Land Use Initiative & Technical AssistanceA
The Land Use Initiative is a program designed to assist state and local REALTOR® Associations in their public policy advocacy of land-use issues. Upon request, NAR will provide expert analysis of the legal, planning, economic and environmental issues surrounding legislative and regulatory land-use proposals. The initiative has helped state and local REALTOR® Associations across the country deal with a variety of land-use and Smart Growth issues. NAR, through its consultant, has provided guidance and expert opinion on more than 800 different legislative and regulatory issues that effect the interest of REALTORS®.
Resources available through the Land Use Initiative include the:
- Growth Management Fact Book: Provides in-depth discussions on land-use management policies. Consulting this reference can be a good first step in determining how to proceed with a land-use issue. Access this reference if you need to get up-to-speed on various land use management techniques and their impact on the real estate industry.
- Land Use Memo Database (Log-in required): Research various land-use management proposals and their impact on the real estate industry. This information can help craft your association’s response to proposed local ordinances.
Questions? Contact Adriann Murawski at 202-383-1068.
Land Use Initiative Application
- Complete Part 1 of the Land Use Initiative Tracking Form 1, including the signature of the association president, AE or GAD. Also note on the form any specific concerns and any desired deadlines, such as hearing dates. Submit the Tracking Form and the land use document to be analyzed to Adriann Murawski or Joe Molinaro.
- NAR will review the submitted plan, legislation or regulation to ensure that it conforms to the requirements of the program. If the proposal is accepted, the material will be sent to NAR’s consultant Robinson & Cole. The submitting association will receive a notice by email that the material has been accepted for analysis.
- Robinson & Cole will review the material and make telephone or e-mail contact with the association within three business days of receipt of the material. If requested, Robinson & Cole will provide a written analysis within 15 working days of receipt of the material. This written analysis will be faxed to both the requesting association and NAR.
- Within 10 business days of receipt of the analysis, the state or local REALTOR® Association should submit the evaluation form (Land Use Initiative Tracking Form: Part 2) to provide NAR feedback on the service and suggestions for improvement of the program. Submit the Tracking Form to Adriann Murawski or Joe Molinaro.
Twenty requests were processed during the first three months of 2018. Of the requests, 55 percent were related to rental regulations, primarily short-term/vacation rental regulations.
- Short-term rental (STR) regulations include rental registries and/or specific zoning areas where STRs may be permitted or prohibited. Of significant note, two communities proposed registration fees that were unreasonably higher than other jurisdictions, $1000 in Orange Beach, Alabama and $904 in Walworth County, Wisconsin. Presumably, the high fees are an effort to deter property owners from renting units on a short-term basis. Typically these fees range from $100-$250. The Baldwin County Association of REALTORS® was able to reduce the $1000 fee to $500. Further, there are two pending ballot measures in California that would ban STRs. NAR’s Issues Mobilization is also involved with efforts to prevent the STR ban in Palm Springs and South Tahoe.
- Affordable housing regulations were introduced in Telluride, Colorado. The average sales price for a townhouse/condo is over $1.1 million. Within the affordable housing package, a proposed housing mitigation fee for residential development would increase from 60 percent to 90 percent. While keeping the commercial mitigation rate at 40 percent. Housing mitigation rates are comparable to impact fees, the mitigation percentage determines the fee amount based off the new development project’s size/square footage. While the Telluride Association of REALTORS® recognize the need for affordable housing, the calculation of the mitigation fee is arbitrary, ultimately serving as a punitive measure to residential development. Not only could this proposal deter residential development in Telluride but drive it to other communities with significantly lower impact fees.
- A Formula Business Ordinance (FBO) proposed by the City of Holmes Beach, Florida was reviewed for the REALTOR® Association of Sarasota and Manatee. FBOs have come up in other communities as an effort to protect the unique character of a community and local small to medium business owners. FBOs generally seek to prohibit group or chain stores from dominating the market. The Holmes Beach proposal is notable for two reasons: (i) FBO was targeted for a specific commercial zone rather than a broad FBO applicable to all land use zones that have been proposed in other communities and (ii) an unintended consequence would have banned real estate companies with more than 11 offices in the world, such as Keller Williams. The Sarasota REALTORS® were able to amend the adopted ordinance to specifically exclude real estate franchises from the FBO, which is considered a huge win for the association.
A total of fourteen requests were processed during the months of April through June. There were a mix of proposed ordinance issue areas: short-term rentals, vacant properties, comprehensive plans, to name a few.
- Three jurisdictions proposed short-term rental regulations (Indian Harbour Beach, Florida; Columbus, Ohio; State of Massachusetts). In Massachusetts, a piece of legislation (H.4327) passed the House that included a liability insurance mandate for hosting platforms of short-term rentals. The hosting platform definition could include real estate brokerages, particularly if they offer online bookings for short-term rentals. Further, the legislation included a requirement that hosts make short-term rental records available to the MA Dept. of Revenue. In addition, the bill included significant restrictions: limiting the number of days hosts can rent units, a requirement for hosts to obtain a business license and only units owned by primary residents to offer short-term rentals. A stripped down version (S.2400) passed the Senate. A conference committee formed to work out the differences.
- Two jurisdictions proposed vacant property type ordinances (Oakland, California and Cleveland Heights, Ohio). The City of Oakland proposed a vacant property tax on property that is not in active use for at least 50 days per year. The tax rates ranged from $3,000 to $6,000 depending on property type. The taxes collected would be deposited in a vacant property tax fund to provide services and programs to homeless people and support affordable housing. The other city, Cleveland Heights, proposed a measure that would require a cash bond of at least $15,000 when the property is in foreclosure. The purpose of the bond is to secure continued maintenance of the property during its vacancy. Robinson & Cole recommended that the REALTOR® Association discuss the ramifications of the bond requirement for the borrower and how financial institutions recover costs and/or fees from foreclosures so the bond requirement would place additional financial burdens on property owners.
- Local governments in historical or unique areas use design standards to ensure consistency in the look of homes or buildings within the community. A city in Illinois (Oak Park) proposed design standards in response to resident complaints about newly constructed homes that are “out of character” with the existing homes. The proposal included specific compatibility standards for new roofs, dormers, upper-story additions, windows and siding. In general, there are pros and cons to design review. If carefully implemented in an area it can enhance property values. On the other hand, design standards can be costly and may exclude affordable housing development that cannot comply with the standards.
A total of ten requests were processed during the months of July through September.
- Three jurisdictions proposed short-term rental regulations (State of Nevada; City of Salem, MA; Summit County, CO). The NV regulation came from the State Fire Marshal. Within the proposal, newer building codes were being considered. This included vague language that any short-term rental could be classified as a “lodging house.” The potential change in classification of short-term rentals would enable local governments to impose mandatory inspection or permit requirements.
- NOTE: Keep an eye out for additional resources on short-term rentals that will be released before Annual: advocacy tips and a compilation of state laws on taxation and regulations.
- Two jurisdictions proposed regulations regarding stormwater management (Greenville County, SC and City of Fort Worth, TX). In Fort Worth, the city is considering a floodplain policy that would change the city’s stormwater development review process. Flood hazard areas are identified through the city’s drainage criteria manual not Federal Emergency Management Agency (FEMA) mapped floodplains. Initial feedback suggests the areas identified will involve more uncertainty and less precision identifying flood risks than the approach used under FEMA’s NFIP program. This proposal is in the early stages and the Greater Fort Worth Association of REALTORS® has a seat on the Advisory Committee. Concerns discussed are: potential adverse impact on property values, application of development standards, potential increases to flood insurance premiums, seller disclosures, impact on city resources, confusion for lenders, etc. The City appears to be very open about the process and consistently communicating with community members and stakeholders.
- In Colorado, ballot initiative #108 proposes to amend the Takings Clause of the Colorado Constitution to require that “just compensation” be paid when private property is “reduced in fair market value by government law or regulation.” Initiative #108 is in response to ballot initiative #97 which proposes a statutory change to the setback requirements for new oil and gas development from 500 feet to 2,500 feet. Ballot #97 is spearheaded by environmental groups whereas ballot #108 is backed by the CO Farm Bureau and the oil and gas industry. If ballot measure #108 were to pass, it would apply to all government laws and regulations without exception for laws or regulations enacted for the protection of public health. Further, ballot #108 would add six words to the CO Constitution raising several questions as to how it would be implemented. The CO Municipal League Executive Director said, if initiative #108 passes, “my advice to counties and municipalities, don’t do anything – no zoning, no ordinances.” This is a huge red flag for the potential cost to cities (i.e. taxpayers) to defend lawsuits if initiative #108 were to pass.