Land Use Initiative

Maryland’s Coastal Association of REALTORS® Battles Restrictions on Short-Term Rentals

The local REALTOR® association representing three counties on Maryland’s Eastern Shore was aware that Worcester County was looking to overhaul its outdated rental code, but was expecting the effort to focus on clarity and uniformity of language. What was presented was a set of severe restrictions on short-term rentals, which is naturally a major issue in coastal communities. When some of the County Commissioners proved unreceptive to the REALTORS®’ initial advocacy, it was time to call on the Land Use Initiative and Advocacy Everywhere programs. The County Commission heard the message loud and clear, and sent its proposal back to the drawing board.

Sarah Rayne, Government and Public Affairs Director of the 1,000+ member Coastal Association of REALTORS® of Maryland, recalls the list of restrictions the County Commission was proposing:  “They wanted to limit the number of ‘unrelated’ people in a short-term rental unit to five; to require all short-term rental units to install an extra parking space; to define ‘short-term’ as under twenty-eight days; and even to prohibit birthday parties, showers, and other special events. The REALTORS®’ position is that a short-term rental is still residential, and so all these restrictions were simply unfair.” The ordinance also sought to create a rental license requirement, which Rayne notes that the REALTORS® do not oppose, as long as the fee is not exorbitant.

While the REALTORS® have strong relationships with most of the Worcester County Commissioners, it was clear that their first efforts at direct advocacy were not getting through to some. So, Rayne commissioned a Land Use Initiative review of the proposed ordinance to analyze land use and zoning legislation. “I’ve worked with them a number of times, and they’re always great – they seem to thrive on tight deadlines,” she says. “This time, they sent us sixteen pages of very useful information, which we condensed into a brief position statement and sent to our members, the media, and the County Commissioners.”

Just a few days prior to the vote, some of the Commissioners were still resistant to the REALTORS®’ reasoning. “That’s when we realized, ‘Ok – we need to get our members involved!’” says Rayne.  “We’re a small association, but our members are great, and very supportive of our Government Affairs efforts and advocacy.”  Rayne called on Susan Mitchell, Director of Government Affairs for the Maryland REALTORS®, who activated an Advocacy Everywhere effort using REALTOR® Party Mobile Alerts. “It’s such an effective program,” says Rayne, “it was very easy for our members to respond.” And respond they did: the alert went out on a Friday, and over the course of the weekend, the seven Worcester County Commissioners were bombarded by more than 630 emails from 90 unique addresses.

At the next meeting of the County Commission, several members of the Coastal Association of REALTORS® of Maryland were present and testified on behalf of property owners.

The Commission voted to approve the creation of a rental license and sent the rest of the proposed ordinance back to staff for re-drafting. “They’ll be addressing many of the REALTORS®’ concerns in the re-write,” explains Rayne, adding, “It was a definite win for property owners and our members. I’m certain that our call for action made a big difference.” Although the association is small, she says, REALTOR® Party resources help it achieve results that are relatively major. “I’m a big fan of all these tools that allow us to create such an impact!”

To learn more about how the Coastal Association of REALTORS® of Maryland is protecting the rights of homeowners in Worcester County and beyond, contact Government and Public Affairs Director Sarah Rayne at 410-641-4409.

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Royal Palm Coast REALTOR® Association Keeps Redundant, Burdensome Zoning at Bay

In the last three years, more than 45 municipalities across Florida have modified their vacation rental ordinances to be more restrictive. In Cape Coral, a seasonal residence for many homeowners, REALTORS® aided by a Land Use Initiative led a successful charge to keep additional restrictions off the books.

The rush to update ordinances covering vacation rental issues is explained by Chris Lopez, Public Policy Director of the 7,300-member Royal Palm Coast REALTOR® Association, which serves two counties along the Gulf Coast:  “It became evident several years ago that there was a big gap in ordinances dealing with the technology that brought us all the on-line booking platforms. The instinct seems to be to create a whole raft of new ordinances addressing the perceived ‘threat,’ rather than investigating the suitability of what already exists in local code. City Councils also reflexively jump on the ‘gap’ as a funding opportunity, where they could impose registration fees, fines for violations, and collect business and rental taxes on these properties. Our goal has been to minimize this excessive government involvement.”

Faced with a proposed new set of such ordinances, the Royal Palm Coast REALTORS® applied for a Land Use Initiative review by NAR consultants. “It’s always my first step, in cases like this,” says Lopez, noting that, “if we can use this legal expertise in early conversations with city leaders, we may be able to head-off expensive efforts for both sides down the road. Having the national and state framework that NAR consultants provided was extremely persuasive in these meetings, and in workshop settings when we seek to re-draft legislation, and in support of our testimony during public hearings. It’s a powerful ace-up-the-sleeve.”

The REALTORS®’ strongest objection to the Cape Coral proposal was that most of the concerns it attempted to address were already covered by existing city ordinances. “We have regulations regarding noise. We have rules about parking, and trash collection, and property upkeep. All these issues can be effectively managed with a call to the police. There is simply no need to duplicate the legislation by adding a redundant layer just for vacation homes.” Beyond that, the economic burden that the new rules would impose on affected property owners and businesses could be onerous. After a good faith effort at workshopping the proposed Cape Coral ordinance with city staff and a like-minded coalition of organizations, including Airbnb and the Florida Vacation Rental Managers Association, the REALTORS® found that they still could not support the resulting compromise language.

At that point, reports Lopez, they mobilized REALTOR® members and the general public with a mailing. “At the second public hearing on the ordinance, we filled the room with business people, REALTORS®, and homeowners, many of whom voiced their fears that these overly restrictive measures would affect their ability to live and do business in Cape Coral.”  There was no one to speak in favor of the proposed ordinance, and the City Council was forced to concede that the protections in place were adequate, if no one wanted them changed. “It was a pretty great victory,” admits Lopez: “going in to the hearing, the outcome was a toss-up. After our people had their say, all seven Council members and the Mayor had come around to our way of thinking.”

“I can’t speak highly enough about the service that Robinson & Cole provides,” he adds. “These collective resources of the REALTOR® Party that can be called into play when high stakes are on the table are so important, and form a critical part of our ongoing advocacy. We keep a constant eye on local municipal agendas, and work hard at maintaining strong relationships with our civic leaders, so we’re able to be fully engaged and keep finding good solutions for our communities.

To learn more about how the Royal Palm Coast REALTOR® Association is keeping a vigilant eye on short-term rental ordinances and other legislation of concern to Southwest Florida property owners, contact Public Policy Director Chris Lopez at 239-936-3537.

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Greensboro REALTORS® Tackle Additions to City Zoning Code

“No one wants unsafe housing,” asserts Nick Scarci, Government Affairs Director of the Greensboro Regional REALTORS® Association (GRRA), “but city code must be reasonably fair to landlords.” This sums up the stance of the local REALTORS® in a legislative whirlwind that began in late September, when a newspaper article revealed that the City Council was considering three significant additions to the municipality’s existing code. The alterations were well-intentioned, proposed in response to a devastating apartment fire in the spring, but their full implications for property owners were not well considered. Although updated code eventually passed, its provisions were informed and tempered by a thorough analysis that the GRRA commissioned through the REALTOR® Party’s Land Use Initiative (LUI) program.

Scarci, who was aware of the LUI program but had never had to use it, got hold of the bill with just enough time to submit it for review and have the proposed legislation and code analyzed.

The first new provision would allow city inspectors to inspect an entire apartment building based on issues found in one unit; the second would create a ‘worst offenders’ list citing the top 10% of properties with the most code violations and police incidents within the city; and the third would allow for the designation of a square-mile ‘blighted area,’ within which the city could inspect every property. It was this last proposal that the REALTORS® found especially troubling, in that the homes of responsible owners would be caught in such ‘blighted areas,’ devaluing and stigmatizing their property.

Says Scarci, “The Land Use Initiative review is an excellent tool for someone like me, who does not have a strong legal background to grapple with potentially complex issues. Consultants turned the analysis around even faster than we expected; I received a call from them the day after I submitted our documents.  It was timely and constructive.”

The REALTORS® received the legal analysis about a week prior to the vote by the City Council, reports Scarci, and he was able to communicate the feedback to key council members through back channels. Monitoring the proposals online, he could see that, prior to the vote, the language was updated a number of times for the better, and the final provision was actually struck entirely. “It was very apparent that the Council hadn’t understood the full significance of the bill they were considering,” he says, acknowledging that the legislators were under pressure to take strong political action in the aftermath of the apartment fire, and felt obligated to take extreme measures into consideration.

Although the updated proposal passed, the concerns raised by GRRA convinced the city to meet soon after with a delegation of Greensboro REALTORS®, their Association Executive, Mike Barr, and their Government Affairs Chair, Wayne Young, together with representatives from the Greensboro Landlord Association, to revisit the newly adopted code provisions. Staff from North Carolina REALTORS®, especially Senior Vice President of Government Affairs Cady Thomas, also provided valuable input regarding relevant state code, notes Scarci, adding, “We’re very fortunate in having a diverse and talented membership and leadership providing insightful feedback on the new code. Between their expertise and the analysis provided by the REALTOR® Party, I think that in the future, the city will see us as a valuable resource when it’s looking to make rational updates to the existing code.”

To learn more about how the REALTORS® of Greensboro, North Carolina are working to craft local zoning code that is both safe and fair, contact Government Affairs Director Nick Scarci at 336-808-4234.

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South Carolina REALTORS® Commission Analysis of Questionable Proposed Legislation

In South Carolina’s 2018 legislative session, three separate pieces of legislation raised red flags to the South Carolina REALTORS® (SCR,) as matters requiring closer scrutiny. They ran the gamut from Inclusionary Zoning and a Clean Energy Act to homeowner insurance. Through the REALTOR® Party’s Land Use Initiative Program, the REALTORS® received a timely expert analysis to strengthen their position and planning.

Last fall, a bill called the South Carolina Inclusionary Zoning Act proposed that up to 30% of housing units within a multifamily or single-family development be sold or rented as affordable housing. Lindsay Jackson, SCR’s Government Affairs Director, explains that while affordable housing is a topic that often arises in a strong real estate market, sometimes inclusionary zoning initiatives can have an adverse effect, acting as a tax on housing construction that can be passed on to consumers, producers, and landowners. “For example, if a developer is required to rent or sell a percentage of their new housing units at below market prices, this can cause the remaining units to increase in price as they will have to make up the difference. As a result, such policies can actually exacerbate the affordability problem they’re trying to address.” A thorough analysis of the bill prompted SCR to conduct an in-depth statewide study looking at housing affordability and the impacts of mandated affordable housing; while the bill did not progress any further, Jackson says the REALTORS® will continue to work on the issue looking ahead to the 2019 session.

Early in 2018, a Clean Energy Act was proposed for the state of South Carolina, which would authorize local governments to enact ordinances that create clean energy zones, in which commercial property owners could secure private loans, funded through a property tax bill, to make clean energy improvements. SCR’s concerns regarding both the hybrid nature of the tax-loan, and the consumer protection issue of such a loan commanding first lien position, were confirmed and further analyzed by NAR consultants, who investigated negative results of similar legislation in the state of California.  The bill did not pass in the House due to time constraints, but SCR is prepared to continue supporting consumer protection and financing stability as it monitors the issue in the upcoming session.

A third bill that appeared objectionable to SCR proposed allowing counties to establish a windstorm protection and homeowners insurance program to assist with the cost of qualified wind resistance improvements. While especially sensitive to the needs of property owners in a state that was twice pummeled by major hurricanes this year, the REALTORS®’ concern was with the lien priority imposed by the type of lending proposed in the bill. Once again, there was no movement on this legislation in the 2018 session  “I expect to see all of these issues again in the 2019 session, so outcomes are ultimately still pending,” says Jackson, adding, “We’re well positioned to face them and work toward better solutions, thanks to this technical help we’ve received from the REALTOR® Party.”

She continues, “The services provided are an excellent resource for the SCR Government Affairs and Legal staff on issues that are important to our membership and the industry. The thorough and timely analyses of legislation that could potentially impact the industry are extremely beneficial during the legislative session. These products provide our team with the expert knowledge necessary to assist in the policy-making process.”

To learn more about how the South Carolina REALTORS® monitor and analyze property-rights and homeowner protection issues as they appear in proposals slated to come before the state legislature, contact Lindsay Jackson, Director of Government Affairs, at 803-07-2129.

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Land Use Initiative Q2 Report

The Land Use Initiative provides expert analysis and guidance of the legal, planning, economic and environmental issues surrounding legislative and regulatory land-use proposals to state and local REALTOR® Associations upon request. Below are the key highlights from second quarter of 2018.

Key Highlights:

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).
  • Two jurisdictions proposed vacant property type ordinances (Oakland, California and Cleveland Heights, Ohio).
  • Local governments in historical or unique areas use design standards to ensure consistency in the look of homes or buildings within the community.

Read the full quarterly report online and learn more about the Land Use Initiative.

 

Questions? Contact Adriann Murawski at 202-383-1068.

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Greater Boston Board Works toward Zoning Reform

The Greater Boston Real Estate Board (GBREB) may technically be a local association, but as it serves the capital city, what it does at City Hall often sets precedent for the entire Commonwealth of Massachusetts. For the past few decades, in partnership with the Massachusetts Association of REALTORS®, GBREB has been wrestling with the complicated and often thorny issue of zoning, with a goal of removing barriers to housing production and economic development. With them all the way was NAR consultant Robinson & Cole, LLC, the law firm retained to provide expert analysis of land-use proposals.

Patricia Baumer, GBREB Director of Government Affairs, explains the tremendous value that this Land Use Initiative brings to her board’s efforts to reform the antiquated zoning act governing the region. “It’s a difficult issue to begin with, made more so by the fact that it’s largely a matter of case law, at this point. There’s a lot of apprehension in the REALTOR® community about opening it up to change, as that could invite considerable political risk,” she observes. “But developers require predictability when it comes to zoning. So, it’s a delicate issue, and we’re very lucky to have NAR’s team of consultants navigating the necessary reforms with us, step-by-step. They’re nationally respected, smart, responsive and very hard-working; over the years, I’ve known them to work late to get us answers, and more than once, they’ve held our hands through tough negotiations in the State House. Hands-down, they are the single most indispensable tool in our toolbox.”

Last session, with Robinson & Cole facilitating, a joint GBREB/Massachusetts Association of REALTORS® working group dlooked at how existing zoning regulations contribute to the housing crisis by impeding the production of the quantity and variety of housing types; it became an omnibus bill sponsored in January 2015 by State Senator Michael Rodrigues, a REALTOR® Champion from the Boston suburb of Westport. From allowing multifamily housing construction by right and promoting smart growth with cluster development to reducing red tape on existing permits and reducing costs and permit denials by applying established federal law, the bill sought to dissolve obstacles to the development of much-needed housing stock, the lack of which hinders economic development in the region. While portions of the HOME bill were incorporated into an omnibus bill in the Senate, REALTORS® opposed the final version that came up for a vote, because of some other, highly objectionable, sections of the bill.  “On balance, it would have done more harm than good,” says Baumer.

“We are so grateful that the National Association of REALTORS® understands that this is such a complicated, nuanced issue, and one that we’re not going to resolve overnight,” says Baumer. The fact that they provide this invaluable resource, and that they stick with us with this continued support, will make the difference between Massachusetts achieving zoning reform or not.”

To learn more about how the REALTORS® of the Greater Boston Area are using the REALTOR® Party’s Land Use Initiative to address barriers to housing production across the Massachusetts, contact Patricia Baumer, GBREB Director of Government Affairs, at (617) 423-8700.

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Land Use Initiative & Technical Assistance

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 Holly Moskerintz at 202-383-1157.

Land Use Initiative Application


LAND USE INITIATIVE TRACKING FORM: PART 1
LAND USE INITIATIVE TRACKING FORM: PART 2 

  1. 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 Holly Moskerintz
  2. 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.
  3. 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.
  4. 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 Holly Moskerintz

Quarterly Reports

Download this report

A total of 15 requests were processed and approved during the 1st quarter of 2019. A noteworthy trend, no requests for review of local short-term rental regulations. This is notable because in the first quarter of 2018, there were nine requests for this issue. Environmental related issues came up in Sandwich, Massachusetts with proposed beachfront regulations. And in Birmingham, AL a storm water management ordinance was reviewed. Several requests were made by state REALTOR® associations for example, land bank legislation in Nevada, housing transfer agreements in New Jersey, solar systems and restrictive covenants in Delaware.

Key Highlights
In Somerville, MA, located northwest of Boston, a “Condominium Conversion” ordinance was introduced that would significantly alter the rules regarding condo conversions and specific tenant notifications, tenant or city ability to purchase, relocation costs, and obligations of a landlord to find comparable housing for elderly, disabled, or low/moderate income tenants. The analysis provided by Robinson & Cole focused on the provisions that would make condo conversions unreasonably difficult, if not infeasible (ii) vagueness of a Review Board’s authority to deny or impose conversion permits (iii) tenant notice and relocation requirements (iv) the unintended consequence of discouraging the production of rental housing and (v) a flat fee for relocation benefits.

Two projects of note
Land Installment Contracts in Youngstown, Ohio: What is a land installment contract? A company (vendor) retains title to property as security for buyer’s (vendee) obligation. A vendor is defined as “any individual, partnership, corporation, association, trust or any other group of individuals however organized making a sale of property by means of a land installment contract.” The Youngstown Columbiana Association of REALTORS® is working with the City to change the ordinance that has been termed “predatory.” Companies offer land installment contracts to people as an alternative to traditional financing (bank, credit union, mortgage company). Once the agreement is in place, the company retains all property rights while the buyer has to make all payments, property improvements, etc. with vague protections and high risk of default.

Right to Survive Ordinance in Denver, Colorado: Ballot measure would create an ordinance that would establish rights for all people in public spaces. While the initiative is intended to address homelessness it does not take into account the root causes of homelessness. The ballot measure would establish five “rights” to rest and shelter in public spaces for all people whether or not they are homeless or visiting the city. The analysis provided by Robinson & Cole focused on the challenges and applications of the proposed measure.

Key Highlights:

A total of 13 requests were processed and approved during the 4th quarter of 2018. Short-term rental type regulations continue to be a top issue reviewed under the LUI. Other issues that were consistent are zoning regulations that enable property inspections. For example, in Greensboro, NC, the city is looking to reduce blight by inspections whereas San Antonio is seeking additional authority for inspections of Senior Housing. Inclusionary Zoning measures were introduced in two cities New Orleans and Longmont, CO. A Transit-Oriented Development (TOD) proposal was reviewed from Rochester, MN.

Key Highlights

Inclusionary Zoning (IZ): Generally there are two approaches to inclusionary zoning laws: mandatory or voluntary. If IZ is required for new development there are certain specifications that a project must follow to provide affordable housing units although there may be a fee-in-lieu or off site development of the affordable units. If IZ is voluntary, developers are incentivized to build affordable units by offering a density bonus, flexibility in zoning restrictions (such as reduced parking or setback requirements), fee waivers, exemptions, favorable real estate tax treatment, favorable financing terms, and/or expedited permit review.

  • Louisiana: In May 2018, Governor Edwards vetoed SB 462 which would have preempted locals from adopting mandatory IZ measures. The Governor’s veto occurred because no municipality has adopted mandatory IZ but the Governor said “if local governments in LA do not pursue” IZ policies, he may sign similar preemption legislation in 2019. In essence encouraging locals to utilize this type of affordable housing development tool.
  • New Orleans: In an effort to avoid preemption, NOLA released a set of proposed mandatory IZ programs in Oct. 2018. The LUI analysis highlighted several factors. The mandatory nature of the proposals were not offset by any incentives to the affected developers which would likely have to pass the costs to buyers of market rate units. If market factors do not allow for an increase in costs, developers may be forced to reduce the amount of land costs, reduce quality of housing product, build elsewhere, or not build at all. The LUI analysis raised additional concerns and the need of the City to provide a thorough analysis of the economics of the local housing market. The analysis referenced an empirical study of affordable housing mandates in California, that concluded (i) “from an overall production standpoint, IZ has not been effective” (ii) “IZ translates into significant higher prices for market-rate homebuyers” and (iii) in addition to increasing prices, IZ leads to a decrease in new housing.”

Transit Oriented Development: The City of Rochester introduced a Transit Oriented Development (TOD) ordinance to link private land use and public transportation. This is in response to “community growth issues” such as encouraging land use patterns that support cost-effective transit, reduce need for high cost road improvements to alleviate traffic congestions, denser development to grow tax base and increase revenues, and development patterns that are energy efficient with reduced climate impact. The proposal consisted of transit corridors/walkable districts with sites of dense mixed use development. TOD ordinances include form-based code development regulations which move land code from designated uses to building form. The Rochester proposal would expand the uses in the TOD District, impose minimum and maximum setback requirements, and establish neighborhood protection standards. The proposed height bonus and mixed use development were recommended for the association’s support. However, the proposed City review process for larger lot development projects (10 acres or more) would have to undergo additional scrutiny so the LUI recommended areas to improve the ordinance for long-term success and implementation of the TOD ordinance.

Blighted Areas/Property Inspections: In Greensboro, NC the City introduced amendments to the housing code that would expand the City’s authority to inspect residential dwellings targeting “blighted areas.” The City’s proposal to designate areas of blight may cause unnecessary harm to properties that are not vacant or blighted which would negatively impact property values and may harm residents in close proximity to “blight” even if their property is maintained. The association was advised to resolve ambiguities of the “blighted areas” prior to adopting the law. The proposed amendments also indicated that the “top ten percent of properties with crime or disorder problems” obtain a permit from the City. Landlords with tenants associated with crime or disorder would be required to evict a tenant-which raises concerns under the federal Fair Housing Act. Finally, the proposal places policing and enforcing the law on rental property owners rather than the City because of the responsibility for conduct that takes place on rental properties. The LUI guided the association in requesting further consideration by the City before implementing the law.

For an in-depth review of these proposals see, Land Use Memo Database.

Key Highlights:

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.

Key Highlights:

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.

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Key Highlights:

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.
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Beverly Hills/Greater Los Angeles Association REALTORS

When an extreme and aggressive anti-development measure landed on the ballot in Los Angeles early last year, the Beverly Hills/Greater Los Angeles Association of REALTORS® took action.  It requested a Land Use Initiative review through the REALTOR® Party.  The association also secured an Issues Mobilization Grant for a strong opposition campaign.  Then it joined forces with an unlikely ally: the LA Labor Federation.  Together, Labor and the REALTORS® led a coalition to defeat the measure—one which sought to hold development in one of the nation’s largest cities to a standard established just after WWII. 

Measure S, explains James Litz, Government Affairs Director of the BHGLAAR, would have had a disastrous impact on the city, and set a dangerous precedent for years to come.  Proposed by a deep-pocketed organization seeking to protect its own view of an attractive landmark, the draconian measure would have stopped development completely for two years, and disallowed zone changes in perpetuity, effectively preserving an antiquated piecemeal code dating back to 1946. Beyond the obvious threat to the housing needs of contemporary Los Angeles, notes Litz, there were businesses to consider: “There’s a good chance we’ll be hosting the Olympics in 2024, and we’ve got to prepare.  Imagine restaurants being denied sidewalk seating by our paralyzed zoning code!”  

A counter-initiative called “Build a Better LA” was launched, and while not as restrictive as Measure S, it would have created further barriers to construction by raising labor costs on every development.  BHGLAAR submitted the text of both Measure S and Build a Better LA to the REALTOR® Party to review Land Use ordinances.  The report received back, says Litz, confirmed the REALTORS®‘ deepest concerns about the future of development in Los Angeles, and provided spot-on analysis in support of the opposition campaign that had already been mounted—by the Labor industry.

“Such an extreme proposition required an unconventional coalition,” says Rusty Hicks, Executive Secretary Treasurer of the LA Labor Federation.  Acknowledging that Labor and Business historically don’t see eye-to-eye, he adds, “In this case, the REALTORS®, having a foot in both camps, so to speak, served as an important bridge, and helped us to form an especially strong and effective coalition.  Their facilitation in bringing together other unlikely partners was key to our success.”

The resources the REALTORS® brought to the effort were also invaluable, he says.  Beyond the legal analysis, they supported the campaign with major funding from the REALTOR® Party, and the active involvement of many BHGLAAR members.  “Our membership was clearly concerned about the high profile ‘Yes on S’ campaign, which had the benefit of a huge inventory of billboards across the city,” reports Litz.  “If they were at all skeptical of teaming up with Labor, they still threw themselves into the coalition’s campaign to defeat the measure.  They participated in phone banks, and put signs outside their homes and offices.  Above all, they engaged in an energetic grassroots social media campaign.”  Television ads, an extensive door-knocking effort, and an educational website called GoesTooFar.com also boosted the opposition effort.

“We found that voter awareness was the key,” says Litz.  “When we could reach people about the truth behind Measure S, their vote turned against it.”  At the end of the day, the measure was defeated by 69% of the vote.

Says Hicks, “I’ve long argued that you don’t ever know someone until you’ve fought with him.  As tried-and-true ‘battle buddies,’ Labor and the REALTORS® are now working together to establish policy that will create more housing and job opportunities in Los Angeles.  Who’d have thought?  In the end, it’s a positive outcome from a dire threat to both our industries.”

Litz adds, “Beyond eliminating the immediate threat, we’ve also been able to leverage our win, politically.  We’ve just bailed the City Council out of a serious situation, and now it’s up to them to be responsive to the needs of the city.  They’re on notice that they must establish a viable new Zoning Plan, and make progress on affordable housing and housing for the homeless.  It’s still an uphill battle, but I think we’re already seeing a glimmer of progress.”

To learn more about how the REALTORS® of Beverly Hills and Greater Los Angeles are forging strong partnerships to protect and promote housing and business opportunities in their metropolis, contact Government Affairs Director James Litz at 310-704-2767.

 

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Land Use Analysis Helps Missouri REALTORS® Reshape Zoning Code Changes, Build Coalition

The city of Columbia, Missouri, home to the state university’s flagship campus, has been dealing with complex downtown housing issues for years.  The university is not interested in building more student housing, explains Brian Toohey, Chief Executive Officer of the Columbia Board of REALTORS® (CBOR).  This created a significant private housing market, and a deep divide between those who want to preserve the downtown environment as it was and citizens who favor a more progressive approach for the city’s growth.  When it came time to update the municipal zoning code, there was a strong move to make it more restrictive, and counter to the mixed-use, higher-density models that have proven successful elsewhere.  As the current City Council was not particularly “real estate-friendly,” CBOR turned to the REALTOR® Party for help.

Through the Land Use Initiative, CBOR submitted an early draft of the revised code, which included restrictive temporary zoning rules, for review by Robinson & Cole, the law firm retained by the National Association of REALTORS® for nationwide land use issues.  Toohey points out that applying for the review could not have been easier, and that the expertise that Robinson & Cole provides is invaluable.  “They send an executive summary and background information, and a list of items and recommendations to consider,” he says. 

The analysis provided by Robinson & Cole gave CBOR a basis for forming a strong community coalition, including the Columbia Apartment Association, the Downtown Community Improvement District, the Columbia Missouri Chamber of Commerce and the Central Missouri Development Council.  Armed with the legal review, the REALTORS® took the lead in creating talking points for each organization to use when communicating with the media and speaking before the Planning and Zoning Commission and City Council, and provided guidance for coalition members drafting letters to the city detailing their opposition to the zoning changes.  Faced with the analysis of Robinson & Cole as presented by the coalition, the Planning and Zoning Commission modified the temporary zoning rules. 

This success allowed CBOR to build an even stronger coalition when a subsequent draft of the code was released, and raised further concerns. 

Again, Robinson & Cole came through.   For example, explains Toohey, the second  review revealed documentation of a Supreme Court ruling regarding signage that was relevant to Columbia’s zoning draft.  When CBOR had the opportunity to meet with the consultants who were drafting the zoning code for the city, Toohey asked if they were aware of the case.  “They said yes, they did know,” he reports, “but they were amazed that we knew!” 

“Our input to the zoning review process has been respected and effective,” says Toohey.  The code won’t be finalized until some time after the mayoral election Spring 2016, he notes, but CBOR is pleased with the significant changes that have been made to the draft, which will protect property rights and benefit the development of the city moving forward.  He adds that he’d been making a push within his board to get more involved in local government and advocacy issues, but that there’d been a polite reluctance to ‘step on any toes.”  “This complicated zoning struggle that we’ve engaged in has demonstrated the very real need to be involved.  And now we know, first hand, the power of the REALTOR® Party.”

To learn more about how the Columbia Board of REALTORS® has been taking the lead on protecting downtown property rights, contact Chief Executive Officer Brian Toohey, brian@cbormls.com or 573.446.2408.

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Heartland Association’s (IL) Land Use Analysis Guides Local Development Ordinance

When McHenry County, a suburban and rural district just northwest of Chicago, rolled out the first draft of its Unified Development Ordinance in April 2014, the Heartland REALTOR® Organization (HRO) rolled up its sleeves and got out its red pencil—so to speak.  Actually, all it had to do was apply for a Land Use Initiative review, and within short order, expert legal guidance was brought to bear on the document that would be governing the growth of the county’s unincorporated areas through 2030. 

According to Conor Brown, Government Affairs Director of the 1,000-member association, the application process was simple and straightforward, and the resulting review was extremely beneficial.  His organization’s Government Affairs Committee was most concerned about two sections in the proposed ordinance having to do with the development of future subdivisions, an issue complicated by the county’s vast disparity in density, with mostly rural land in the west, and highly populated suburbs in the east.

In an initial conference call with Robinson & Cole, the law firm retained by the National Association of REALTORS® to undertake ordinance reviews, Brown provided background and an overview of relevant local politics.  “It was a very collaborative process throughout,” he says.  “After all, they didn’t want to produce a document I couldn’t use, or that wouldn’t have value to our members.” 

Robinson & Cole read through the several-hundred page draft ordinance with a particular focus on the two articles governing subdivision applications and standards, and returned a 15-page report providing a concise analysis of the sections, and recommended revisions.  “They identified multiple issues that were problematic, whether just plain vague and inefficient, or overly restrictive regarding property rights,” says Brown.  The report offered clear guidance and concrete examples from a neighboring county, which elected officials of McHenry County would find relevant, he notes.        

When Brown received the report, he delivered it directly to Joe Gottemoller, who was Chairman of the county’s Planning & Development Committee at the time, and has since been named Chairman of the full County Board.  “Joe is an attorney, and an elected official we’ve supported through RPAC,” says Brown.  “There’s always been a great professional rapport between him and our association, and he didn’t need to be told how to use the report: it was like being a quarterback handing the ball off to our star running back!”  Gottemoller relied on the Robinson & Cole analysis as he guided the draft ordinance through a grueling review and modification process, weathering dozens of proposed amendments.  It was finally approved six months later. 

What HRO achieved through the Land Use Initiative review, says Brown, is an ordinance that is more consistent; preserves responsible development rights; streamlines the development process; and limits regulatory burdens.  In short, “We left it a whole lot better than we found it!” he says, adding, “I would encourage any local REALTOR® association to leverage this resource, particularly if they don’t have access to good legal research.”

To learn more about how the Heartland REALTOR® Organization has contributed to local planning and development policy in McHenry County, Illinois, by making use of the REALTOR® Party’s Land Use Initiative program, contact its Government Affairs Director, Conor Brown, at cbrown@iar.org or 815-319-0943.

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