Three Big Issues IREM Will Take to Capitol Hill

Next Wednesday IREM is headed to Washington, DC, for its 18th annual Capitol Hill Visit Day, held in conjunction with its yearly Leadership and Legislative Summit. Gaston & Wilkerson Management Group CEO Don Wilkerson, who’s also an IREM SVP assigned to public policy, tells us the top three issues on its docket:

Like-kind exchanges, which allow investors to defer paying capital gain taxes if they reinvest the proceeds from a property sale into a similar asset, may be on the chopping board, Don (above) tells us. Rep. Paul Ryan (R-WI) has proposed eliminating the 1031 transactions as he leads the charge with a tax-reform package. “This hurts both real estate investors and the economy,” says Don. He notes that these transactions allow flexibility in managing assets, and if the properties have been held for a number of years, they can’t be sold without significant tax implications, often wiping out all profit. “Without the ability to defer the taxes, these properties simply won’t be marketed…exchanges stimulate the economy and revitalize property.” Should this happen, he says, experts have predicted a downturn similar to the one experienced after tax reform in the ‘80s.

While Section 8—the US Department of Housing and Urban Development’s apartment voucher program for low-income residents—is a valuable service, many apartment owners are shying away from participating because of the hassle that comes along with it, Don says. “It’s an onerous process, and IREM would like to see it streamlined and cleaned up. Make it less of a full government program and more compatible with the private sector.” Above, IREM members in Washington, DC, at last year’s Legislative Summit.

Many of IREM’s members manage shopping centers, and brick-and-mortar stores are being hurt by people shopping online to avoid paying sales tax, Don says. “You even have customers going so far as to visit Best Buy, handle and compare products, then go home and order them on the Internet,” he says. The act—which requires states to simplify their sales tax laws in order to make multi-state sales tax collection easy—will make the playing field more level between online and physical retailers. The act has also received wide support by IREM affiliate National Association of Realtors and the International Council of Shopping Centers, he says.

Above, IREM president and Eugene Burger Management Corp director Lori Burger speaks at last year’s event. Don hopes these docket items follow the success of the Terrorism Risk Insurance Act (TRIA) extension, which IREM lobbied for last year and was signed on Jan. 12. Don, who’s based in Nevada, says Sen. Dean Heller (R-NV) co-sponsored the bill with Sen. Chuck Schumer (D-NY) and encouraged IREM’s local chapters to write letters of support for TRIA’s extension. He tells us that IREM’s Leadership and Legislative Summit will also include a keynote from Rep. Steve Stivers (R-OH, 15th District), a “champion of the commercial real estate industry”; a roundtable with Bentall Kennedy US CEO Mike McKee and DTZ chief of the Americas Joe Stettinius; and a featured session on handling crises as a property manager.