The portion of the cost of this bill
that can be quantified with relative
precision is the reduction of the
industry average late fee from 7%
late fees due on the 4th (impacting
about 5% of the industry portfolio) to
0%. That represents approximately
$32,445,000 in lost revenue annually.
The parts that cannot be easily
quantified but would have had
substantial monetary impact are the
increased delinquency rates, the
lost utility charges on non-metered
utilities and pass through fees.
Energy Benchmarking
(The Kipp Bill)
The bill would have required
landlords to gather and report
energy usage data to be available
for consumers. For those properties
in all but the top 25% of the market
(as measure by energy efficiency),
owners would have to had engaged
in remedial projects to improve
efficiency or pay an annual $3,000.00
excess energy charge. The excess
energy charge was limited to those
properties with a building or a
collection of buildings with more than
50,000 square feet (approximately
269,000 units).
The administrative cost of
complying with the reporting
requirements and the cost of ordered
remedial projects to improve
efficiency are both difficult to
quantify, although they could be very
expensive (particularly the latter).
However, the $3,000.00 excess
energy charge imposed on the 9,087
buildings which wouldn’t be in the
top 25%, would have paid a total of
$30,252,000 in energy fees.
Gallagher Repeal Resolution
(scr20-001)
This bill creates a referendum
to revoke the constitutional
requirement that residential property
tax assessment rates maintain their
historic relationship to commercial
rates which has effectively left
commercial assessment rates
at 29% and lowered residential
assessment rates from 21% to 7.2%. We
preserved multifamily rental property a
“Residential”.
Since the Resolution does not address
a replacement assessment rate scheme,
one cannot determine what future
assessment rates might be proposed,
other than that to raise the current
assessment rates (from 29% Commercial
7.2% Residential) would require yet
another referendum. One could claim
preserving the status quo of a residential
definition for the industry and a residential
assessment rate of 7.2% is billions of dollars
in savings from the alternative. However,
I suspect we will continue to see attempts
to manipulate mill levies and referendums
calling for increased assessment rates on
residential properties. In any event, declaring
a quantifiable savings is both to speculative
and premature.
18 | TRENDS JULY 2020 www.aamdhq.org