Thus far, 2015 has proved an exceptional year for NAIOP and its chapters in successfully engaging policymakers on legislative initiatives impacting commercial real estate and development in state capitols across the country. Our effective advocacy is reaping dividends as NAIOP raises its profile as the voice for commercial real estate development on policies to spur economic development, create jobs and improve the regulatory environment.
NAIOP chapters and its members have walked the halls of state capitols advocating for commercial real estate, released position papers, testified before legislative hearings and committees, worked with coalitions and executed other effective grassroots action plans in order to ensure the interests of the commercial real estate industry are considered before key decisions and votes are taken on legislation. Due to these efforts, NAIOP has brought many issues to the forefront of the legislative debate, deterred harmful legislation and, in some states, scored major public policy victories. NAIOP’s effective advocacy in Arizona, Florida and North Carolina serve as prime examples.
Arizona: NAIOP Arizona scored a major legislative victory this year on one of its top legislative priorities with the passage of legislation preventing local governments from adopting ordinances mandating building energy usage reporting, commonly referred to as benchmarking for commercial buildings. The chapter effectively led a coalition of trade groups and chambers of commerce in support of the legislation, which, through their effective advocacy and education, drew bipartisan support and was signed into law by the governor. The bill recognizes the fact that building owners and operators only control energy usage in the common areas of the building, such as the lobby or parking decks, and that much of a building’s energy usage is controlled by the tenant outside the purview or control of the owner. Because of this, a benchmarking mandate may provide an inaccurate assessment of the energy efficient technology and systems incorporated into the building.
Florida: NAIOP Florida, representing the state’s five chapters, has been and continues to be a leading advocate for the repeal of the state’s 6 percent sales tax on commercial leases. NAIOP Florida has called for the state’s elected leaders to repeal this burdensome tax in order to remove the stigma as the only state in the country to apply a sales tax on commercial leases and make the state more competitive in attracting and retaining companies that spur economic growth and create jobs. Through their efforts, the repeal of the sales tax on leases became an issue in the 2014 gubernatorial race that led to a substantive debate this year, which included NAIOP members testifying during committee hearings. While Florida legislators continued the debate on the sales tax until the closing days of session, the session was adjourned without any action being taken on this issue. However, recognizing the importance of this issue, a bill has already been introduced for the 2016 session to reduce the sales tax on leases from 6 percent to 5 percent. This action is seen by NAIOP and the industry as a positive step towards the eventual repeal of the entire tax on commercial leases.
North Carolina: NAIOP North Carolina achieved a significant legislative victory this year with the passage of legislation reforming the state’s protest petition process established in the 1920s. The coordinated legislative efforts by the three North Carolina chapters – which included an effective Day at the State Capitol, testimonies at committee hearings, working with other industry groups and communicating NAIOP’s position at key points during the debate – led to the passage of a bill that maintains citizen input and participation in the zoning process with a simple majority vote – rather than a supermajority under the 1923 law – vote by the local council when a protest petition is filed.
While these are only a few examples of NAIOP’s legislative successes, there were many more. Through a coordinated, strategic and comprehensive advocacy approach, NAIOP’s presence at the state level will continue to strengthen and grow. However, it is important for NAIOP and its chapters to continue this momentum by remaining engaged for future policy debates because state leaders will continue to raise issues, pass laws and make rules affecting commercial real estate.
Toby Burke is the Senior Director of State and Local Affairs for NAIOP.