Concerning REALTOR Politics, A Few Thoughts


NAR’s Washington DC Headquarters Building

I recently had the privilege of attending an event in Southern California with the Pacific West Association of REALTORS(r) at which a California state legislator spoke on issues facing the state. There were some really interesting Q&A with the brokers in attendance, ranging from property tax issues to whether brokers would be paying payroll taxes and worker’s comp for their agents.

But in light of two things I’ve read earlier today, I’m really starting to wonder if the idea of “real estate issues” is too narrow. Perhaps what NAR, state and local Associations, and all those interested in housing-related politics need to do is a hard rethink on just what constitutes political issues relevant to REALTORS.

Let’s get into it.

Two Seemingly Unrelated Items

The first item seemingly unrelated to real estate and REALTORS is this piece from the American Interest on student loans and the debt collectors that go after them:

As a brilliant article by Andrew Martin in the New York Times (at its best, still the best when it comes to serious reportage) shows how federally contracted private debt collectors, more ruthless than the hounds that pursued Eliza across the ice floes in Uncle Tom’s Cabin, track broke and even disabled student loan defaulters down the decades of their lives.

Now, given that the title of the post is “Obama’s War On The Young” and given that the writer is very clearly slanted one way in the political dialogue, one is tempted to simply dismiss it as more partisan yammering in this crazy season. But note this:

This isn’t a minor issue in American life. Helping young people to make the transition from dependency into responsible adulthood is a critical task. When young people are so crushed by debt that they are delaying decisions like starting a family or buying a house, then the system isn’t working at a basic level. When growing numbers of young people are crushed by debts they did not understand, cannot pay and cannot discharge, then society is sitting on a time bomb. A generation of embittered deadbeats and angry, impoverished cynics is not the best foundation for a free and open society. When these alienated people living marginalized lives come disproportionately from the ranks of minorities, the divisive and destructive consequences of a social program gone to the bad can be serious indeed. (Emphasis mine)

An opinion piece about the broken student loan system, the “blue social model”, and so on ends up making the salient point that young people can’t buy houses when they have massive student loans to repay. This is a theme I’ve harped on regarding the Millennials that are supposed to be the future of real estate: they’re broke, they’re not getting married, and they’re not buying houses because of financial burdens.

Something completely unrelated to “real estate issues” such as student loan programs ends up directly impacting the REALTOR.

The second seemingly unrelated item is this report from the Manhattan Institute on demographic shifts in California. The conclusion of the authors is that California has gone from a migration receiver to a sender, that is, more people are moving out of California than moving into California.

From the Executive Summary:

For decades after World War II, California was a destination for Americans in search of a better life. In many people’s minds, it was the state with more jobs, more space, more sunlight, and more opportunity. They voted with their feet, and California grew spectacularly (its population increased by 137 percent between 1960 and 2010). However, this golden age of migration into the state is over. For the past two decades, California has been sending more people to other American states than it receives from them. Since 1990, the state has lost nearly 3.4 million residents through this migration.

As a right-leaning partisan think tank, the Manhattan Institute definitely reaches some conclusions that others might disagree with. Again, from the Executive Summary:

The data also reveal the motives that drive individuals and businesses to leave California. One of these, of course, is work. States with low unemployment rates, such as Texas, are drawing people from California, whose rate is above the national average. Taxation also appears to be a factor, especially as it contributes to the business climate and, in turn, jobs. Most of the destination states favored by Californians have lower taxes. States that have gained the most at California’s expense are rated as having better business climates. The data suggest that many cost drivers—taxes, regulations, the high price of housing and commercial real estate, costly electricity, union power, and high labor costs—are prompting businesses to locate outside California, thus helping to drive the exodus.

Presumably, those on the Left would draw different inferences and conclusions about the change in migratory patterns of California. Or at least they would recommend different policy considerations than what a free market libertarian would.

Nonetheless, there is no doubt that the net outflow of people from California has an impact on real estate and on REALTORS. Better business climate and taxes don’t immediately strike me as a “real estate issue” that the California Association of REALTORS should take a stance on… but… aren’t they in fact precisely the things that CAR does need to take a stance on?

REALTOR Politics, Reconsidered

That leads me down to thinking about what issues, exactly, are not relevant to REALTORS.

Just about everything affects, and is affected by, the housing market one way or another. New environmental regulations will certainly affect real estate values, but so will new teachers’ contracts. (I mean, there’s no doubt that school quality greatly impacts home values, no?) Zoning regulations affect real estate, of course, as does transfer tax schemes… but increases in electric rates also affect housing and real estate if they cause an employer to move manufacturing operations out of state.

We know that NAR is on the case when it comes to things like the mortgage interest deduction, the Qualified Residential Mortgage rule, or policies regarding Fannie/Freddie/FHA. But it doesn’t appear that NAR takes a stance on the “really big stuff” like Obamacare, entitlement spending, state/local pension shortfalls, public unions, what-else-have-you. You can read the full 2012 Advocacy Agenda for yourself.

Question is… should it?

And by extension, should the state and local Associations expand their definition of what is and is not a real estate issue? Seems to me that apart from some purely social issues — the really hot stuff like abortion, gay marriage (although, I suppose you could make an argument for it on housing grounds –> more marriage = more home purchases), etc. — almost every single government policy would impact real estate and housing in some fashion.

On the one hand, I could see the argument that if virtually everything impacts homeownership — and is impacted by homeownership/real estate — then REALTORS through their political action resources should be involved with everything. Associations and lobbying groups like AARP and AFSCME appear to be involved in virtually every single issue under the sun, for example. If something like a local NIMBY movement opposing offshore drilling, for example, affects property values in the area, shouldn’t REALTORS be involved in it?

On the other hand, I could also see the idea that it’s awfully hard to be bipartisan or nonpartisan focusing solely on issues directly related to housing finance, mortgage tax policy, etc. without pissing off half of the country. Organizations like the American Medical Association for example tend to focus on narrower band of issues. Trying to do too much could lower the impact of the lobbying efforts, after all.

So here’s a question for those of my readers who are active in REALTOR politics, whether as volunteers, as contributors to RPAC, or whatever.

How broad or narrow should REALTOR political advocacy be? Why?


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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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