All eyes on Raleigh: Public buildings and infrastructure, community associations likely on agenda

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North Carolina’s legislators returned to Raleigh on Wednesday, and contractors, real estate professionals and developers are watching to see what legislation may be considered that will make their work easier or more difficult, more lucrative or less profitable.

Among issues most closely watched will be whether the legislature continues efforts to limit towns’ and cities’ ability to regulate building and environmental standards, as well as the state’s plans for public building and infrastructure construction and the legal authority of community associations versus their homeowners’ rights.

Public buildings

The construction industry will be following the progress of a Blue Ribbon Commission, authorized by a law passed in June that will be studying the state’s building and infrastructure needs through 2025.

The 20-member commission will include six members of the two lawmaking bodies, as well as representatives from the construction industry, municipalities, school systems and state agencies.

From prioritizing to identifying possible funding sources, the panel will be making recommendations on the multibillion-dollar need for repair, renovation, expansion and construction of water and sewer systems and educational and municipal buildings.

The commission could issue an interim report this year; its final report is due in time to be considered during the short session in 2016.

“It’s excellent timing because there is an incredible need for public infrastructure in construction,” said Dave Simpson, government relations and building director for Carolinas AGC (Associated General Contractors).

“If the public building (infrastructure) needs are met, there will be a major boom for the construction industry,” said Simpson, and “jump start the economy in a big way.”

However, Simpson acknowledges that there will be challenges for the panel, based upon the magnitude of the building needs.

But the alternative could cost more, he said.

“The cost of doing nothing is about $1.2 billion a year, because if you let the state buildings and universities just become dilapidated and they’re not properly maintained, it costs about 40 percent more to operate them,’” said Simpson.

When it comes to maintenance, “it’s like having a house,” said Simpson. “It is incumbent upon the legislature to better upkeep their vast inventory of public buildings.”

In addition to assessing public infrastructure and construction needs, Simpson is hopeful that the legislature will consider transportation needs, which is also at the forefront of the N.C. League of Municipalities.

According to the organization’s “Municipal Advocacy Goals,” the organization plans to seek “or support legislation to generate additional revenues to address growing transportation needs at the state and local level, and enable local governments to enter into alternative financing mechanisms to complete local transportation projects.”

In the Charlotte area, in addition to the current expansion of the Lynx Blue Line light rail from uptown to UNC Charlotte, the city has continued pursuing plans to construct phase two of the Gold Line, or streetcar, project and to develop the Red Line commuter rail from uptown to Mooresville.

Governing HOAs

Eastern Mecklenburg County Rep. Rodney Moore, D-99^th District, plans to introduce legislation concerning laws governing homeowners associations.

“I think that there are some areas that we really need to reform,” he said.

Last year, he co-sponsored a bill that would prevent HOAs from being able to foreclose on homeowners for overdue assessments, and he said he may introduce similar legislation this year.

While Moore recognizes the functionality of HOAs, he just wants to make sure that they “are operating for the benefit of all the homeowners, not just for arbitrary” purposes.

Attorney Jim Slaughter of Rossabi Black Slaughter has a different take on the matter.

“The idea of saying that associations should not be able to pursue people who don’t pay their assessments is going in the wrong direction,” said Slaughter. He reasons that “association finances are a zero-sum game. The only money that the association has to pay for the services – which can include water, sewer, power – is what members pay.”

Slaughter is also concerned that foreclosure restrictions would “punish the people who are paying their assessments” and adversely affect property values. “In fact, banks probably would not loan money to people to buy in associations because they would know that their financial interests weren’t protected,” said Slaughter.

Slaughter would like to see state legislators follow the lead of “super lien” states: “In the event a bank forecloses, the association is still guaranteed so many months of assessments,” said Slaughter.

Ole Madsen, founder of homeowners’ rights group HEAR4nc, said he is lobbying for legislation that would include elements that were proposed in bills last year, but failed to become law. One would require the licensing of community association managers and another would require educational classes for all who serve on association boards, but Madsen said that differences in the types of associations targeted and proposed requirements need to be ironed out.

“We’re going to try to align those two bills up as much as possible because a building is not the same as a condo, so it’s slightly (different), but as far as the rights and the way it is structured and everything else, they should be the same,” he said.

“People don’t know their rules; people don’t know their rights.”

Moore also said he’d like to see more codification of community association boards’ responsibilities: “what they can and cannot do.” Perhaps then, he said, “we would not have a lot of the misunderstandings and incidents” that have plagued associations in recent years.

While Slaughter said he is “a big believer in board members being as educated as possible about community association issues and laws,” he is concerned that the proposal for educational requirements “does not just require board member training, but would force all board members to pay the government for training through the N.C. Real Estate Commission, which governs real estate brokers,” and not community associations.

Slaughter is also suggested that “imposing additional training requirement hours for volunteer leaders may make it more difficult to find volunteers to serve.”