Editor’s note: Since the Homestead Act more than 150 years ago, politics, policy and real estate have gone hand in hand. Today, politics and policy are even more central to a vibrant and functioning real estate market. In this special four-part series of stories during an election year, Inman News looks at the relationship between politics and real estate. (See Part 1: Democrats, Libertarians make inroads in housing; Part 3: Realtors have money, masses; and Part 4: People, money, issues drive housing’s political agenda.)

Environmental and growth policy issues are top priority for Valerie Hietala, a Realtor with RE/MAX on Anna Marie Island off the coast of Florida. Hietala taught environmental sciences before she started selling real estate.

She admitted her career is often at odds with her belief that there should be more caps on development and more green space established in her market.

“As an environmentalist, I feel very strongly about growth policy, but it doesn’t always go hand in hand (with real estate sales),” she said.

Growth policy is just one of the many political issues intertwined with the real estate industry. The list is so vast that the National Association of Realtors’ Political Action Committee has grown to become one of the most powerful on Capitol Hill. A lot of real estate-connected public policy issues involve housing and development, but many more today have to do with business matters. Which issues are most important depends on one’s point of view.

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RE/MAX International CEO Daryl Jesperson considers affordable housing and litigation reform to be the two central policy issues for the real estate industry. One is a housing issue while the other is a business issue, but the two are intertwined, in his view.

“A lot of good work can be done in those areas…It all gets talked about, but not too much happens,” he said.

The cost of housing is being raised in part by higher homeowner’s insurance rates, which are being driven up by costly litigation, he said. He pointed to the black mold scare of recent years as an example.

“A study out now concludes mold isn’t this bad creature out there, yet millions of dollars have been awarded to people and it ends up being paid for by the consumer. It ends up in higher insurance rates,” he said.

Affordable housing appears on NAR’s federal policy priorities list for 2004 in the form of the Homeownership Tax Credit, which would provide 50,000 new units of single-family housing each year. Other policy measures on the Realtor group’s radar screen include the Real Estate Settlement Procedures Act, keeping banks out of real estate, conforming loan limits on Freddie Mac and Fannie Mae-backed loans, multiyear reauthorization of the National Flood Insurance Program and association health plans.

Steven Glisan, a Realtor with RE/MAX Properties in Colorado Springs, Colo., thinks NAR does a good job with public policy, but he said the association should focus more on anti-growth groups that use endangered species tactics to prevent development.

“The anti-growth groups are bombarding elections with complicated ballot issues and heavy advertising to confuse voters,” he said. “People believe you can have a no-growth, healthy economy. They do not realize if you have no growth, you have no new jobs and property prices go down.”

Meanwhile, simplifying the mortgage closing process is among the high-priority public policy issues for First American Corp., a real estate title insurance and services company. Jim Dufficy, the company’s VP and regulatory counsel, said RESPA reform is a very important topic.

“This business has to be changed and simplified, and the law has to adapt to that and encourage it,” Dufficy said.

Harley Rouda Jr., CEO and managing partner of Real Living, said he would add an item to NAR’s public policy priorities: to raise the qualifications needed to become a licensed Realtor. He believes that change would drive professional productivity of agents and the industry overall.

“Any top agent wants to see the bar raised for people they work with in the industry,” he said.

Other public policy issues the real estate industry faces involve technology, data and copyright protection and consumer privacy.

Legislation that would protect databases and collections of facts is one public policy issue that would affect real estate, according to Brian Larson, a Minneapolis-based attorney with MLS and Realtor association clients throughout the United States. He said a proposed bill would provide more stringent protections than current copyright laws.

That legislation might not be as important to Realtors as housing issues, but it’s a “critical issue” for MLSs, he said.

Other public policy issues concern homeowners and low-income renters. The American Homeowners Grassroots Alliance is a non-profit organization that was formed to give homeowners a louder voice in politics. Homeowner and renter groups sometimes support the same political issues, but their priorities at other times differ. The homeowners group has been trying to persuade Congress to lift a 27 percent tariff on Canadian softwood lumber used in constructing new homes. That tariff increased the cost of a new home by $1,000 to $2,000, depending on its size, according to AHGA Chairman Bruce Hahn. The National Association of Home Builders has also been active on that issue, but lender and Realtor groups haven’t shown interest in it.

“In many cases we are on the same side (as industry groups),” Hahn said.

AHGA also is concerned with repealing state laws that allow dual agency in real estate brokerage, establishing a tax deduction for mortgage insurance premiums and tax credits for energy-efficient home appliances and technologies.

***

Send tips or a Letter to the Editor to jessica@inman.com or call (510) 658-9252, ext. 133.

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