Condo Media - August 2019 - 40

OVERTIME

WORKING

STATE AND NATIONAL ISSUES KEEPING THE CAI ADVOCACY TEAM BUSY

he years-long push for federal legislation to circumvent condo restrictions on the installation of ham radio
equipment seems to have receded as ham enthusiasts
have shifted their focus to state legislatures. But CAI's advocacy team has had plenty to keep it busy, on both the state
and national levels.
In the state legislative arena, single-family rentals have
been a particular source of concern - not the short-term
rentals, with which many condo communities have been
struggling, but single-family residences that are being
offered for rent rather than for sale.
Recognizing an opportunity in the financial meltdown a
decade ago, some Real Estate Investment Trusts (REITs)
purchased foreclosed properties and funneled them into the
single-family rental market. That market has been growing
for several years, Dawn Bauman, CAI's senior vice president
for government and public affairs, says. But CAI was surprised
this year when some of the largest companies in that sector
began targeting condominium communities with legislation
designed to increase the supply of rental condominiums.
A HARD FIGHT
CAI helped LACs in Tennessee and North Carolina fight measures that would have prohibited associations from enforcing
restrictions on rentals (short- and long-term) that did not exist
when owners purchased their units. Those initiatives were serious, Bauman says, fueled by "some of the most powerful lobbyists" in the two states. "We fought hard on both," she notes.
Tennessee lawmakers decided to hold that bill for further
study; in North Carolina, Bauman says, the bill generated "so
much controversy" (highlighted by 1,300 email messages opposing it), that supporters are no longer pushing it, at least, for now.
But this is just the beginning, not the end, of this rental initiative, Bauman cautions. "This year, the companies went after the
low-hanging fruit," she says, targeting cities with large singlefamily rental markets, "to see what they could get through.
They were just testing the waters," she says. "They are going to
regroup and hit the ground running next year." With that prospect in mind, she advises community associations, "If you don't
have a rental covenant in place, you had better adopt one."
LICENSING AND CERTIFICATIONS
CAI has also been monitoring state initiatives to reform their
professional licensing laws to ease perceived barriers to entry
in many professions. Approximately 30 states have adopted
these measures or are considering them, Bauman says, and
while they don't specifically target association managers,
some measures could affect them.

CONDOMEDIA August 2019

A proposed Louisiana bill included language that would have
prohibited professionals from advertising the voluntary certifications they had earned. That provision would have barred
association managers from identifying themselves as holders
of the Certified Manager of Community Associations (CMCA),
Professional Community Association Manager (PCAM) and
other designations, Bauman notes. "It didn't pass, thank goodness," she says, but it's an issue CAI will be monitoring closely.
At the federal level, CAI's major concerns this year have
been comfort animals and the Federal Housing Administration's (FHA's) condominium certification requirements.
FHA REFORMS-GETTING CLOSER
CAI has been urging the FHA for several years to revise the
certification standards that determine eligibility for an FHAinsured mortgage to purchase or refinance a condominium
unit. Agency officials announced recently that they are close
to finalizing those new guidelines.
Speaking at a National Association of Realtors (NAR)
conference in May, FHA Commissioner Brian Montgomery
said the new policy will increase the cap on commercial
space allowed in a development, may permit "spot approvals" of loans in communities that aren't FHA-certified, and
will require re-certification every five years instead of every
two years.
The re-certification change alone "will make a big difference," according to Bauman, who notes that the two-year recertification requirement has discouraged many condominium
communities from going through that process. The number
of FHA-certified communities has declined from more than
80,000 a few years ago, she says, to fewer than 20,000 today.
The FHA began working on the new guidelines in 2016
but when the reform effort lagged, CAI asked lawmakers
to help jump-start it. In response, Bauman reports, 80 senators signed a letter a few months ago asking the Department of Housing and Urban Development (HUD) to release
the rule. The NAR and other housing industry trade groups
have also been pressuring the agency to complete its rulemaking process. Those cumulative efforts appear to have
broken the logjam.
In his NAR speech, the FHA's Montgomery described
condominiums as "a mainstay of affordable housing," adding
that he expects the revised rules to be "more flexible, less
prescriptive and more reflective of the current market."
Bauman has equally high expectations for the changes.
"We think they will create more flexibility for condominium
communities and create an easier certification process for
them-without any question."

Condo Media - August 2019

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