Real Estate Journal — Financial Digest — Appraisal — September 14 - 27, 2018— 7A


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Allowable building height HousePassesFAAReauthorization, includingRound- table-backed “One Engine Inoperative” language L

The proposed 2014 policy change would alter decades- old standards by compelling the FAA to consider whether a building or other structure poses a hazard to navigable airspace if a plane engine fails on takeoff. The FAA’s current funding and revenues are set to ex- pire this September 30. With the House’s passage of FAA reauthorization today, the Senate is expected to follow suit and aims to have long- term reauthorization in place by August. 2 ( Roll Call , April 16 and CNN, April 27)

According to a study of the issue, approximately 4,000 buildings near 380 airports throughout the U.S. could become “non-conforming” if such OEI policies were ever to take effect. The proposed standards would modify take- off and landing flight paths in a manner that restricts allowable building heights and development potential in growth centers and transpor- tation hubs surrounding the nation’s airports. When the FAA proposed the policy change, it explained it was not due to any public

safety concerns but rather to allow airlines to carry more passenger and freight cargo. The language passed by the House would require that any changes to current OEI policies must first go through a full public rulemaking process. Additionally, the White House Office of Management and Budget would be compelled to conduct a full cost-benefit analysis of any such FAA ac- tion. The Roundtable, the Na- tional Association of Real Es- tate Investment Trusts (NA- REIT), and other real estate

trade groups have long urged Congress to include the OEI rulemaking and cost-benefit language in any FAA reau- thorization bill. (Roundtable Weekly, Feb. 12, 2016). The Roundtable will contin- ue to monitor the Senate’s ac- tions on FAA reauthorization and urge inclusion of similar provisions as the legislation now moves to the other side of Capitol Hill. 1 w w w . c o n g r e s s . g o v / bill/115th-congress/house- bill/4/text 2 www.rollcall.com/news/pol- itics/regular-order-faa-bill 

egislative language that could affect the allow- able heights of build- ings near airports passed the House today (393-13) as part of a bill ( H.R. 4 ) 1 extend- ing authorization of the Fed- eral Aviation Administration (FAA) for five years. The so-called One Engine Inoperative (OEI) language included in the House-passed FAA bill addresses an Obama- era proposal that could affect land development and prop- erty values near U.S. airports. AI opposes bills seeking to raise SBA 7a/504 Appraisal Thresh- old Level The Appraisal Institute in a July 19 letter to the House Committee on Small Busi- ness expressed concern over HR 6347 and HR 6348, leg- islation that would increase to $500,000 the appraisal threshold level for commercial real estate loans for the Small Business Administration’s core lending programs — SBA 7(a) and SBA 504. In its letter, AI noted the increased risk to the SBA and to taxpayers that likely would be caused by reducing risk management at the expense of loan production. Specifi- cally, AI said the legislation fails to fully align the SBA requirements with those of the federal financial institu- tions regulatory agencies as it relates to commercial real estate appraisal and evalua- tion requirements. The plan to increase the SBA threshold level is largely based on the agencies’ decision earlier this year to increase to $500,000 the appraisal threshold level for commercial real estate loans. However, the new legislation fails to include a requirement for the completion of evaluations. The agencies require banks to obtain an evaluation on a commercial real estate loan when an appraisal is not re- quired — an element missing from SBA risk management activities that could create a sizable loophole. Both bills were reported fa- vorably to the House floor and are expected to be considered by the full House this session. No companion legislation was introduced in the Senate. 

Fortuna & DiFlumeri is a full service Commercial, Industrial and Residential Real Estate Appraisal firm located in Center City Philadelphia and serving Pennsylvania, New Jersey and Delaware Our Services Include: Narrative and Form reporting, Consulting, and Expert Witness Testimony for the Public, Private and Municipal sectors

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