Taxes, mandates, electric scooters—the commercial real estate industry faced many policy and legislative challenges in the past year. The results are now in from BOMA International’s annual survey of BOMA local associations on top legislative issues facing local markets, revealing both recurring priorities and emerging topics.
This survey provides insight into the issues that are trending across the United States and helps guide BOMA International in directing its resources to provide assistance. It also allows BOMA to identify which markets are facing similar issues to facilitate resource sharing.
Three groupings of priority issues emerged, presenting a number of intriguing trends. Note that each issue identified here should be considered significant; just because an issue finished lower in the rankings doesn’t mean it’s less significant to individual local associations or less likely to have an impact on other markets in the future.
FINANCIAL CHALLENGES
-
Sales taxes on services (tie)
-
Commercial rent taxes (tie)
-
Infrastructure fees
As expected, several tax-related issues were high on this list. While the U.S. economy remains strong, many states and cities still face difficult budget situations, and commercial real estate is sometimes viewed as an industry that can be targeted for revenue. In a tie for first place in this category, nearly half of responding local associations identified sales taxes on services or commercial rent taxes as priorities. The former continues to pop up in proposals, particularly at the state level, despite its widespread unpopularity; the latter continues to appear at both the state and local levels.
PROPERTY ACCESS POLICIES
-
Homelessness
-
Comfort animals and pets
-
Drive-by lawsuits (tie)
-
Electric scooter and bicycle rentals (tie)
-
Guns
-
Drones
These seemingly unrelated issues are categorized under the umbrella of "property access." Perhaps the biggest revelation of this year’s survey was the issue of homelessness, which was identified as a priority by 57 percent of respondents—more than any other issue in the entire survey. "Homelessness" encompasses a wide range of related issues, with many local associations expressing concern over the high and growing rate of homelessness in their markets, as well as the lack of sustainable solutions being proposed at the local and state levels. To help address these concerns, BOMA local associations are making this a priority through philanthropic efforts, and BOMA International is working to identify the best way to support these endeavors.
Meanwhile, comfort animals and pets in the workplace continue to represent a complex decision point for properties, as they weigh safety and health concerns around allowing animals other than service animals in the workplace. Tied with the ongoing challenge of drive-by lawsuits are electric scooters and bicycle rentals, particularly the new dockless services that are causing dozens of cities to scramble to balance their benefits with safety and liability concerns. Issues surrounding the use of drones and allowing firearms on private property rounded out the list.
SUSTAINABILITY MANDATES
-
Energy benchmarking
-
Energy efficiency requirements (tie)
-
Recycling and zero waste (tie)
-
Stormwater management
-
Other mandates
-
Water benchmarking
While the commercial real estate industry has a history of leading on sustainability, there’s been a recurring challenge of unfunded government mandates that produce questionable results. Energy benchmarking keeps its place atop this category, identified by 43 percent of respondents, as cities continue to enact new mandates or add additional requirements to existing ordinances. Many local associations have taken the initiative to be involved in conversations around benchmarking from the start to help create more realistic benchmarking requirements.
BOMA local associations and state coalitions offer a variety of ways to participate in advocacy. BOMA International supports all of these efforts by providing technical and strategic assistance, a free state legislative tracking service and an expanding series of white papers and case studies on emerging issues. For further information, visit BOMA International’s State and Local Advocacy webpage or contact Ken Rosenfeld, BOMA International’s director of state and local affairs.
This article was originally published in the March/April 2019 issue of BOMA Magazine.