This was the name of a Billy Joel song but it also could be the theme for RPAC in fighting what is going on in Washington, D.C. I understand that the latest recession and bubble burst centered on real estate, but real estate professionals didn’t start this. Real estate was used as a manipulated asset class to boost banking and Wall Street profits, not unlike the energy bust of 1982 or the dotcom bust before. Did we participate? Of course we did. Did the media, Wall Street, the banks and even Alan Greenspan of the Fed constantly reassure us and tell us to keep going? Yes they did. But now, five years later, it is to a great measure because of us that we have a recovery in progress that wasn’t expected until after 2015, and this leads us to D.C. and RPAC.
Last week, a small group of Oklahoma RPAC major investors contributed more than $37,000 to the fund for 2013, and a few people who couldn’t make it but will give would have put the total well over $40,000. But that is not enough. Seventy percent of your contribution stays in Oklahoma, but that 30 percent could not be more important. Let me give you the current Washington agenda.
The Mortgage Interest Deduction: Last May our Oklahoma elected officials told us in D.C. that the mortgage interest deduction should go in a grand bargain. Despite the fact that this deduction, which is almost 100 years old, would only save $90 billion dollars a year is being used as a pawn, and the danger exists that it will happen. The chief economist for Stewart Title in a talk with the Edmond Board of REALTORS® estimated home prices would drop 15 percent if this happened. Think about what that would do to your current listings. Think what that will do to the economy that in modern times has always been led back to prosperity by the housing industry. Think about what that would do to ordinary Americans whose main wealth is in their home.
Twenty percent down payment requirements: How many of your buyers can put down 20 percent to get a mortgage? How many 25-year-olds wanting a piece of the American Dream and are paying off student loans can get a house if FHA can’t do 3.5 percent-down mortgages? A sizable group on both sides of the aisle believes requiring 20 percent down would solve a future housing crisis, and yes it probably would since I don’t know what would be left of it.
As was said at the Rally in May at the Washington Monument, the American Dream is not to be able to rent a home. Maybe they should look at a telling statistic: one of the lowest default rates currently are VA loans with no down payment. There is no correlation between down payment and the default rate.
Dodd-Frank: I think we can all agree regulation that prevents excess and fraud is a good thing, but too often these 2,000 bills can have unintended consequences, one of which is the effect on community banks. We are in a housing shortage and new construction is vital to meet supply and demand as well as getting back to good employment numbers that new housing construction creates. Community banks are hamstrung on being able to loan the money necessary to meet demand, and this needs to change.
Capital Gains: Another “entitlement” on the table is the reduction or elimination of the $250,000 exemption for singles and $500,000 for married couples filing jointly when a home is sold and have been there two years out of five. Again, many retirees have one source of wealth: their home. And they need that in order to supplement Social Security and Medicare. Maybe they are looking for a smaller home that is reasonable and they bank the rest, but again we are not talking where lots of money can really be raised to pay off the debt.
Will you invest in your business? These are a few of the national fights that NAR is working on to protect our home owners and our industry, and we are currently monitoring 103 bills at the state level that affect real estate. I hope you are serious about your career path and you are fully engaged, making things better and protecting the American Dream for all of us. But if you just let others do the heavy lifting and give nothing, where will you be if any of this happens? I am not writing this to tell you that early in my real estate career I always gave to RPAC, but I promise you I am making up for lost time—as are others. We need your contribution this year as much as any time in our history. And if $15 is all you can do, then thank you. If your business is thriving, it is in some measure to the fact that NAR is one of the most effective lobbyists in Washington, and I believe that OAR has done a great job here in Oklahoma.
Just this year we passed the new Broker Relationships Act, prevented county assessors from putting an intangible property tax on your business at their discretion, and we elected representatives on both sides of the aisle we consider members of the REALTOR® Party looking out for the benefit of Oklahoma property owners. Again, RPAC is an investment in your business and who knows, the business you save might be your own.
One More Thing: It is not just money we need; we need you to respond when you get an email Call to Action. We are only getting a 15% response rate and we can do better. When elected officials tally up the yeses and nos on an issue, it is vital that our voice is heard.