The REALTOR Rally and the Desperate Need For A New Political Action Paradigm

Rally to Protect The American Dream on May 17th

This is a tough post to write. I’m actually debating for the first time while typing this into the little WordPress window whether I would actually hit “Publish” at the end of it. If you’re reading this, it means that I’ve overcome whatever hesitation I’ve had, but I want you to understand how hard it was to do that. Why?

Because the Rally to Protect the American Dream (aka, REALTOR Rally) that just took place on Thursday is something many, many of my friends are justifiably excited about. That rally is said to be the largest in-person gathering of REALTORS in one place (although, I’m under the impression that NAR Annual Convention draws more people than that… but I guess it depends on what you mean by “one place”). NAR says that about 13,500 REALTORS showed up in person, and an additional 13,576 REALTORS joined in virtually. The organizers should be proud of what they accomplished, on fairly short notice as I understand things from conversations.

Getting strong statements of support from Johnny Isakson (R-GA), a REALTOR himself, as well as Steny Hoyer (D-MD) for NAR’s policy programs is a win for the rally organizers as well:

“I commend the National Association of Realtors® for keeping the issue of homeownership at the forefront when we talk about our economic recovery,” said Rep. Hoyer. “Stabilizing the housing market remains a central issue for Democrats, who understand we will not have robust economic growth without a vibrant housing market and that access to homeownership remains a critical component of the American Dream.”

Sen. Isakson said, “Homeownership always has been, and remains to this day, a part of the American dream. It is the biggest and most important investment that the average American family makes, and that’s why we should remain focused on the value of the housing market and the important role it plays in our country. It is my hope that this rally encourages Congress and the president to move forward with policies that are supportive of housing, which is vital to job creation and the recovery of our economy.”

So that’s all very very good. On almost all of the traditional metrics, the Rally to Protect the American Dream can be called a smashing success. I want nothing more than to join in with friends like Chris Nichols and Nobu Hata and Brian Copeland in being thrilled with the event.

Yet… to me, the Rally and what quick-and-dirty aftermath I’m seeing suggest that it is high time for NAR to embrace a new paradigm for political action. Yes, this is a continuation of, and a confirmation of, my posts to date on the Leaner and Meaner Association. Yes, I expect Bill Lublin to weigh in shortly. 🙂

If the Rally Was A Success, Why the Negativity?

The first obvious question is why I believe it’s time for a fundamental rethink if the Rally was such a success?

There are two reasons.

One, Congresscritters can do math.

Two, the public is not persuaded.

Basic Mathology

By NAR’s own numbers, we have a total participation in this Rally to Protect the American Dream of some 27,000 REALTORS: 13,500 or so in person, and another 13,500 via online “virtual” means. Since NAR claims just shy of 1,000,000 REALTOR members, that represents a 2.7% participation rate.

For an event for which NAR has pulled out all the stops… for months on end.

Let’s suppose for a moment that I’m a young staffer at Rep. Hoyer’s office. My boss just spoke at the rally, supporting NAR’s positions. But I also know that we may be getting into some political combat soon on things like Medicare, Social Security, and Obamacare. The Rethuglicans — especially those nasty Tea Party extremists — are going to take my boss to the cleaner chanting “How are you going to pay for all these programs?” And well, it is a fact that the federal deficit is $1.6 trillion a year.

Maybe, we can negotiate with those crazy right-wingers and get them to make concessions on higher taxes on millionaires… but they’re gonna want some spending cut…. Which spending programs do I tell my boss he should concede?

Take these guys on? Or the REALTORS?

One possibility is to cut funding to the FHA, making it more difficult for young first-time homebuyers to get mortgages. Another possibility is to slash spending elsewhere, which would result in layoffs for federal, state, and municipal workers.

The last time AFSCME and the other labor organizations joined in on a rally in DC, they brought between 175,000 and 200,000 people live, in person, standing around holding signs. Who knows what the participation rate would have been if they had done a “virtual rally” as well?

Let me think how I’ll be advising my boss on which program he should be willing to sacrifice…. Do I tell him to piss off the labor unions or the REALTORS? Let me think who can barely muster 2.7% participation rate. That might be the group I tell my boss to screw over.

Sure, REALTORS might claim they speak for 75 million homeowners, but those homeowners were conspicuously absent from the Rally to Save the American Dream. I could likely tell my boss that he can safely ignore that bluster.

And on the other side of the equation, Sen. Isakson may be a third generation REALTOR, and he may be absolutely convinced that homeownership is the cornerstone of the country. But… major influencers like the American Conservative Union — not to mention the increasingly powerful Tea Party movement — are not necessarily in favor of every point on NAR’s program.

If the ACU and various Tea Party groups come out against the mortgage interest deduction, for example, do we really think that Sen. Isakson would fall on his sword for NAR?

The Public Is Not Convinced

What I particularly wanted to see was if there would be any media coverage of the Rally. And if there was, what the public sentiment regarding it might be.

Well, so far, there are two non-affiliated stories on the Rally. (By non-affiliated, I mean non-real estate media organizations. Coverage by RISmedia is cute, but no one who isn’t in the industry pays any attention to RISMedia.) One is from the real estate blog of US News and World Report, and the other is from the real estate blog of MSN. Zero coverage from the major news outlets (NYTimes, WaPo, CNN, etc.), or even local news outlets.

But, in a way, the lack of media coverage might be a blessing in disguise, because the non-REALTOR responses I’ve seen is… shall we say doubleplus ungood?

Here’s one from an Ayn_Droid:

Who will save us from parasitic Realtors while reaching for our dream?
These guys have nothing to offer and are part of the problem that killed the housing market. There’s no escaping reality.

Note that this comment got 36 “thumbs up” and 32 “thumbs down”….

Here’s a “boo toad”:

“Rally to Protect the American Dream”? The dream is gone. Destroyed by the price fixing and scams of the NAR, the financial institutions and our bureaucracy. They gather to create the new scams to steal from the common people. The people have lost faith, and the trust in our system, and once the trust is lost, it is gone forever. Real estate has become the worst investment (?) you can make. They gather in Washington to again sharpen the spear of financial ruin for their next victims. I see they raised 80 million for the payoffs.

Note that this inflammatory comment got 29 “thumbs up” and 12 “thumbs down”.

And it goes on and on like that in the comments section of MSN story. You have REALTORS who come on in defense of… well, themselves. Like “M” (why no real name?) who writes:

I am a Realtor and have been for over 27 years. I do not think most of us are parsitic. We facilitate a sale. If every home were sold by owner, someone else, like attorneys would make the money and in the long run, we are cheaper than if an attorney handled everything. Most homeowners have one house to sell, which tends to turn off many buyers. I work hard to bring the right buyer and seller (property) together. This could not happen without an agent to bring the two together. Just think of how may dealerships you visit to find the right car. Imagine if that were the way homes were sold.

Let us get this clear. Real Estate agents did not (in the whole) talk people into over paying. The “market” did that. There were multiple buyers for each listing and competitve bids drove the price. The lenders were offering loan products with very little or no qualification. Theri appraisers were “encoraged” to support that price. These loan products were not the real estate agents’ ideas. They were lender products. People who never thought they would own a home did so – and often could not maintain the ownership.I will not go into detail on what happended to the mini qualification loans, but basically they had a high default rate. Investors had bought these loans as well qualified loans, which due to repackaging (look this one up, your brain will fry) ended up mis represented. A lot of loan paper (think product) was now devaluled significantly. Compare this to buying stock of a company who did not disclose their acurtal financial failure. Worthless stock/wothless mortgage paper! Do not blame the Realtors for this. We were reacting to, not driving the market.

Think now what fewer homeowners mean – more landlords!! In our area investors are driving the market with bidding wars and the investor leading the pack. We have seen rents increase 20% to 50% in the last few months….

Every week we get new tighter guidlines on loans for home buyers. Fewer loans, fewer buyers, Realtors are working to try and protect home ownership. Don’t knock it, support it — unless you are content to be a renter for the rest of your life!

That comment got 2 “thumbs up” and 6 “thumbs down”… and resulted in these replies:

A real person (!) named Alexandra Rodriguez:

I was kinda with you until you basically compared renting to communism. You knew. You were complicit. You did nothing. My generation sees through the smoke and mirrors. Home ownership isn’t worth it unless you have a very specific set of qualifications. I I can’t even say “it doesn’t work for everyone”; after watching my parents see their home values drop, making their homes an anchor around their necks, no thanks. I suggest finding another line of business. Millennials aren’t falling for it.

And then a “fulldisclosure”:

It’s always easy to place the blame on someone else. You, as a realtor took part in the whole stated income, stated assets prequalification as to facilitate closings. You probably encouraged buyers to go that route instead of the traditional full income and asset credit qualifications that may disqualify your buyer. For you to pass the blame to the lenders is a cop out on your part. As a wholesale lender that dealt with mortgage brokers, I’ve seen strong armed tactics by realtors to press mortgage brokers to push buyers into loan programs and for that matter into homes the buyer could not afford. And by-the-way, you need to run spell check as your spelling is unacceptable.

Now, look… are some of these commenters the typical morons you find on the wild and woolly world wide web? Yes, they are. Are some of these people ill-informed? Yep, they sure are. Can you simply ignore these comments as stupid, ill-informed, Internet trolls? Maybe….

But what I found so telling from those comments is this: where are the statements of support from the ranks of the 75 million homeowners whom Sen. Isakson says REALTORS speak for?

Where is the non-REALTOR jumping into this saying, “You guys are cranks and nuts; REALTORS are not to blame. And homeownership does matter.” Where are the voices from the actual public wanting to save the American Dream?

Desperately Seeking A New Paradigm

Given the two factors above, I am now more convinced than ever that organized real estate must seek a new paradigm for political action.

There is simply no way to get around the stark reality that even with a virtual rally tool, making it possible for busy REALTORS around the country to get involved without the time and expense of physically traveling to Washington DC, only 2.7% of REALTORS participated. Is there some scenario in which 2.7% participation is acceptable to the leadership of the local, state, and national Associations? The Rally to Protect the American Dream may have been a success under traditional metrics — decent physical attendance at the event itself, statements of support from important politicians, energizing the base, etc. — but… if you’re a typical Government Affairs Director, how excited are you to go talk to your local congresscritter to threaten them with the REALTOR vote?

“I represent 5,000 REALTORS in your district, Congressman!”

“Yes, but only 3% of them give a damn, so I’ll take my chances with losing those 150 votes.”

“We’ll send RPAC funding to your opponent!”

“Okay, I’ll just have to suck it up and take the SEIU money instead. By the way, have you seen the new SuperPAC’s from the banks? Wow, do they have a lot of TV advertising money!”

Meanwhile, the congressman’s young Millennial intern knows Google-fu and can find out that public opinion runs against REALTORS, based on things like blog comments.

This is not a path to power and victory.

The Art and Science of Public Persuasion

I have already laid out some ideas on how the Association can turn things around, to implement a new paradigm for political power:

My suggestions for a leaner, meaner Association, made up of only those committed REALTORS who truly believe in a vision and a mission for organized real estate leads naturally to adopting those newer technology-enabled social organizing models that have been successful from Egypt to Utah. It is the new hotness of political activism, and it is one that NAR, State and Local Associations desperately need to adopt.

Let me just add one thing on.

The purpose of the social organizing model is to persuade the public. The point is to have homeowners defend their own rights, with leadership from REALTORS who know what’s what in terms of policy. The days of persuading the public through a press release, or a theatrical rally, or getting politicians to say nice things about you may be behind us. If people already agree with you, then great — those things will reinforce their agreement. But if people do not agree with you, or do not know what to think, that whole top-down model is showing signs of failure across the political spectrum.

Persuasion, in the social age, when people are no longer getting all their news from three TV networks, and a couple of newspapers, can only happen one-to-one or in small tribes.

It is no longer enough for NAR and the Associations to rally the base of REALTORS. Yes, it would be enormously helpful to get more than 2.7% of REALTORS to come out for a major political initiative, but even if 90% of REALTORS were to come out and get excited, that would not be enough going forward.

What needs to happen is for those excited, rallied, committed REALTORS to start informing, educating, politicizing, and organizing some of the 75 million homeowners on whose behalf they struggle. I believe REALTORS are uniquely capable of doing just that: educating and persuading the public.

As I’ve said, this is the New Hotness. And it is the path to power and victory for the next 100 years. And it is the new paradigm that NAR desperately needs to embrace, and sooner rather than later.


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Rob Hahn

Managing Partner of 7DS Associates, and the grand poobah of this here blog. Once called "a revolutionary in a really nice suit", people often wonder what I do for a living because I have the temerity to not talk about my clients and my work for clients. Suffice to say that I do strategy work for some of the largest organizations and companies in real estate, as well as some of the smallest startups and agent teams, but usually only on projects that interest me with big implications for reforming this wonderful, crazy, lovable yet frustrating real estate industry of ours.

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