Midyear Report: Reflections on REALTOR Party Political Initiative, Part 1 – Wartime NAR

This post, and this series of reports and opinions from NAR Mid-Year 2011, brought to you by:

Thanks again to Zillow for sponsoring the series. I walked around one full day at Midyear with a Zillow shirt, as promised in my Ebay sponsorship listing. Got more than a couple of comments as a result, ranging from “You guys need to do XYZ” to “Uh-oh!” and so forth. I do believe they think I work for Zillow. 🙂  And I do believe Zillow needs to do some more outreach and more sweet-talking.

In any event, I know that I witnessed history on Saturday. But the impact of that history-making is a bit less clear now that I’ve had the benefit of sleep. A few details keep sticking in my mind, which I thought I would share with you all, if for no other reason than to get my own thinking clearer. As E.M. Forster said, “How will I know what I think until I see what I write?”

Core Strength

One detail that just keeps popping up in my mind, suggesting that perhaps this detail is far more important, is that I detected a fairly widespread sentiment amongst the “NAR Core” — the term I’ll use to mean those Directors, Association people, committee volunteers, vendors, consultants, etc. etc. — that one unspoken reason to pass RPPI (I’m dropping “survival” as per the motion to strike the term) is to “thin the herd.”

There are two components of this sentiment. The first is that anyone who can’t come up with $40 a year — less than $0.12 a day — shouldn’t be in business. The second and more important component is that those who were opposing RPPI were not committed to the mission of NAR, to the organization, and are mere freeloaders whose opinions don’t really matter, and losing them would not hurt the NAR much at all.

I can’t forget the one gentleman at the Treasurer’s Budget Forum who said that his state association looked at every single piece of email that came into the Association in opposition to RPPSI, and that not one of the opponents had ever given a single dollar to RPAC. His sentiment was that these people are freeloaders, who aren’t doing their fair share, and the Association might be better off without them. That statement was applauded in the room. Turns out, this gentlemen was Nestor Weigand, former President of NAR.

That sentiment — that maybe some of members ought not to be encouraged to stay members — is surprisingly widespread. I don’t think I’d go so far as to say it’s a majority opinion among the attendees here, but I don’t think it’s a tiny minority either. One gentleman said in a meeting that going forward, membership in NAR should be premised entirely on political activism and political support (i.e., RPAC contributions). He acknowledged that there are quite a few members who are members only because they want MLS access, and saw little value in having such members.  Turns out, he’s a major contributor to RPAC, a powerful trustee, who has given tens of thousands of dollars in contributions and hours and hours of time.

From an organizational standpoint, one such member is worth (quite literally) thousands of members who absentmindedly drop $5 into the RPAC hat at some wine tasting event.

Now, I know that many of you — who were and remain opposed to RPPI — have already pointed out the dissatisfaction among the “membership” that the “leadership” is out of touch. NAR has a tin ear, NAR doesn’t care, NAR decisions are made in smoke-filled back rooms, etc. But that’s rhetoric; the reality is perhaps more profound.

Threats, Wartime Footing, and Unity

Any organization, from nations to basketball teams, naturally develops a “us” vs. “them” mentality. In fact, a primary reason to organize at all is to create this differentiation from everybody else and the select few. We see six year old kids doing it on the playground, and we see sixty year old women doing it at churches. It is as natural as breathing for humans to want to form groups, tribes, sub-groups, clans, teams, etc.

When an organization feels threatened, the natural and very strong tendency is to draw in together, get tighter, and seek strength in unity. What might have once been a social club suddenly takes on characteristics of a militant activist organization, etc. Where membership once was wide open, easygoing, and the organization sought to bring as many people in as possible, when threatened, the organization wants committed members, who are true believers, who would sacrifice, and go fight for the organization. Loyalty becomes an extremely important factor.

I believe that the #RPPI vote represents exactly this transition of NAR from a confident organization that felt as if it was on top of the world into an embattled group that is looking at defeat after defeat right in the eye. The “Option A” vote — the strongest possible response to perceived threat — was essentially a declaration of martial law.

Frankly, NAR has reason to get on a wartime footing, raising the threat level all the way to RED. A scant couple of years ago, the widespread perception was that the mortgage interest deduction (“MID”) was untouchable, a “third rail” of American politics that no politician dared touch. Today, there are Congressmen of both parties who are seriously contemplating eliminating or limiting the MID, and the Obama Administration is not exactly a friend of the MID. Last year, when I started sounding the alarm about the Federal policy shift away from homeownership towards “Sustainable Homeownership” and Renter Nation concepts, I was told by numerous people privately and publicly that I was crazy. No one would dare.

Who’s crazy now?

The other major issues — the Qualified Residential Mortgage rule, requiring a minimum 20% down payment, and the future of the GSE’s — are both ones that were not even on the radar a couple of years ago. These are the kinds of issues that the all-powerful NAR of the past would have ensured would never even come up on the agenda, by working with Congress, the White House, and the DC bureaucracies behind the scenes. Today?

I am on record stating that while we in the industry sat around talking about Facebook and WordPress plugins, the foundation of real estate industry was being weakened. It’s as if we were busy putting in granite tiles in the guest bathroom, and forgot about the termites eating away at the foundation.

I don’t know if RPPI is exactly the thing NAR needs to do, but it had to do something. NAR and the industry as a whole — whether member REALTOR or not, whether a loyal Director or a tar-and-feathers rebel — are facing the kinds of changes, kinds of threats that we have not seen for generations.

In retrospect, considering the external situation, the vote was inevitable. NAR had to do something. That something had to shift the organization from one concerned mostly with networking, education, and socializing into one that was going to be all about political warfare. Unity, loyalty, and commitment are far more important to an organization on a wartime footing than big tents, harmony, and loving feelings.

I think that is what I saw this past week, over and over again, in one form and another. The Core membership essentially feels embattled, and wants commitment and loyalty from everyone. And push comes to shove, if someone is unwilling to get with the program, I think NAR Core is unwilling to make a whole lot of compromises to get them onboard — since the value of dissenters is pretty low in a wartime footing situation.

Path Towards Harmony?

At the same time, an organization under attack welcomes allies wherever they can be found. United States and Soviet Union, after all, were allies at one point. Without FDR, the USSR does not survive.

The path forward towards harmony might need to start with the dissenters, because the NAR Core feels threatened. And rightfully so. So where do we begin?

We begin with talking about the Threats. If the Dissenters agree with the Core that yes, the industry is facing serious and significant threats, then we have a background of agreement upon which to build and work towards consensus. Maybe running independent expenditure TV ads for a specific candidate is not the method everyone can agree on, but there may be agreement that NAR should do more issue advocacy (instead of candidate advocacy). Maybe people can differ on ways to get to the mountaintop, while agreeing that (a) there is a mountain, (b) there is a top to the mountain, and (c) the top is the same for both of us.

What NAR could do, after this historic vote, is to redouble efforts to reach out to the dissenters. They feel as if they’ve been steamrolled, that their opinions do not matter one bit. It might have been better to do this at the start, but better late than never. The Core Members could relax their vigilance for a bit, and do a series of town halls, online forums, blog posts, whatever, and seek opinions.

But they must demand and get agreement from the Dissent that (a) there is a problem, and (b) the problem is serious. Just because RPPI passed does not mean that NAR will immediately start running ads for Nancy Pelosi and Michele Bachmann. There is still time to consider what tactics NAR will use.

The Dissenters, for their part, must start with that premise: there is a problem, and it is serious. So now, what can we do about it? Given the mood of NAR and the Core Members, I believe they will listen to anyone who shares their concerns about the threats to the industry, even if there might be disagreement on what to do about the threat.

If, on the other hand, the Dissenting position starts from the premise that NAR is the root of all evil (as Greg Swann of Bloodhound Blog believes), then there is no hope for reconciliation and there never was. And the Core… couldn’t care less what such people thought, “member” or not. Let them go their way, would be the likely response.

This is not to say people are not entitled to their own opinions; of course they are. It is to say, however, that differences at these base philosophical levels can never be resolved.

Enter CFORE

After RETech South conference, I started to organize, with Chris Nichols (@utahrepro) the seed of something. We’re calling it CFORE for now, and it stands for the Committee on the Future of Organized Real Estate. The first step is to hold a meeting/conference [NOTE: it’s set as a private event; msg me for invite] for those who might be interested in going beyond just complaining about the problems we see.

I think CFORE might be a good place for both the NAR Core and the Dissenters to start establishing common ground for moving forward. Even if we differ on approach, if we agree on the basic problems and issues, I feel we can make progress towards solutions.

The event is scheduled for Friday, August 26th through Saturday, August 27th. If you are interested, visit the event page on Facebook, or send me a message (or leave a comment here, find me on Twitter, whatever). I now believe this would be a good mid-point between the passions of Mid-Year and what steps might be taken at Annual in November. Whether you are a NAR Director and a true believer, or one of the disaffected, if you care to work towards a solution, consider attending. The event is free, but you’re responsible for all your own costs. And if you just want to come and throw bombs, don’t bother. I’d like to try to explore solutions, not just point fingers and get mad and fight each other.

But even if you can’t make the event, once the emotions cool off a bit from the historic RPPI vote, I hope all those concerned about the future of the industry might have these important conversations and discussions locally.

These may be the most important conversations you can have, in these moments of history.

-rsh