GOVERNMENT AFFAIRS UPDATE
PAUL HERRERA, GOVERNMENT AFFAIRS DIRECTOR
IVAR Meets with Lawmakers in Sacramento, DC to Fight for Homeownership, Property Rights and Consumer Protections
In May, IVAR members traveled to Sacramento and Washington DC to discuss a series of proposed laws and initiatives that could significantly impact REALTORS® and the homeowners of today and tomorrow. On May 3rd, 18 IVAR members and staff joined 2,400 colleagues from across California for REALTOR® Legislative Day in Sacramento. Those numbers once again broke participation records from previous years. Below is a rundown of some of the issues REALTORS® discussed with lawmakers during Legislative Day.
AB 1059 – Dual Agency – Oppose
AB 1059, authored by Assembly Member Lorena Gonzales Fletcher from the San Diego area, is a bill that seeks to eliminate dual agency in commercial transactions. It would not affect existing rules governing dual agency in residential real estate. In practical terms, eliminating dual agency would disallow brokers representing end users of commercial properties from presenting real estate offered by their own brokerages. It would also cause businesses interested in a property they see advertised from contacting the company’s representative and working directly with that broker. REALTORS® made those points, arguing that through proper disclosure, businesses should be able to make their own decisions on representation. That same approach has worked well in residential real estate for nearly a generation. AB 1059 is not an immediate threat. The bill was shelved for 2017 but is available to return for consideration before the end of the current legislative session.
SB 640 – Sales Tax on Services – Oppose
REALTORS® also re-emphasized their opposition to SB 640, a bill that would lay the groundwork to impose sales taxes on services. If implemented, a sales tax on services would impact thousands of service-based industries and their customers. In real estate, where virtually everything is a service, a sales tax set at 5 percent would add more than $3,200 to the transaction cost of the median priced California home. If the tax were set at 7.5 percent, which is the current rate of sales taxes on goods, home buyers would see a new tax bill of nearly $5,000 on the median priced California home. The new taxes would push an estimated 37,000 to 55,000 Californians out of the housing market, with that impact focused directly on working class residents already struggling with affordability.
Housing Affordability – the Solution is Supply
Finally, REALTORS® discussed a series of initiatives designed to lower barriers to home building in California to help working families afford a home. Housing affordability has reached a crisis point in the state, driven primarily by the fact that the pace of new housing construction has lagged significantly behind population growth. The demand-supply imbalance has led to historically low levels of available inventory and price levels broached only when loose lending artificially pushed home prices through the roof in the mid-2000s.
The housing supply and affordability problem actually goes beyond homeownership. Lack of building has pushed rents beyond the means of many working Californians as well. There simply is not enough housing of all types to accommodate a growing state. While efforts to remove obstacles to make housing more available to working Californians have languished, other proposals have come forward to push government controls on rents as a quasi-attempt to address housing affordability. In reality, such measures may help the few lucky individuals who receive the rent control-based subsidies, but further exacerbates the housing crisis by driving out investment in new construction. REALTORS® asked lawmakers to reject those false solutions and embrace the idea that allowing construction of new homes to match population growth is the only sustainable approach to address affordability.
Support our Mission, Support the REALTOR Party
The most important thing each member can do to support our government affairs work is to stay informed and help spread the word on important issues to your colleagues, clients, friends and neighbors. Nothing is more important than your time, including the time you devote to making your voice heard at the ballot box each election day. Our work is supported through voluntary contributions made by members to the REALTOR® Action Fund. These annual contributions of $49 or more help ensure that we have the resources to research important issues, communicate with our members and mobilize our industry to have the impact necessary to make a difference. You can make a contribution as you renew your membership – or anytime by going to www.car.org/governmentaffairs/raf.
Questions? Comments? You can reach Paul Herrera, Government Affairs Director, at firstname.lastname@example.org or on his cell phone at 951-500-1222.