Advocacy Update - May 2024

Article written by Rod Kauffman

BOMA’s Advocacy Action Activities:

Keep members informed, engage on issues and policy priorities of the membership and industry. Educate and inform new lawmakers regarding the commercial real estate business and the concerns and the benefits that a thriving commercial real estate industry brings to the economies of the state and local governments.

Federal Advocacy 
Concerns:
1.High interest rates
2.Possible increase in the capital gains tax rates
3.Reliable energy resources and infrastructure
4.Protection and retention of the 1031 tax free exchange program
5.Supply chain logistics. 

Support:
1.Reasonable and appropriately paced carbon reduction regulations
2.Small Business Energy Loan Enhancement Act
3.Honoring Vocational Education Act
4.Freedom to Invest in Tomorrow's Workforce Act
5.Qualified Improvement Property (QIP)
6.Energy-Efficient Tax Deduction—179D
7.Build It in America Act - encourage economic growth.
8.Small Business Jobs Act - growth support of small businesses.

A common concern for state and local governments 2024-2026 are significant and mounting budget deficits.

State Advocacy 
There will be fewer moderate lawmakers in 2025.  There is an unusually high number of lawmakers not running for their existing legislative seats for 2025.  Commercial Real Estate will be faced with more unfavorable legislative proposals and less support for favorable business and real estate legislation.  

Because of this, business and real estate advocacy will shift somewhat to the initiative process to prevent such things as the loss of rent control prohibition, higher taxation and over barring regulations.
A key BOMA priority will be to meet with as many lawmakers running for reelection and new candidates as possible (40-50) May-December. 

2025 Key CRE Tax Issues:
1.Effort to increase the Real Estate Excise Tax (REET) also called Transfer Tax (RETT) – proposal to raise the transfer tax from 3% to 4% for sales above $5 million and lower it for sales below $500k. 
2.Effort to impose B & O tax and possibly sales tax on residential and commercial leases.
3.Capital Gains Tax – a bill that would raise the Capital Gains tax from 7% to 9% and would add real estate gains to the tax. 
4.Property Tax – a bill that would raise the limit on the state portion of the property tax from 1% to 3% based on CPI. 
5.Possible imposition of sales tax on janitorial labor contracts

Regulatory:
1.Effort to limit janitorial cleaning workloads based on square feet per shift.
2.Several bills that would eliminate the existing prohibition on rent control in Washington State
3.Deeper carbon reduction proposals – while supporting reasonable and appropriately paced carbon reduction regulations.

Energy Issues:
1.Continuing efforts to ban natural gas as an energy source.  
2.Department of Commerce – BEPS (building energy performance standards) rulemaking.
3.Electrification related legislation proposals.

Code Issues:
1.Elevator 17.3 Emergency communications mandatory upgrades
2.State Energy Code 
 
Local Advocacy 
A key BOMA priority will be to meet with as many of the City Council Members (7) in 2024.

Taxation:
1.Property Tax Levies.
2.Proposed Transportation Levy.  
3.Local REET increases.

Regulatory:
1.Seattle BEPS: Rule Making Process Engagement
2.Personal Guarantees and Security Deposit Limits- Rule Making Process Engagement.
3.Seismic retrofit regulations remain on a voluntary path.
4.Fire Life Safety (Meetings with Fire Marshalls of Bellevue and Seattle) Damper testing, etc. 
5.Permit processing times.

Transportation:
1.West Seattle to Ballard Light Rail-SLU Station location.

Public Safety:
1.Hiring, recruitment and retention of sworn police officers, more sworn officers. 
2.Street safety and cleanliness. 

Code Issues:
1.Seattle Energy Code. 
2.Building Code Updates.

Other:
1.2024 City Budget
2.Seattle City Light and Puget Sound Energy Rates