Welcome to Ungated

Forget Nostradamus, this 15+ year old Calvin and Hobbs cartoon accurately predicted the US and world economy this past year.  Who knew??:

April is just around the corner and CAI will once again be visiting New Orleans for our National Conference, continuing our tradition of great cities, great education, and great networking.  The hotel room block is filling fast, so make sure that you get your reservations at the Sheraton before all the rooms are gone.  Don't forget that the deadline for Early Bird Registration is March 24th.  Get your conference registration to us by then and save $50.

And for those of you who want to add another great experience to your trip,  New Orleans Jazz and Heritage Festival (Jazzfest) kicks off its opening weekend Saturday and Sunday right after conference ends.  Celebrating 40 years of peace, love, and crawfish, over 200 performers are scheduled to appear.  In these challenging economic times we all need a little music to feed our souls and great food to feed our bodies.  Check it out.

In just a few short weeks in session, the new Congress has moved quickly to pass an unprecedented economic stimulus plan designed to help shore up the sagging economy. Known as the American Economic Recovery and Reinvestment Act, the 1,200+ page bill provides for more than $787 billion on a variety of tax cuts and spending programs as the country faces the toughest recession since the Great Depression.  Both the size and the scope of the legislation are stunning, and there will be more information rolling out on provisions in the bill beneficial to CAI members in the weeks and months ahead.

In our first review of the legislation, we’ve identified several provisions that may be of interest to CAI members.

HOMEOWNER TAX BREAKS

$8,000 first time homebuyer tax credit for homes purchased in 2009.Under the stimulus bill a first time homebuyer will be entitled to an $8,000 tax credit for a home purchase in 2009. This is an increase of $500 from the $7,500 tax credit passed by Congress in 2008. Unlike the 2008 credit, the $8,000 credit does not have to be paid back by the homeowner. The tax credit phases out for taxpayers with an adjusted gross income of $75,000 (single filer) or $150,000 (joint filers).

This is less than the tax credits that CAI and the Fix Housing First Coalition were supporting for all home purchases, but it is a step up from the current $7,500 tax credit that a homeowner must repay.  

$400 tax credit for Singles, $800 for Couples. The act also provides for a refundable tax credit of up to $400 for single filers and $800 for families. The rebate would be calculated at 6.2% of earned income and phases out at incomes of $75,000 for single filers and $150,000 for joint filers.

Unlike the rebate checks in recent years, those qualifying for the tax credit need to make affirmative adjustments to their income withholdings to get the money added to their paychecks or wait to get the full benefit up completion of the their 2009 tax returns.

Sales Tax Deduction for New Car Purchases.  Taxpayers with an adjusted gross income of less than $125,000 for single filers and $250,000 for joint returns can take a tax deduction for any state, local and excise taxes on a new automobile purchase made in 2009.

Tax Credits for Energy Efficiency Improvements.  Taxpayers will be allowed to take a tax credit of up to 10% of the cost for qualified energy efficiency improvements undertaking in the current taxable year.

Extension of Alternative Minimum Tax Relief. The stimulus bill extends relief for taxpayers who might fall under the Alternative Minimum Tax by increasing the ATM exemption to $46,700 for single filers and $70,950 for joint filers.

BUSINESS TAX BREAKS

Extension of Bonus Depreciation. Extends the ability of a business to take an immediate 50% write off for the cost of depreciable property acquired in 2009 by extending provisions from 2008 allowing for accelerated depreciation.

Extension of Small Business Expensing. Extends until 2010, provisions that allow a small business to write off capital expenditures of up to $250,000 for expenses incurred in 2009 with an income phase out of $800,000.

5 Year Carry-Back on Net Operating Losses. Allows small businesses, with gross receipts of $15 million or less, to carry back losses from the current 2 to 5 years before the loss arose.

Incentives to Hire Unemployed Veterans and Disconnected Youth. Employers who hire unemployed veterans or disconnected youth can qualify for a tax credit that equals up to 40% of the first $6,000 ($2,400) of wages for the hired employee. An individual would qualify as an unemployed veteran if they were discharged or released from active duty from the Armed Forces during the five year period prior to hiring and received unemployment compensation for more than four weeks during the year before being hired. An individual qualifies as a disconnected youth if they are between 16 and 25 and have not been regularly employed or attended school in the past 6 months.

The debate on whether or not these tax and spending incentives will be enough to turn the economy around begins now. In the coming weeks, we will be reporting on developments in many of the areas discussed above and other provisions that may be of benefit to you as a CAI member.

On December 16, 2008 Fannie Mae issued new mortgage underwriting guidelines for condominiums projects. The new rules reflect the higher standards demanded by the market following the bursting of the housing bubble. Most of the new criteria apply to new condominium projects; however, Fannie Mae has refined a provision related to condominium association delinquencies which will be applied to all new and existing condominium developments. The guidelines provide that underwriting decisions will take into account the delinquency rate of an association and have set a bench mark that associations should have no more that 15% of units no more than 30 days delinquent. This requirement was widely reported in the press as being a make or break threshold for mortgage underwriting determinations. The reality is that it will be one of a variety of factors in the underwriting decision process.  More information on this issue can be found here.

2009 looks to be an important year for housing issues at the federal level. Decisions on how to stimulate the economy and to restore confidence in the mortgage markets and banking system will have a follow on impact on community associations. CAI will be engaged with key decisions makers in DC to ensure that the impact of these decisions on community associations is heard and considered.

CAI’s North Carolina and South Carolina Legislative Action Committees (LACs) each received $2,500 grants to support their efforts to pass community manager licensing legislation in their states. Both LACs have spent a considerable time working with members across the region to build consensus on proposals. Both bills would provide needed protections for home owners, and adopt licensing standards set by industry professionals as embodied in certifications like the CMCA and designations like the AMS, LSM, AAMC and PCAM.  The licensure of professional community association managers, when set to the standards developed by management practitioners, adds value to all CAI members.

Thanks to the hard work of Nevada CAI members and the volunteers of CAI’s Community Nevada Legislative Action Committee (NV-LAC), the Nevada Legislature has sustained the Governor’s veto of Assembly Bill 396 (AB 396). The vote was one of the first actions of the new legislature as it opened its 2009 session. This victory means that, for now, associations in Nevada can continue to enforce traffic laws within their community, make independent editorial decisions in newsletters, better maintain common elements and adequately assess members for reserve funding.

Passage of AB 396 would have resulted in communities that were less safe, less governable and less able to take action to preserve the home values of their residents.

CAI members and LACs have been working on grassroots opposition to a legislative override of the Governor’s veto. Today’s vote is well earned victory for CAI members and their allies - more so if you consider that the original legislation passed both chambers in 2007 with only 2  “No” votes. Congratulations.

If you didn't make it this year you missed an outstanding Law Seminar in Palm Springs, California.  Over 430 attorneys, managers, risk management specialists, and others took in the sunshine and the education at Rancho Las Palmas.  For those of us who managed to escape the cold and snow it was a real January treat.

Thanks to all our speakers for sharing their knowledge and to the Law Seminar Planning Committee and the CCAL Board of Governors to all of their work in putting together a great event.

Looking ahead, next years Law Seminar will be January 21 - 23 at the Westin La Paloma in (also sunny) Tucson, Arizona.

And don't forget, our next National Conference is coming up in New Orleans from April 22 - 25, 2009.