Recently, representatives of the NAIOP (Commercial Real Estate Development Association) Charlotte Chapter met with several Members of Congress, including Congressmen Richard Hudson, Tim Moore, and Addison McDowell on matters of concern to the industry. Specifically, the group highlighted to the elected officials our priorities in three areas:
Tax Policy –
Continue lower capital gains tax rates: Federal tax policy should recognize the long-term, capital-intensive nature of real estate assets and the inherent higher investment risk involved. A lower tax rate on capital gains income is needed to ensure continued investment in long-lived commercial real estate assets that leads to job creation and economic growth in our communities.
Extend the deduction for partnerships and pass-through businesses. Real estate partnerships and other pass-through businesses drive job
growth and are an important source of entrepreneurial activity. The
current 20% deduction for pass-through income in Section 199A of
the tax code is designed to ensure that pass-through entities are not
disadvantaged compared to corporations that are taxed at lower rates
and should be extended.
successfully incentivize investment in underserved communities, such
as those in the opportunity zones program, should be maintained.
Investment deadlines in the program should be extended.
Energy and Electricity –
Congress needs to pursue comprehensive energy policies designed to meet the growing need for electricity throughout the U.S. economy, including increased investment in electrical grid expansion and modernization, permitting reforms for energy generation and transmission projects, and increased coordination on major regional projects across multiple jurisdictions. The lack of future availability of electricity is hindering the commercial real estate development needed to support industries in a rapidly transforming economy.
Adaptive Reuse –
The aftermath of the COVID-19 pandemic and resulting remote work trends have led to historically high vacancy rates and underutilization of commercial structures in many communities. Hybrid work patterns are now widely believed to have become a permanent feature of modern-day labor markets. While Class A trophy buildings have remained market competitive, Class B and C commercial structures are likely to become stranded assets unless repurposed for economically viable uses.
The decreased number of workers at underutilized office buildings has been devastating to the restaurants, retailers and other small businesses that depend on daily workers for much of their business. The decline in property values has also hurt localities, which depend on property and sales taxes for much of their revenue.
At the same time communities are coping with the impact of underutilized commercial buildings, many are struggling with a severe lack of housing supply. In some instances, underutilized structures in these communities are suitable for conversion to residential usage and could become a part of a comprehensive approach to increasing housing supply.
The Revitalizing Downtowns and Main Streets Act, introduced in the last Congress by Representatives Mike Carey (R-OH) and Jimmy Gomez (D-CA), would provide a 20% tax credit for the eligible conversion costs of an adaptive reuse project. Congress should pass property conversion incentive legislation, which would help increase housing supply and economic productivity in many communities.
Links to the complete set of talking points may be accessed here.
My Take: This trip to Washington, DC was different than some I remember in recent years. It now takes a a bit longer to get from one place to another in the city and there were the usual protests being carried out (in many cases by professional activists). But there was an optimistic energy that seemed pervasive. There will continue to be partisan battles as we have witnessed during the confirmation hearings and votes, but there also seem to be more folks on both sides of the aisle willing to figure out how to solve today’s problems instead of working to create new ones. We’ll see once the dust has cleared.
The HBA of Greater Charlotte holds a meeting of its Land Development Council every month. This group has been getting together for several years now, but more recently has become increasingly engaged. Last week’s speaker was Jenn Bosser, Executive Director of the Iredell County Economic Development Corporation, who provided a truly comprehensive look at what’s going on with our neighbors to the north.
Here are a couple of quick facts:
Geography – County is 574 Square Miles and has the largest shoreline of Lake Norman
Growth – 3rd fastest growing county in the Charlotte Region with 25% growth since 2010, 199,710 residents, and median age 40.
Affordability – 2nd lowest tax rate in region
Employment – Labor Force of 99,000 with $62,669 as the 2025 average wage which is 6th highest in the State, 3.2% unemployment rate
Education – 91% high school graduation rate and 30% with a Bachelor’s Degree or higher
Transportation – Contains the crossroads of I-77 and I-40 and centrally located between Atlanta and Washington, DC and within a 2-day trucking drive to 72% of US population
You may find the full presentation here.
My Take: Jenn did a great job highlighting much of what Iredell County has to offer. However, one comment really resonated with me. And that was her offer of assistance to those seeking to develop properties in the area. She works hard to engage businesses to either move to Iredell or expand current operations. We know that in order for those businesses to succeed, employees need attainable housing. Jenn understands that. She also has her ear to the ground and can provide valuable insight for those seeking to do business there. She is a significant resource and I strongly encourage you to seek her out – Iredell County Economic Development Corporation
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