Quarterly: Spring 2002

CBQ >> Spring 2002 Issue

Public Policy Watch

Montgomery County Passes Tenant Displacement Revisions

The County Council passed Bill 28-01 "Tenant Displacement - Revisions" on December 7, 2001. The tenant displacement law, Chapter 53A, will now apply to rental housing of multi-family dwellings with a total of at least 4 or more units.

The definition of a tenant organization has been changed to "an association of tenants of rental housing that represents tenants of at least 30 percent of the occupied units in the rental housing and is certified by the Department according to Executive regulations." Further, the new law extends the time for a tenant organization to exercise their right of first refusal to 90 days after it is received.

An owner also does not have to provide a right of first refusal for a sale "of rental housing for which the building permit was issued after February 5, 1981."

Finally, the law now requires that "the owner must pay a tenant relocation assistance equal to 2 months' rent if the tenant moves out of the rental housing within 180 days after the tenant received the notice of conversion," in the manner required under the law. The relocation assistance must be paid by the owner not more than 10 days after the owner received the tenant's notice of termination as stated in the law. Bill 28-01 went into effect on January 15, 2002.

GWCAR Testifies on Impact Tax

The Montgomery County Council held a public hearing January 22 on Bill 47-01 entitled, "Impact Tax - Amendments." GWCAR lobbyist Meredith Weisel explained that although this bill is an improvement from the previous development impact tax bill, the association is still concerned that any impact tax will have devastating effects on the commercial real estate market.

"GWCAR would like to point out that impact taxes can escalate the cost of new construction projects by two to four times the amount of the tax because they are assessed prior to the development, which results in the accrual of additional financing costs. These higher costs are seen as a "hidden tax" because the cost is absorbed within the purchase prices on both residential and commercial property," explained Weisel. "Consequently, residential housing and commercial building prices significantly increase, thereby hindering economic growth because potential buyers are unable to afford the new developments."

On February 11, 2002, the Management and Fiscal Policy Committee held the first of several worksessions on this bill. GWCAR's government affairs team will be following this issue closely.

Maryland Senate Holds Hearing on Recordation and Transfer Tax

The Maryland Senate Budget and Tax Committee held a public hearing February 13 on SB 316, "Recordation and Transfer Taxes - Transfers of Controlling Interests." GWCAR submitted written comments in opposition to the bill, which would considerably alter the fundamental purpose of the recordation and transfer tax laws.

These taxes are required only when a document of certain assets must be recorded in the public record, which in turn provides notice of possession of these assets. Yet, SB 316 would have the transfer of intangible assets be subject to a recordation and transfer tax, even though there is no need to record it. GWCAR's government affairs team is working closely with several other business organizations to stop this burdensome tax that will hurt the commercial real estate market and hinder economic development throughout Maryland.

Streamlining Permitting Process in DC

GWCAR's legislative efforts to streamline the permitting process are succeeding in the DC Council as Bill 14-184 (entitled "Homestart Regulatory Improvement Amendment Act of 2001") recently passed Councilmember Ambrose's Consumer and Regulatory Affairs Committee by a unanimous vote.

The bill seeks to engender responsible development throughout the District of Columbia by: (1) creating a construction code database; (2) expediting the building plan review process; (3) requiring the mayor to allow third party inspectors to certify the work performed pursuant to a building permit; and (4) creating a DC rehabilitation code.

The bill is expected to pass the full Council by the end of March. "The key to the third party review portion of this bill is in the implementation," explained the bill's sponsor, Councilmember David Catania.

If any GWCAR members are interested in providing guidance on third party plan review to the Department of Consumer and Regulatory Affairs, please contact Damian O'Doherty at 202.887.6888 or damian@gcaar.com. Urban Forest Preservation

GWCAR President Phillip Thomas, WDCAR President Carol Mitten and WDCAR Public Policy Committee Chair Gene Kenney have met with Council leaders about a well-intentioned bill that could stifle responsible development. Bill 14-307 is entitled Urban Forest Preservation Act of 2001 and establishes an entirely new bureaucracy for urban reforestation.

Generally, the bill provides that "with each permit to build, alter, construct or demolish property, the owner must provide a deforestation statement" (this is a written statement specifying size and location of all trees 25 inches or greater in circumference that has been removed in the past 24 months or that will be removed or endangered in connection with construction) and then comply with onerous reforestation requirements which include, among other things, expansive new fees. The bill also calls for a tree registration for certain trees located on private property.

GWCAR hopes to limit the bill's applicability to public property, including both City-owned lots and public space in front of most private lots. GWCAR also supports a voluntary tree registry.