Last week, Realtors from Citrus and surrounding counties went to Washington, D.C., to represent their communities with the legislatures. Some of our major talking points with legislators were:
Equal access to housing opportunities
2018 is the 50th anniversary of the Fair Housing Act. Fair housing is critical to our ability as Realtors to serve our clients, consumers and communities.
We are committed to action and policies that support sustainable, inclusive communities without discrimination based on race, color, religion, sex, disability, familial status, sexual orientation, gender identity or national origin.
For more than 100 years, Realtors have subscribed to a strict Code of Ethics. This code includes a commitment to provide equal professional services regardless of race, color, religion, sex, disability, familial status, national origin and, as of 2009, sexual orientation and in 2014, gender identity.
Realtors are proud to lead the way toward greater equality in housing opportunities and urge Congress to adopt fair housing protections (H.R. 1447) based on sexual orientation and gender identity.
Implement condominium rules
Realtors secured a significant victory in Congress in 2016 with legislation to ease the Federal Housing Administration’s (FHA) condominium rules; however, the Department of Housing and Urban Development (HUD) has yet to implement these changes. Current FHA rules require that no less than 50 percent of condominium units are owner occupied.
Freddie Mac and Fannie Mae have no such restriction when the home is being purchased as a principal residence, which all FHA borrowers are required to be.
Since FHA reviews the financial health and reserves of the property to ensure they meet FHA requirements, owner-occupancy ratios should be irrelevant. FHA also limits commercial space to 25 percent of the property. The popularity of “town center” developments and multi-use properties makes many newer buildings ineligible for FHA.
Under the current rules, parking garages count as commercial space and can greatly skew the ratio. FHA docs allow waivers, but they are rarely granted.
The current certification process is very time consuming and expensive. Approval lasts two years and takes approximately six months to achieve. The current recertification process is no different from the initial certification — requiring condominium associations to go through the laborious and expensive certification process every 18 months.
This discourages many properties from applying for approval. Congress must urge HUD to implement changes to FHA’s condominium restrictions as mandated by the Housing Opportunity Through Modernization Act of 2016, Public Law No. 114-201.
National Flood Insurance Program
The NFIP was created to provide incentives for communities to rebuild to higher standards and steer development away from flood zones. In exchange, communities gain access to flood maps, mitigation assistance and subsidized insurance to prepay for future damage and recover more quickly from flooding. However, the program was not designed to absorb catastrophic loss years including 2005 (Katrina), 2012 (Sandy), 2016 (Baton Rouge) and 2017 (Harvey, Irma and Maria). As a result, NFIP has borrowed $36 billion from the U.S. Treasury since 2005 and is making interest-only payments of approximately $400 million a year.
NFIP’s last full reauthorization expired Sept. 30, 2017. So far, there have been six stopgap extensions since then and one shutdown lasting three days. Last time the program was up for reauthorization in 2008, it took 17 extensions and a two-month shutdown, scuttling an estimated 40,000 real estate closings per month before Congress was able to reauthorize NFIP in 2012.
Realtors urged not to have the NFIP lapse. By passing the House Flood Reform Bill (H.R. 2874) would fully reauthorize the program for five years. Without reauthorization, NFIP cannot issue or renew policies in 22,000 communities where flood insurance is required for a mortgage. And, the Senate should take up and amend the House bill to strengthen the flood mapping and mitigation, but retain key provisions including the private market and NFIP-rate reforms.
Since its inception, our income tax system has recognized the favorable effects of homeownership for families, communities and society by incentivizing homebuyers with tax benefits. The result is a home-owning society that is the envy of the world. However, certain features of our tax system partially nullify not only the tax incentives of homeownership, but also insidiously and unfairly harm both current and future taxpayers by eroding present benefits. The Tax Cuts and Jobs Act, enacted in December 2017, made significant changes to the treatment of residential real estate. Some of the potentially harmful provisions were not enacted. As we move toward implementation of the law, it is clear that Congress has more work to do to address significant tax law problems that unfairly inhibit current and prospective homeowners.
Congress has not yet extended the mortgage debt forgiveness exclusion; this leaves homeowners with short sales in 2018 and beyond vulnerable to paying tax on forgiven mortgage debt. This provision has given vital financial relief to many millions of distraught homeowners who found themselves devastated by not just a reduction in their home equity, but another crisis such as a job loss or family illness that caused them to have to sell their home short, default on their loan or go through a restructuring with their lender. This temporary provision has once again expired, as of Dec. 31, 2017. Congress needs to be proactive by supporting legislation (H.R. 110) to make this vital relief a permanent part of our tax law.
The Department of Environmental Protection has since created two Basin Management Action Plans (BMAPs) within Citrus County — King’s Bay and Chassahowitzka-Homosassa. After years of studying these two water bodies, they identified specific priority focus areas (PFAs) crucial to their environmental health. Within those PFAs, it was identified that onsite treatment and disposal systems, such as septic tanks, are some of the biggest contributors to the high nutrient levels.
For parcel owners within a PFA that are building new construction on an acre or less of land, you will first need to figure out if you have the availability to connect to central sewer. If you can’t, but you know that sewer will be coming to you soon, then you can install a conventional non-nitrogen-reducing system, but will be required to connect to sewer once it is available. If a sewer is not scheduled for your area, then you will need to install a nitrogen-reducing onsite treatment and disposal system, such as an in-ground, passive nitrogen-reducing system. These systems use additional soil and media layers to reduce nitrogen flow to the aquifer. There are also options of aerobic treatment units and performance-based treatment systems; however, those are much more expensive.
The Department of Health lays all this information out in a recent communication they issued, which can be found at www.floridahealth.gov/environmental-health/onsite-sewage/_documents/letter-to-builders-springs.pdf. It is a lot to take in, but there is a number to call if you have questions.
Cheryl Lambert — legislative chair for the Realtors Association of Citrus County — is the broker/owner of the Only Way Realty Citrus. She is a past president of the Realtors Association of Citrus County in 2013, past District 7 vice president of Florida Realtors in 2014 and is currently Florida Realtors 2018 treasurer. She is an active broker/owner who specializes in affordable/attainable housing and is active in legislative issues surrounding this topic.