CCIMs Shape Policy
While we have watched Wall Street and auto industry executives ask the U.S. Congress for financial bailouts, the commercial real estate industry continues to suffer from its own paralyzing crisis. The severity of the capital markets freeze gives new urgency to our annual Capitol Hill visit. On April 22, CCIM members can meet with policymakers to talk about commercial real estate issues. Read the “Join CCIMs” sidebar to find out how you can participate in this year’s visit.
The institute’s role as a legislative advocate for the commercial real estate industry is a vital CCIM member benefit. Through its affiliation with the National Association of Realtors and its partnership with the Institute of Real Estate Management, CCIM Institute is part of a team that constantly monitors legislative and regulatory developments to shape the direction of today’s policy issues.
In this role, the institute must offer not only opinions but solutions to the current crisis. To that end, institute Chief Executive Officer Jonathan Salk and I went to Washington, D.C., in December 2008 to attend the NAR economic stimulus work group, which included representatives from various commercial real estate organizations.
Prior to this meeting, the CCIM and IREM legislative committees were asked what a second economic stimulus package should include to stabilize commercial real estate markets. Members of both groups felt that three key provisions — small business loans, short-term loans for capital improvements, and refinancing for mortgages — should be included in the stimulus package. Based on this member input, the CCIM/IREM legislative staff developed a list of seven solutions supporting those stimulus provisions.
The NAR economic work group adopted six of the solutions as its platform. You can read the material relating to this meeting at www.ccim.com/members/gov_index.html.
Many of those solutions concur with my own thoughts. Based on my discussions with CCIMs, I believe the most important federal action is to provide liquidity to the commercial real estate credit markets. This could be accomplished by making mark-to-market accounting rules more flexible and adopting the use of discounted cash flow analysis for valuing assets in illiquid markets. In addition, the government should expand the Term Asset-Backed Securities Loan Facility, which should be encouraged to purchase commercial mortgage-backed securities.
Other important actions include strengthening federal tax policies that favor commercial real estate by retaining current capital gains rules, modifying the depreciation and leasehold improvement rules, and temporarily suspending passive-loss rules for designated investments.
Finally, the government can stimulate and support the commercial real estate industry through infrastructure investment and by encouraging green building initiatives through tax incentives.
These difficult times present an opportunity for CCIMs to make our collective voice heard in the new administration. Join us on April 22 in Washington, D.C.