A state Realtor official swung by the region last week and presented members of the Silicon Valley Association of REALTORS® with a legislative update, which included a review of Realtor-sponsored bills and hot legislative issues impacting real estate.
California Association of REALTORS® staff vice president and legislative advocate Stan Wieg said the state REALTOR® group is particularly disturbed with the move by California's Senate Appropriations Committee to link the passage of SB 30 (Calderon) – Short Sale Debt with that of SB 391 (DeSaulnier) – Transfer Tax. SB 391 would apply anytime a property owner records a document (e.g., refinancing, transferring into or out of a trust, liens, quit claim deeds, etc.). Realtors see the linking of both bills as an attempt by legislators to extort support for the new tax on homeowners.
REALTORS® need to be aware of the shifting demographics of California's legislature and the potential impact of the "twelvers" and "fourteeners." Twelvers first came to office in 2012 and can serve a total of 12 years; fourteeners will start in 2014. Wieg explained these legislators do not need to change houses. It is likely once elected to the state Assembly or Senate, they will stay in that house and not run for the other, giving them a longer time to work together and push their issues. There will be 40 new people in the state Senate next year with perspectives different from the "old guard." The changing demographics could transform the "melting pot" into a "salad," which could get complicated for real estate.
There are major real estate-related issues looming on the horizon that REALTORS® need to watch closely, said Wieg. At the federal level, expect more push by Congress to reduce government's role in mortgage financing. It is happening now with H.R. 2767 - Protecting American Taxpayers and Homeowners Act (PATH Act). The PATH Act, which recently passed the House Financial Services Committee, would do away with government-sponsored enterprises Fannie Mae and Freddie Mac in five years and rely on private capital to replace their role in the secondary mortgage market. The bill would severely reduce the flow of capital to the mortgage market, likely leading to a sharp increase in the cost of mortgages, pricing many buyers out of the market. The bill would also limit Federal Housing Administration loans to first-time and lower income borrowers and increase the down payment requirement from 3.5 percent to 5 percent.
Expect more effort on the part of local governments to address climate change through point-of-sale mandates on energy and water conservation, and sewer lateral inspections. Wieg said the idea behind these moves is to make the seller comply with these environmental regulations before the time of sale, thus freeing local governments from paying for these actions themselves.
Attempts to impose all types of real estate-related taxes on the consumer, such as a parcel tax, split roll, private transfer tax, recording tax, service tax, will continue. These taxes, including moves at the federal level to limit the mortgage interest deduction, would certainly increase revenue for government, but would also increase transaction costs for the consumer, said Wieg.
Carolyn Miller, president of the Silicon Valley Association of REALTORS®, said it is good for REALTORS® to be aware of policies impacting real estate. "REALTORS® don't just sell homes. We care about the communities where we live and work," said Miller. "As advocates of homeownership and private property rights, REALTORS® regularly monitor developments at the local, state and federal government level and guard against policies that could harm the American dream of homeownership for everyone."
The Silicon Valley Association of REALTORS® (SILVAR) is a professional trade organization representing over 4,000 REALTORS® and Affiliate members engaged in the real estate business on the Peninsula and in the South Bay. SILVAR promotes the highest ethical standards of real estate practice, serves as an advocate for homeownership and homeowners, and represents the interests of property owners in Silicon Valley.
The term "REALTOR®" is a registered collective membership mark which identifies a real estate professional who is a member of the National Association of REALTORS® and who subscribes to its strict Code of Ethics.
Variations of this article have appeared in local area newspapers.
For further information, please email or call the SILVAR office at (408) 200-0100.