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Leadership Letter

State Rent Control Issue Takes National Stage

NAR CEO Bob Goldberg & 2019 President John Smaby

NAR CEO Bob Goldberg & 2019 President John Smaby

Across the country, various state and local governments are currently considering – or debating – legislative rent control measures.

However, these efforts are misguided. They do nothing to address residential construction deterrents like imprudent local zoning measures and high land costs. What rent control policies really do is help create political battles between landlords and tenants without addressing the root of – and possible solutions to – America’s housing affordability problems.

In response, NAR is working to fight rent control and rent stabilization laws on both residential and commercial properties.

Last year, California voters rejected a statewide measure that would have overturned the Costa Hawkins Act, which establishes limits on local rent control laws. Costa Hawkins ensures that buildings first occupied after 1995 are not subject to rent control regulations. Further, the law provides an avenue for vacancy decontrol, which gives building owners an opportunity to rehab facilities and establish new, fair market rates with new tenants.

From Portland, Maine to Portland, Oregon, several jurisdictions have recently considered rent control regulations. Most states preempt local governments from adopting rent control measures in any form. In the states where rent control is permitted (California, Maryland, New Jersey, New York and the District of Columbia), local jurisdictions are able to regulate rental rates based off specific parameters written within the state law. The aforementioned Costa Hawkins Act in California is an example of this.

Over recent years, Hawaii, Michigan, Minnesota and Washington, among other states, have considered legislation repealing prohibitions of rent control, although, thus far, no prohibitions have been successfully repealed. The most significant concerns are in states whose legislatures revisit rent control laws year after year. California and New York, for example, see regular efforts to expand the reach of rent control to include just cause eviction requirements and/or landlord-tenant relocation fees.

Illinois and Oregon have also revisited legislation to repeal existing bans on rent control and have the political support to pass legislation this year.  Oregon will be the first state to enact a statewide rent control law that requires local governments to incorporate rent control regardless of whether or not a housing shortage exists. This is unique, however, as most states allow local governments to decide if rent control is necessary. In Illinois, lawmakers are considering repealing existing rent control prohibitions as well as creating a state regulatory body to oversee rent control regardless of housing supply.

If states are successful in easing rent control restrictions, NAR is concerned that residential rentals in those areas will lose value, while both property tax assessments and bases will decrease, forcing other property owners to eventually pay more in taxes or fees as a result. Ultimately, rent control discourages the production of new rental dwellings in the private sector, and NAR is committed to fighting against these laws across the country.

 

 

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Unveiling Our Vision for Housing Finance Reform

NAR CEO Bob Goldberg & 2019 President John Smaby

NAR CEO Bob Goldberg & 2019 President John Smaby

Last Thursday, February 7, REALTORS® had the chance to showcase their leadership on housing finance reform in front of more than 400 industry professionals, NAR members and a few current and former Congressmen.

With reform to Fannie Mae and Freddie Mac on the minds of so many in Washington, NAR’s first-annual Policy Forum took an extensive dive into its work to ensure these Government Sponsored Entities can effectively serve the housing market and protect taxpayers in the years and decades to come.

At the conclusion of the Forum, those 400 attendees were given a first-hand, first-time look at detailed research outlining NAR’s vision for GSE reform. The whitepaper is already being referred to by both media outlets and industry trade groups as a critical building block for housing finance reform legislation. These discussions continue to gain traction on Capitol Hill.

The paper – and our vision – is true to our core. It offers policymakers a framework that leverages reforms and innovations implemented since the crisis while also promoting competition in the secondary market. Quite simply, our vision boils down to five key principles: protecting taxpayers by using private capital; minimizing costs to consumers; promoting housing accessibility and affordability; preserving the 30-year fixed rate mortgage; and maximizing access for creditworthy borrowers.

The housing crisis of 2007-2008 left Fannie Mae and Freddie Mac financially devastated, forcing the Federal Housing Finance Agency (FHFA) to move to place the GSEs into conservatorship.

While conservatorship remains more than a decade later, NAR has read the writing on the wall and is evolving to ensure our members and America’s housing industry are in the best possible situation should policymakers move to end conservatorship in the coming months or years.

Led by two of the best minds in the field, Dr. Susan Wachter, Professor of Real Estate and Finance at the University of Pennsylvania, and Dr. Richard Cooperstein, head of Risk Management at Andrew Davison and Company, Inc., NAR has presented a pragmatic solution to these challenges – prioritizing and protecting a liquid mortgage market for Middle America and underserved borrowers alike.

Our hope is that this work will result in GSE reform legislation that secures a government guarantee, ensures equal access for lenders of all sizes, promotes consumer affordability, maintains broad consumer access and protects the 30-year fixed rate mortgage.

To read the full working paper and its executive summary, please visit https://www.nar.realtor/fannie-mae-freddie-mac-gses/nars-vision-for-housing-finance-reform.

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REALTOR® Advocacy Continues Despite Government Shutdown

NAR CEO Bob Goldberg & 2019 President John Smaby

NAR CEO Bob Goldberg & 2019 President John Smaby

As of Monday, January 7, the partial shutdown of the federal government had become the third-longest in U.S. history, with White House and Congressional leadership still unable to reach an agreement on funding for southern border defense.

Currently, more than 420,000 federal employees are working without pay, including some at the IRS and Department of Homeland Security, while 380,000 workers have been furloughed from the Departments of Transportation and Housing & Urban Development, among others. In all, nine of 15 federal departments are closed, while dozens of agencies also remain shuttered. Fortunately, however, roughly 75 percent of government services are unaffected by the shutdown.

Still, concerns would deepen should the shutdown persist for additional weeks, and many Americans and federal government workers are certainly feeling the effects of the stalemate one way or another.

The situation becomes particularly bleak for all federal government employees who will not receive a paycheck until the government reopens. Obviously, any American who faces a temporary pause in income because of the shutdown could struggle to on time make payments in the coming days and weeks. That includes mortgage payments and bills for things like rent, car loans and student debt. Any delay in these payments could harm an individual’s finances and their credit, which would obviously impact their ability to buy a home or make other large purchases in the future.

During the shutdown, the U.S. Department of Agriculture is not issuing new rural loans or closing on direct loans. HUD, however, will still close on single-family loans, but furloughs at the agency could make the process longer and more difficult.

For ordinary Americans, this shutdown creates economic uncertainty and feelings of long-term instability. Buying a home is a high-stress transaction, and adding another complexity to the process with possible delays in the transaction only further hurts the economy and U.S. consumers. It could even begin to shave off GDP growth in a measurable way.

We will continue to work with congressional leaders and White House officials to minimize impacts of the shutdown on the housing market, and to ensure our 1.3 million members across the country are equipped with every resource necessary to continue operating as usual during the shutdown. We have also prepared a page which outlines all the ways you and your business could be impacted, along with a comprehensive document explaining the specific impact on each governmental entity that impacts housing.

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Staging for Advocacy Success

Victoria Gillespie and Shannon McGahn

Victoria Gillespie (L) and Shannon McGahn (R)

NAR took another step forward to ensure that your interests are heard in Washington with the announcement of Shannon McGahn. As senior vice president of government affairs, Shannon will report to chief advocacy officer Bill Malkasian. In addition, Victoria Gillespie was named NAR’s chief marketing and communications officer. We’re excited to welcome these powerhouse additions to NAR’s senior staff leadership.

We understand there might be concerns about Shannon having worked for members of Congress that were opposed to NAR’s agenda to protect incentives for real estate. Continuing our commitment to being open and transparent, we conducted a thorough, exhaustive process, and Shannon McGahn emerged as the clear choice. This included the creation of an advisory board that included a diverse array of association leadership from the national, state and local levels, as well as D.C.- based political consultants to guide us through the process. Advisory board members represented Republicans, Democrats, and Independents, ensuring our decision would have input from the broader opinions of our membership and this industry. And we were thrilled when she informed us of her decision to accept the offer to become this association’s next senior vice president of government affairs.

We are excited that Shannon is committed to advancing innovative, 21st century approaches to advocacy. In today’s political climate, this is more important than ever. The dynamic in Washington has changed, and we must evolve if we are going to maintain our significant influence in the nation’s capital. Shannon McGahn’s leadership, direction, and focus will ensure NAR remains America’s most prominent government affairs group.

We look forward to seeing everyone at the 2018 REALTORS® Conference & Expo in Boston in a few weeks. And hope everyone tunes in on Nov. 6 and 7 for the REALTOR® Party’s election coverage and post-election Facebook Live, where you’ll get to hear from Shannon directly. Don’t forget to sign our pledge to vote, and to head to the polls on Nov. 6.

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Preparation, Partnership, & Participation

bobGoldberg_sm.jpge_mendenhall.jpgAll the hard work we’ve done this year to increase our influence in an uncertain legislative, regulatory, and political environment has highlighted three key ingredients for success: Preparation, Partnership, and Participation. Throughout September, we are reminded of how these play out in our advocacy outreach efforts.

Preparation

As REALTORS®, we understand the importance for being prepared. Not only are we celebrating REALTOR® Safety Month, but we’ve partnered with the Federal Emergency Management Agency (FEMA) to raise awareness of National Preparedness Month. Disasters are never planned, but we can help our clients, our communities, and ourselves by raising awareness about disaster risks and the simple, proactive steps everyone can take to be better prepared. The resources offered from House Logic and Homeownership Matters can build a culture of preparedness and ready the nation for catastrophic disasters.

Partnerships

It’s also a busy time in Washington, D.C. This week nearly 10,000 people are in town attending the Congressional Black Caucus’ Annual Legislative Conference (ALC). This year’s ALC theme, “The Dream Still Demands,” focuses on the influence and legacy of civil and social movements over the last 50 years moments, while uplifting present-day champions in the fight for racial equality, justice, and freedom. The National Association of Real Estate Brokers hosted a special session, “A 50-Year Journey: The Fair Housing Act to the Current State of Housing in Black America.” In addition to sponsoring a reception, our Federal Political Coordinators, who are attending this five-day conference will have the opportunity to delve into important conversations with industry leaders from across the globe on housing, environmental, business-related topics.

Participation

We say this time and time again because it’s true: our political strength comes from you! When 1.3 million REALTORS® let elected officials know and understand our position on public policy issues, we are successful. We’ve seen this on tax reform, extending the National Flood Insurance Program, and many other issues at the state and local levels. With Election Day only 54 days away, we are asking REALTORS® to make a commitment to vote on November 6. Approximately 15% of membership, or 195,000 REALTORS®, are not registered to vote. National Voter Registration Day — September 25 — is an excellent opportunity to update their voter registration or register to vote.

We thank you for your commitment to the REALTOR® Party, and we look forward to seeing you in Boston!

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Making Our Voice Heard on Capitol Hill

bobGoldberg_sm.jpge_mendenhall.jpg The 2018 REALTORS® Legislative Meetings & Trade Expo is a reminder of the critical role advocacy plays in our goal to revolutionize this industry and prepare REALTORS® for sustainable future success. Advancing public policy that build strong communities and promote a vibrant business environment and supporting REALTOR® Champions at the national, state and local levels will help increase our influence in an uncertain legislative, regulatory, and political environment.

As thousands of our colleagues and business partners attend our Legislative Meetings in Washington, DC, we are also continuing to commemorate the 50th anniversary of the Fair Housing Act. We hope you join us at NAR 360 for a special Fair Housing presentation on Tuesday, May 15. The General Session on May 16 features U.S. Department of Housing and Urban Development (HUD) Secretary Dr. Benjamin Carson, who will reinforce HUD’s commitment to fair housing, and Congressman Emanuel Cleaver (D-MO), who will share his personal story of the importance of safe and affordable housing for all Americans. Stop by the Fair Housing display in the Marriott Wardman Park hotel lobby to reaffirm your committment to Article 10 of NAR’s Code of Ethics.

The Trade Expo features more than 130 exhibitors, and will be open Wednesday, May 16, and Thursday, May 17 from 10:00 AM to 6:00 PM. Stop by NAR booth #1707 for a Fair Housing commemorative pin. Before you leave for your Capitol Hill visit, stop by the Concierge Counter in NAR Booth on Wednesday, May 16 from 10:00 AM to 2:00 PM to pick up your free Metro card and map (available only while supplies last).

This meeting also represents an important opportunity for REALTORS® to meet with their U.S. Senators and Representatives, and communicate the issues critical to their businesses, communities and the consumers they represent. For those of you attending Hill Visits, be sure to review the materials and talking points before heading to the Hill. This is our opportunity to make our voices heard…Own It!

We look forward to seeing you in Washington, DC.

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