Our Tiresome Walk on the Capital
I have been a Director for the Pacific West Association of Realtors (PWR) for 10 years (about 13,000 Realtor members) and a Director for the California Association of Realtors (CAR) for 10 years as well (over 200,000 members). As you may know, to manage properties for another person, you must be a licensed agent. I have been a Broker since 1997, and prior to owning a property management company, I was a very active agent, selling over 70 homes a year at one point. I decided to serve on these boards to better understand our industry and protect the private property rights of our clients.
as part of serving as a Director for CAR, we journey to Sacramento to lobby our elected officials. Sometimes we lobby for bills that will help owners and buyers. Other times we fight bills that may hurt private property rights. For the past 10 years, Assembly members, Senators and even Governors took great notice of our visit and trembled at our demands. Why? We are a very large organization with a wide reach. Realtors network to generate business, if the average Realtor can impact 150 voters, that is practically every qualified voter in the state. Also, CAR has a lot of money and spends it aggressively to defend housing rights and its business. Each Realtors pays about $1,000 a year to practice real estate. About $30,000,000 a year of that goes to CAR for lobbying. CAR supports candidates that agree with its issues, and fights those that do not.
The major issues for CAR over the past 10 years has been:
- Limiting rent control
- Rejecting just cause eviction
- Stopping point of sale mandates (e.g., requiring every homeowner to install low flow toilets)
- Providing incentives to home ownership (e.g., allowing a 55+ homeowner to sell, move up or down, and keep their property tax basis)
- Encouraging the construction of additional housing.
In the past,
just a visit to an elected official and an explanation of our position, or threat to spend money against a bill would be sufficient to get our way. We did not compromise, we did not negotiate, and it was our way or the threat of removing a person from office if they insisted on doing their way. Those days are past.
For the first time in the history of CAR, we are not killing bills that are a detriment to investment property ownership, we are actively compromising. We are not opposing rent control or rent caps, we are working to make the final law less onerous. We are not averse to changes in Costa-Hawkins (the law that only allows rent control to be imposed on 2 or more units that were built before 1994) we only hope to limit the expansion to older than 20 years. This is the new reality in Sacramento: renters have real power and elected officials are crafting laws to appease them. We don’t call the shots any more. We analyze what shots are being taken and limit the negative impact to owners.
This is the first year in this trend.
We have every reason to believe that going forward, as we become a renter state, more laws will be introduced to protect renter rights at the cost of owner rights. We pick our battles, and play nicely in the sandbox with policies we don’t agree with. But this is an uphill fight. It may take years for sufficient new housing to be built to take the pressure off ever increasing rents. And until this occurs, if ever, the trend will be to make tenants a protected class. One thing is for sure: the government won’t pay for that housing or endure the cost of a bad tenant who can’t be removed from a rental property because of legal protection: private property owners will.