Have you heard that expression before? For those who haven’t, to leave in the lurch means to abandon or desert someone in difficult straits. Th is expression alludes to a 16th-century French dice game, lourche, where to incur a lurch meant to be far behind the other players.
So, “what does this have to do with the price of tea in china?” (sorry we couldn’t help but slip another in there.) Well, AZREIA has lined up a stellar panel of legal experts to bring you up to speed on all things legal that will impact your business in the coming year at this month’s Phoenix and Tucson meetings. We are half-way through 2019 and with the global economic downturn over a decade in our past, we take a closer look at the current state of the industry and share our insights in the legal trends impacting real estate and real estate businesses today.
Changes in the legislative landscape will continue to have great impact
Potentially the biggest area of concern and uncertainty is how various legislative decisions around the world are going to affect the economy. Uncertainty around the Tax Cuts & Jobs Act (TCJA) in the US is creating unpredictability in the market.
In the US, the tax overhaul passed in 2018 made myriad changes, some of which are still not clear including the use of “Opportunity Zones” along with the limitation on the business interest expense that a taxpayer can deduct. Those who are substantially leveraged may have a negative tax impact as a result of the new tax law.” Th is could serve to disincentivize those considering real estate as an investment and force some to reduce the size of their portfolios too.
Outside of tax law, old political ideas tend to return in modern times in shiny new packaging hiding tired old fallacies. Rent control is being yanked, again, from the waste bin of history and given new life as a viable option to address the nation’s housing affordability problem. This time rent control has received a round of rhetorical plastic surgery that redefines the policy in more “practical” terms. Oregon is patient zero in this budding epidemic. Its newly adopted, statewide rent control law has opened Pandora’s box, prompting several states to follow suit with their own rent regulation proposals. The law, which caps rent increases at 7 percent plus inflation, represents a successful attempt by advocates to characterize rent regulation as “anti-rent gouging,” giving it a thin gilding of reasonability. Advocates in California have used this blueprint to get a similar bill introduced this session by the Oregon State Assembly’s Housing Committee Chairman David Chiu.
And lastly, it’s hard to forget the pains that many investors, especially those in the finance and notes sector, felt the effects of the infamous “Dodd-Frank Bill” that target big banks but ultimately affected those in the seller finance industry and many in our industry, including the National Real Estate Investors Association, are still trying to undo the harm created by unintended consequences.
You have heard Alan Langston, AZREIA Executive Director, say many times that we focus on rate and pace for ourselves, but in the 21st Century, the rate at which law and regulations evolve or change is increasing. While we have half of year left in 2019 and things can change quickly, staying well informed and adapt to meet shifts in laws, regulations, codes and changing business models through.
Join us for this important and timely August meeting for a full panel of heavy hitting legal experts to learn about the state of real estate legal trends that will undoubtedly affect your business and your bottom line, so that you aren’t “left in the lurch.”
By Troy Miller, Associate Executive Director AZREIA