you’re working on Opportunity Zone deals, please let us know – we want to understand more what the mechanics of those are looking like here in Chicago.

STATE

Rent Control

Rent control continues to be a big issue. Illinois REALTORS® worked closely with CAR and our members to put together the framework for a study on what the impact of rent control would be on Chicago’s market. A few findings:
  • Rent control would prohibit 185,000 units from increasing rent, seizing up this supply
  • Short term – owners will likely raise rents until new ordinance comes into effect
  • Long term – owners will sell or look to conversion to condos
  • Conversion is where most trend lines go
  • Inventory could go up, but pricing will go down. The tax base will go down, and taxes will have to go up again.
Check out AffordabilityforAll.com for talking points and more information.

Assessor’s tax assessment reform package

CAR is trying to meet with our new assessor, Fritz Kaegi, to talk over his proposed tax assessment reform package. We will keep you posted on that conversation.

Affordable housing tax credits

We believe that affordable housing tax credits could be a good path and solution for affordability issues in Chicago – stay tuned!

New legislative body

We have 50 new legislators in Springfield. Want to get involved? Email Brian. We’d love the support!

LOCAL

Transfer tax ballot initiatives

The good news on the recent transfer tax ballot initiatives is that they’ve missed the deadlines for February and April, so these are on hold for now. We will keep you posted on any developments.

Building code rewrite

CAR is actively involved in the building code rewrite, and this is an initiative Mayor Emanuel is trying to get finished prior to leaving office. The electrical rewrite is done; plumbing is coming and life safety is on the horizon. The good news in terms of life safety is that there seems to be no consensus for a mandatory retrofit. We are also seeing some traction on conversations regarding the conversion of garden and basement units into affordable housing, and pre-fab housing has also been identified as a potential opportunity there.

Alienage proposal

The alienage proposal on the table, prohibiting discrimination on the basis of immigration status, has stalled for now. Learn more about what this could entail.

Aldermanic prerogative

Aldermanic prerogative has been a hot topic in the news lately – we still don’t know where we’re at on this. It will depend on the upcoming elections, and whether the new mayor is pro-development or not. Aldermanic prerogative could keep development happening if the mayor’s office is less friendly to development.

New Zoning Chairperson

CAR was instrumental in getting James Cappleman, the new Chair of the Zoning Committee, elected; but keep in mind that the chairman today won’t be our chairman tomorrow. With the upcoming elections, things are going to change – this is a fairly unstable moment in Chicago’s political history and everything is up for grabs. Stay tuned.

Pet registry

Are you a pet-friendly property management company or rental owner? Sign up for our database of pet-friendly buildings.

Elections

Get out and vote – every vote counts and the results will impact you, your community and your industry.

Register for upcoming Coffee with the GADs.