The National Association of Realtors is considering a hike in member dues by $40 a year in 2012 and 2013, with the goal of raising nearly $80 million in "soft money" for political advocacy at the local, state and federal level.
NAR’s board of directors is scheduled to vote on the "Realtor Party Political Survival Initiative" on May 14, at its annual midyear meeting in Washington, D.C.
If the initiative is approved, NAR says it will be spending nearly half of its budget on political advocacy, which the group’s members consistently rate as the most important benefit they receive from NAR, the group said in a "talking points" memo in support of the initiative.
The Political Survival Initiative — prompted in part by last year’s U.S. Supreme Court decision striking down restrictions on independent campaign expenditures by corporations — was unveiled at a meeting of Realtor association executives in Dallas this week.
Initial online reaction among some NAR members to what would amount to a 50 percent increase in national level dues, from $80 to $120 a year, was mixed.
The Supreme Court ruling on "soft money" restrictions has opened the floodgates for independent campaign expenditures, and NAR must up its spending in order to maintain its voice, association executives were told.
In its last annual report, NAR said it currently collects $80 in national dues, of which $23 is used for legislative regulatory advocacy, $15 for consumer and member relationship building, $15 for state and local association services and support, $10 for economic and technological research, $7 for code of ethics, legal policy, and enforcement; $5 for publications (Realtor Magazine and Realtor.org), and $5 for commercial and international alliance partnerships.
In a PowerPoint presentation on the Political Survival Initiative, NAR said it hoped to raise $38.8 million a year through the initiative — implying that membership is expected to slip to 970,000. NAR membership — which peaked at 1.37 million in October 2006, has declined to just over 1 million last month.
Of that money, $9.77 million would be earmarked for state and local issue campaigns, and $8.95 million for federal issue campaigns. Another $7.02 million a year would go to supporting state and local candidates, and $3.95 million to federal candidates. The dues increase would provide an extra $5.17 million a year for Realtor mobilization, and $4.32 million for unspecified "campaign services."
If NAR’s board approves the Realtor Party Political Survival initiative, the $40-a-year dues increase "will be re-examined for quantifiable results" in two years, the talking points memo said.
Some Twitter commentary about the initiative was categorized using the hashtag #rppsi.
Philadelphia-based Realtor Joe Sheehan said it "Won’t be the first time I don’t 100 percent agree with the PAC I contribute to. I am a Democrat and member of the NRA."
Kimberly Dotseth, broker-owner of San Diego, Calif.-based GreenBoxHomes.com, said in a Twitter post that the initiative "may actually turn quitting NAR into the cool thing to do. Especially if you don’t have to be a member to use MLS," a reference to markets in which brokers can access a multiple listing service without belonging to their local Realtor association.
NAR spokesman Lucien Salvant said, "There will be a lively debate over the next six weeks before (the vote at) midyear, and we expected that."
Rob Hahn, a marketing, strategy and technology consultant for real estate firms, characterized the proposed initiative in a blog post as "either be the most brilliant thing that NAR has done in decades … or the first step towards total irrelevance."
NAR risks alienating its members not only by raising dues when many are struggling, Hahn said, but by supporting candidates that its members may not like.
"NAR is quite likely going to start shedding members left and right," he wrote. Unlike NAR, "Human beings are rarely single-issue voters."
Hahn also questioned the wisdom of NAR’s decision to go public with the initiative less than two months before the board of directors is scheduled to vote on it.
"A change this monumental likely needed quite a bit more public debate and efforts to convince existing NAR membership that this was the way to go," Hahn wrote. Announcing the initiative "as a fait accompli is going to cause quite a bit of unhappiness among the membership."
NAR plans to conduct a webcast on the topic on Thursday, April 7, and the initiative will be discussed at the group’s midyear meeting before the board vote.
The decision not only changed the way elections are financed at the national level, but also overturned rulings in 23 states that only allowed "hard dollars" specifically allocated for political purposes to be used in political campaigns.
The ability to use corporate funds and member dues to fund independent expenditure campaigns in federal, state and local campaigns "is a game changer of gigantic proportions," NAR said. "It is as if the goal posts on a 100-yard football field were expanded to now cover 140 yards."
But more corporate dollars means spending by NAR’s Realtor Political Action Committee (RPAC) must also increase to keep pace, the group said.
At the same time, "the pressure is still on to raise hard dollars," NAR said, and "fair-share goals" for voluntary contributions to RPAC will remain in force.
Although NAR’s political advocacy at the federal level may capture the most headlines, the group says it intends to return two-thirds of the money it raises through the initiative to states in support of local candidates, issue campaigns, and other political advocacy needs.
NAR must groom "Realtor champions" at the state and local levels, before some move on and become elected leaders at the federal level, NAR said in its talking points.
"We are doing this not only because of the Citizens Supreme Court decision, but because our core competency is our grass-roots advocacy," the group said. "It’s where we need to be investing today so our future advocacy efforts will be successful tomorrow."
NAR said it has already contributed funds to the initiative out of its operating budget, noting that the independent expenditures it concentrated in 11 key Congressional races in the 2010 election netted eight victories.
According to the Center for Responsive Politics’ OpenSecrets.org, NAR made more than $6 million in independent expenditures on behalf of federal candidates in 2010 elections, with about 61 percent going to Democrats. In each case, NAR supported incumbents who have been allies in the past.
NAR placed its biggest bet on U.S. Rep. Paul Kanjorski, a Pennsylvania Democrat who was the second-most-senior Democrat serving on the House Financial Services Committee.
Although NAR spent more than any other group in the race — $1.2 million — Kanjorski was defeated by Republican Lou Barletta, who’d come close to defeating him in 2008.
Salvant said that looking back over the last 10 years, NAR has split its spending "pretty close to 50-50" between Republicans and Democrats.
NAR, he said, supports candidates who support the "Realtor party" platform, "not Democrats or Republicans or someone’s personal ideology."
In 2010, top advocacy issues for NAR included preserving the mortgage interest deduction and capital gains exclusions for homeowners; preserving Fannie Mae and Freddie Mac’s ability to provide liquidity to mortgage markets; maintaining homebuyers’ ability to obtain Federal Housing Administration-insured loans; and improving the short-sale process.
One area where NAR has been active at the state level is in advocating for state constitutional amendments prohibiting transfer taxes.
Last year, prohibitions on transfer taxes were approved by 83 percent of Missouri voters and 73 percent of Montana voters. Arizona voters passed their own amendment in 2008.
NAR last raised dues in 2008, after the group’s board of directors voted to fund a technology incubator, Second Century Ventures, among a series of other initiatives, with a $16 dues increase. Members also pay a $35-a-year special assessment for NAR’s "Home Ownership Matters" public awareness campaign.