News from the Chicago Chapter

National Flood Insurance, Companion Animals Primary Discussion Topics at IREM 2019 Capitol Hill Fly In

                                       Steve Schimmel and Crystal Stude represent IREM Chicago 

By Steve Schimmel, CPM® 
McLennan Property Management, AMO® 
2019 Treasurer IREM Chicago

In early March, IREM re-launched an initiative to bring property managers from across the nation together with members of Congress to discuss key issues impacting the industry and commercial real estate. The program, the Capitol Hill Fly In, brought in over 80 IREM Members to Washington March 5 and 6 to serve as advocates for property management.

I was honored to represent IREM Chicago on the Fly In, along with chapter member Crystal Stude, CPM® of B&A Associates LLC.

The two key issues discussed were:

  1. The National Flood Insurance Program
  2. Policies regarding companion animals

Our meetings were held with staff from U.S. Senators Dick Durbin and Tammy Duckworth’s office, and we also met with staff from Representatives Jan Schakowsky and Mike Quigley of Illinois. We found the congressional staff to be very open and forthcoming during conversations on these two critical topics.

Regarding the NFIP, we pointed out the need for new legislation governing  this program, which allows property owners and businesses the opportunity to purchase affordable flood insurance and enforces management of floodplains. For decades, the program was reauthorized by Congress every five years; but in recent years, the program was reauthorized under shorter time periods.

The technology used to create the flood maps in the NFIP program is over 40 years old and outdated, leading to unequitable situations for some property owners. Here’s an example: The parking lot of an office property is shown to be in a flood zone, but the office building itself is outside the zone. Under the current guidelines, the entire property is deemed to be in a flood zone – costing the owner more money in flood insurance on a property that may have minimal impact from a flood.  The policy premiums for this property are calculated the same as someone who has an entire property in a flood zone and has a much higher risk for flood, thus creating the present day inequity. 

From a financial perspective, the program is operating on a $40 billion deficit and loses $1.6 billion annually. Another compelling statistic: Properties in approximately 30 counties in the U.S.  account for roughly 90 percent of flood claims. The message from IREM to members of Congress is that many components of the NFIP need to be re-evaluated and new actuarial tables need to be incorporated to make the program equitable.  Congress needs to be open to new long-term solutions, and not be content to kick the can down the road.

On the companion animal issue, our objective was to build awareness with legislators on the challenges property managers face when tenants demand acceptance of pets that clearly are not service animals. We pointed out that many property managers and building owners need more clarification on how to interpret the American’s With Disability Act and U.S. Department of Housing and Urban Development guidelines regarding allowing animals into multifamily units.

We pointed out that people who move into a pet-free building because of allergies will be at risk if they encounter a tenant who owns a dog or cat allowed as a support animal. The big question is: Who’s rights come first? Another concern we presented pertained to residents offering building managers with sketchy “documentation” from a “medical professional” stating the companion animal is needed for the person’s well-being.

Our goal here was to not make it harder for people who legitimately need companion animals, but to make the process reasonable and valid.   We desire to see guidance that has been created by H.U.D. released for public comment and review so that property managers and owners of real estate can move forward with best practices. 

Leadership from IREM headquarters also participated in the Fly In. We were pleased to be joined by: Denise Froemming, Chief Executive Officer and Executive Vice President; Nancye J. Kirk, Chief Strategy Officer; and Ted Thurn and Andrew Lomo from the Government Affairs department. These IREM Executive Committee members also participated: Don Wilkerson, CPM®, President; Cheryl Grey, CPM®, President Elect; Chip Watts CCIM, CPM®, Secretary/Treasurer; and George Griffin CPM, Senior Vice President.  Additional support for the Fly In was provided by the leadership of the National Association of Realtors®.

The Fly In was an abbreviated version of the IREM Leadership and Legislative Summit program, which included visits to Capitol Hill. My experience was very positive and rewarding, and I would welcome another opportunity to visit with our elected officials to lobby on behalf the nation’s property management industry.