Two For Tuesday | March 19, 2024

1. Charlotte Zoning Meeting Gets Interesting

Over the course of more than five hours last night, the Charlotte City Council made decisions to approve many of the 32 rezoning petitions on the published agenda and held hearings on 23 others. Included on the hearing schedule were two that generated a fair amount of interest: Petition # 2022-121 by RK Investments and Petition # 2023-046 by Childress Klein and Charlotte Mecklenburg Schools. Here’s the full agenda of the meeting and video of the proceedings.

My take: First, on a positive note, Mayor Pro Tem Anderson runs a great meeting. She was in control and kept things moving. There was a large crowd populating the gallery, brought in by two large, chartered buses financed by several South Charlotte neighborhood groups. They wore green shirts and were generally well-behaved but very vigorous in their opposition to new development. This new development, by the way, is intended to help meet our current and future housing needs. I’m sure some in the crowd were proud native Charlotteans, but others had to move here from somewhere. Right? Why deny others the great quality of life we enjoy? What was especially disconcerting was that as some Members of Council delivered their own commentary, they seemed to forget about the nearly nine-year planning odyssey it took to get to this point with the debate and passage of the 2040 Plan and subsequent adoption of the Unified Development Ordinance (UDO). I get it. Several on council now were not here when those votes took place. But Charlotte is now a grown-up city and needs to act accordingly. Eighty folks dressed up in green shirts shouldn’t be empowered to dissuade a governing body from sticking to a course of action it set in motion quite a while ago. If that is the ultimate conclusion, and we have now changed our collective minds on the importance of density in a growing city and are satisfied with a growth pattern similar to say, Atlanta, then so be it. But we better take a hard look at the current overpriced regulatory scheme currently in place and reconfigure immediately. And we’re going to have to be OK with our teachers, EMTs, fire fighters, police, and other first responders living two counties away, because that’s how it’s going to be. For the record, I’m not good with that.

2. NAHB Urges Senate to Pass Tax Bill

The National Association of Home Builders (NAHB) called on the Senate today to move quickly to pass the American Families and Workers Act of 2024, legislation that would expand the federal child tax credit and enact a number of other business- and housing-related provisions.

“In an era of hyper-partisanship, the House voted overwhelmingly to approve this critical bill last month because Republican and Democratic lawmakers recognize it contains a number of provisions to help families, assist small businesses and promote the production of attainable, affordable housing,” said NAHB Chairman Carl Harris, a custom home builder from Wichita, Kan. “The tax-filing season has already started, making it imperative for the Senate to put petty politics aside and do what’s right for the nation by passing this bill now.”

NAHB sent a letter to the full Senate today designating a vote in support of the legislation as a “key vote” because of its importance to the housing industry. Specifically, the bill would:

Strengthen the Low-Income Housing Tax Credit (LIHTC). LIHTC helps finance the construction and preservation of affordable rental housing. This bill would temporarily increase the amount of credits allocated to states by 12.5% for calendar years 2023 through 2025. The measure also provides more flexibility when using bonds to finance a LIHTC project.

Extend the 100% Bonus Depreciation. Businesses were permitted to claim 100% bonus depreciation in 2022 for qualifying assets placed in service in 2022. The rate decreased to 80% in 2023, and was set to drop to 60% in 2024, 40% in 2025, 20% in 2026, and zero in 2027. The legislation would allow businesses to claim 100% bonus depreciation for investments in machines, equipment and vehicles for tax years 2023, 2024 and 2025, providing a retroactive tax benefit for 2023.

Expand Section 179 Expensing. The provision increases the maximum amount a taxpayer may expense to $1.29 million, reduced by the amount by which the cost of qualifying property exceeds $3.22 million. The $1.29 million and $3.22 million amounts are adjusted for inflation for taxable years beginning after 2024.

Increase the Threshold for Information Reporting on Forms 1099-NEC and 1099-MISC. Under current law, the reporting threshold for payments by a business for services performed by an independent contractor or subcontractor and for certain other payments is generally $600. The legislation would increase the threshold to $1,000 and adjusts it for inflation after 2024.

The legislation is paid for, at least in part, by accelerating the deadline for filing backdated claims under the Covid-era Employee Retention Tax Credit (ERC), as well as increasing penalties on entities promoting fraudulent ERC claims and granting the IRS additional time to scrutinize ERC claims.

My take: These days it is rare the U.S. House votes in a bipartisan fashion to pass a bill, especially one that provides some level of tax relief. While LIHTC is not the poster child for a great program, folks that use it seem to be able to make it work. The language in the measure should allow more projects to be built, housing more people, which is ultimately a good thing.

BONUS

A little over a year ago, Charlotte Planning staff launched the Community Area Planning Process. Meetings were held weekly for a series of months last year culminating in the recent release of a new draft Policy Map. This is a big deal as the map directly affects how property owners may utilize their properties in the future, then, what return they may realize when they sell, and finally how the city will grow over the course of the next several decades. If you have not already done so, please take a look at the new Policy Map and engage in the process by submitting your comments.

Rob Nanfelt
Executive Director, REBIC

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Two For Tuesday | March 19, 2024

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