Real Estate Articles
California REALTORS® Bring Issues to State Capitol
SILVAR Board Director John Tripp introduces Assemblymember Jim Beall to SILVAR and SCCAOR members.
On May 4, members of the Silicon Valley Association of REALTORS® joined thousands of California REALTORS® in Sacramento for Legislative Day. REALTORS® make up one of the largest groups that meet with legislators every year and discuss important issues concerning their industry.
A number of ideas to fix the state's budget gap have been floating around that would be harmful to real estate, according to the REALTORS®. They urged legislators to oppose the following ideas and explained why:
- Forced overwitholding on independent contractors. There is no evidence that independent contractors are failing to pay their income tax obligations. This change would merely create significant administrative burdens for individuals and administrative costs to the Franchise Tax Board, since it would have to make refunds to those independent contractors whose withholding amount remitted to the state exceeds their income tax obligation.
- Tax on services. Over the years, several pieces of legislation have been proposed to impose a sales tax on special services that are currently exempt from taxation. A tax on real estate related services will increase the cost of housing because all services involved in purchasing a home will be taxed (e.g., appraisal, home inspection, structural pest control inspection, escrow services, loan fees, etc.).
- Changes to the mortgage interest deduction (MID). Legislative interest has increased at both levels of government in scaling back the cost of the MID. Both state and federal law limit the deduction to the interest paid on a maximum $1 million of mortgage debt (first and second homes), plus $100,000 in home equity debt. The MID encourages home ownership, which promotes community stability, savings and long-term investment.
- REALTORS® also requested a "No" vote on SB 184 (Leno) – Rent Control. SB 184 will weaken the landmark Costa-Hawkins law limiting rent control, by allowing local jurisdictions to control rents on newly constructed rental housing. This bill will discourage the creation of new rental housing, which is badly needed.
Silicon Valley REALTORS® met with State Senator Joe Simitian (D-Palo Alto) and Assembly Members Paul Fong (D-Cupertino), Jim Beall, Jr. (D-San Jose), Rich Gordon (D-Menlo Park), the staff of State Senator Elaine Alquist (D-Santa Clara) and State Senator Blakeslee. The legislators listened intently to their concerns and pledged their support for most issues raised, but it was obvious fixing the budget weighed on their minds and negotiations had taken a toll on them.
"This is a very difficult environment to work in," said Beall, who represents the 24th Assembly District which includes Saratoga. "The state lacks infrastructure planning and needs an international trade policy to stimulate jobs. It doesn't look at outcomes enough compared to local governments."
Beall invited the REALTORS® to keep in touch and attend his neighborhood coffees. "Please keep me connected. I want to make sure I stay grounded with everything," said Beall.
Like the other legislators, Gordon, who represents the 21st State Assembly District, which includes Los Gatos, professed his strong support for the mortgage interest deduction. "The strength of democracy is in maintaining a strong middle class. One of the ways we have sustained and maintained a strong middle class is through the deduction. Democracy is also dependent on a strong sense of community. Home ownership is one of the critical factors in the creation and maintenance of community," said Gordon.
Gordon also underlined the importance of the real estate industry. "Your industry is so important to California not only because of the economy, but because you help build the communities that create the kind of California we all want ... So the mortgage interest deduction is a critical element in creating the kind of place that we all want," said Gordon.
Photo Gallery
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.