The National Association of Realtors (NAR) on Wednesday laid out its legislative policies for 2018, at the trade organization’s annual midyear conference in Washington, D.C.
A looming deadline for the aging National Flood Insurance Program, new Federal Housing Administration loans, net neutrality and lingering changes to the “Tax Cuts and Jobs Act” were chief among the organization’s priorities during the opening-day legislative briefing, which drew hundreds of members to the Marriott Wardman Park hotel in Washington.
“These issues that we’re talking about today are at the center of the radar screen for us,” said Jerry Giovaniello, NAR’s chief lobbyist.
Changes to federal flood insurance program
The National Flood Insurance Program (NFIP) is set to expire on July 31, 2018, and NAR is calling on its members to help push their legislators to reauthorize the program, as well as make some additional changes. NAR estimates that 40,000 home sales are at stake if the program lapses.
“We can’t just kick the can down the road, we need meaningful reform,” Austin Perez a senior policy representative said at the conference. “We need to fix the flood maps, we need to give people options to mitigate their homes. We need to do something about the rates that just keep going up and up and up.”
Congress needs to remove regulatory barriers that will allow homeowners to more easily access private market flood insurance to get better rates than they would from NFIP, Perez said. There should be no penalties or rate hikes for going back-and-forth from NFIP to private market options, he added.
“There is a small but thriving private market that is offering better options than the NFIP,” Perez said. “The NFIPs rate tables were created 30-40 years ago and it’s going to take some time for them to update their insurance rating methods.”
“We need to make sure there is a level playing field between the NFIP and the private market,” Perez added. “It doesn’t really matter as long as you’re getting good coverage whether it’s the private market or federal coverage. We want the best options at the lowest cost.”
FHA loans for condo buyers
In August 2016, Congress passed legislation that required the Department of Housing and Urban Development (HUD) to make changes to its requirements to Federal Housing Administration (FHA) approval for condominiums to make them eligible for loans through the agency.
“Only 10 percent of condos nationwide are FHA-approved,” said Megan Booth, the director of federal housing, valuation, commercial real estate policy and programs for NAR.
“Which is crazy when you think about first-time homebuyers or people who are downsizing,” she added. “A condo is often the perfect option for them, yet they can’t get FHA financing, which is supposed to be largely for first-time homebuyers.”
Despite HUD putting out new rules in September 2016, there’s been little movement on the changes Congress and NAR had requested, due to the change in administration.
“HUD has argued that they can’t make any changes without an FHA commissioner,” Booth said. “Bryan Montgomery is the nominee for FHA commissioner — he was FHA commissioner under George W. Bush — and we worked very well with him, had a very strong relationship, so we are fully supporting his nomination. He’s been waiting a Senate confirmation vote for almost a year.”
NAR is still urging HUD to go forward with the changes, despite the lack of a commissioner.
Tax reform — again
Yes, a lengthy battle over tax reform just took place in Congress, with a plan ultimately being finalized and passed in December. But NAR is still advocating for some changes and for some oversights to be addressed.
A particular sticking point for NAR is the state and local tax deduction, which is capped at $10,000. There are two big problems: It’s not adjusted for inflation, and it penalizes married couples, said Evan Lilliard, a senior tax policy representative for NAR.
“Home values are going to go up, but the $10,000 is going to stay the same,” Lilliard said.
As single individuals, a couple can both deduct up to $10,000, but as they get married, that number stays the same, and they can take the $10,000 as a married couple filing jointly. NAR wants Congress to double the state and local deduction for couples filing together.
“That creates a terrible marriage penalty,” Lilliard said. “It creates a perverse incentive to divorce.”
Taking a stand on net neutrality
NAR was a staunch advocate for net neutrality, which had regulated the way internet service providers (ISPs) treated content. It required ISPs to treat all content equally and blocked the ability to provide “fast lanes” for favored sites.
Now, in the wake of the Federal Communications Commission’s (FCC) decision to roll back the Obama-era policy, NAR is continuing that advocacy, asking its members to urge their federal representatives to create and support legislation that would reimpose net neutrality and take its enforcement out of the hands of the FCC.
“We don’t want to allow the people that provide you internet service to disrupt the content that you deliver,” said Melanie Wyne, a senior policy representative with NAR.
“What we would like is for Congress to pass legislation that enacts these rules into law so that they can’t flip-flop back and forth every time there’s a change in administration to create certainty so you, as small business owners, all will have certainty and know what the rules will be.”