SDAR Lobbies for Changes to Real Estate Legislation

Last week, I lobbied for some important legislative changes that will affect the real estate market in the years to come. I made a trip to Washington DC, alongside other top SDAR executives, to meet with the California representatives from Congress. The issues we discussed affect not only our REALTOR® members, but anyone looking to buy or sell a home in San Diego.

We make this trip annually and consider it an important part of our role as the voice of the San Diego real estate market. The goal is to ensure that San Diegans’ housing needs are met, not only at the local level, but at the national level as well.

As with most federal lobbying, the process is slow. But we have found these trips to be effective in the past. Last year we lobbied to raise the first-time homebuyer tax credit from $7,500 to $8,000 and to remove the repayment requirement. We also lobbied for higher conforming loan limits. Both of these initiatives were successful.

Some of the issues and our positions for this year are outlined below. Our overall goal for the trip was to ensure that any legislation passed in 2009 would benefit San Diego and stimulate the housing market as a whole.

Conforming Loan Limits
The 2008 economic stimulus bill included a temporary increase of the conforming loan limits (CLL) for high-cost areas of living. The CCL is the maximum amount that a buyer can borrow to qualify for a general loan. Once the buyer surpasses this limit, they are only eligible for a jumbo loan, which comes with a much higher interest rate. Therefore, by raising the limit, less people should have to take out jumbo loans.

In 2008 the elevated limit was slow to spur much improvement in the housing market because lenders were wary of the temporary nature. SDAR would like to see legislation passed to make this temporary elevation more permanent, especially since many areas to live in San Diego County are considered high-cost.

Energy Efficiency and Point of Sale Labeling
Recent legislation proposes the creation of Energy Star labels for homes and buildings and providing funds to states that implement a labeling program. While SDAR supports energy efficiency, we oppose this legislation because it includes point of sales mandates, which will add unnecessary costs to transactions. These costs will have to be an extra expense to the owner or REALTOR®.

Furthermore, energy labels will also stigmatize older properties, causing a loss in home value for these homes and the properties surrounding them.

SDAR does support other legislation that provides financial incentives for energy improvements, including H.R. 1778 and H.R. 1573.

H.R 1778, the Retrofit for Energy and Environmental Performance Program Act, aims to establish national energy and environmental building retrofit policies. These policies will make energy improvements for residential and commercial buildings.

H.R. 1573 would establish a National Home Energy Savings Revolving Fund within the Department of Energy. This fund will give money to local government to pass along to homeowners for home energy audits, and energy saving improvements.

Healthcare Reform
The overwhelming amount of REALTORS® are self-employed and are therefore, struggling to afford health insurance under the provisions of current healthcare legislation. As a result 28 % of REALTORS® are uninsured. The administration has made it clear that it will be reforming health care this year, and SDAR wants to make sure that any bill passed to reform National health care, has provisions for affordable health insurance for the self-employed, independent contractor, freelance and small business work force.

Preserving the Mortgage Interest Deduction
A longtime benefit of homeownership, the Mortgage Interest Deduction (MID) allows taxpayers who own their home to reduce their taxable income by the interest paid on their loan. The administration announced tentative plans to limit the MID for taxpayers with income higher than $250,000 (or $200,000 for singles) in order to fund health care reform. SDAR is strongly against this as it would take away one of the largest benefits to being a homeowner. While this is only in the proposal stage for the 2010 budget, it has potential for having a detrimental affect on the housing market.

We don’t know yet what the effect of our lobbying efforts will have on the San Diego real estate market, but we encourage you to get involved. Write to our representatives and let them know what you think about these and other important legislation issues. For more information on these legislative initiatives, visit realtor.org.

By San Diego Association of REALTORS® President, Erik Weichelt