Government Affairs

Paul Herrera
Government Affairs Director

TIGAR Discusses Homeownership, Dual Agency and Tax Issues in Sacramento

On Wednesday, May 3rd, nearly two dozen TIGAR members joined approximately 2,400 colleagues from around California to visit lawmakers in Sacramento. The annual Legislative Day, organized by the California Association of REALTORS®, broke attendance and participation records, again.

In meetings at the state Capitol, TIGAR members discussed opposition to AB 1059, a bill that seeks to eliminate dual agency in commercial transactions. REALTORS® argued that this bill, authored by Assembly Member Lorena Gonzalez Fletcher from the San Diego/Chula Vista region, would undo efforts to expand disclosure requirements and allow for consumer choice to drive the relationship between brokers and clients.

In practical terms, eliminating dual agency would essentially disallow brokers representing end users of commercial properties from reviewing options listed by their own brokerages. It would also cause businesses interested in a property they see advertised from contacting the company’s representative and working directly with that broker.

AB 1059 was recently shelved for 2017, but remains a possible issue before the end of the current legislative session in 2018.

REALTORS® also re-emphasized their opposition to SB 640, a bill that would lay the groundwork to impose sales taxes on services. If implemented, a sales tax on services would impact thousands of service-based industries and their customers. In real estate, where virtually everything is a service, a sales tax set at 5 percent would add more than $3,200 to the transaction cost of the median priced California home. If the tax were set at 7.5 percent, which is the current rate of sales taxes on goods, home buyers would see a new tax bill of nearly $5,000 on the median-priced California home.

The new taxes would push an estimated 37,000 to 55,000 Californians out of the housing market, with that impact focused directly on working class residents already struggling with affordability.

Speaking of housing affordability, the third issue on REALTORS® Sacramento agenda last week was also one of the more comprehensive and complex in recent history. REALTORS® are taking an active role to find solutions to the housing affordability crisis that has become a central topic in our state.

The REALTOR® message on housing affordability in California is: The Solution is Supply.

There are a series of bills designed to reduce barriers to home building and push local governments to allow housing to keep up with their growing populations. The failure to do this over the last generation has pushed homeownership out of reach of millions of Californians. The housing supply and affordability problem actually goes beyond homeownership. Lack of building has pushed rents beyond the means of many working Californians as well. There simply is not enough housing of all types to accommodate a growing state.

While efforts to remove obstacles to make housing more available to working Californians have languished, other proposals have come forward to push government controls on rents as a quasi-attempt to address housing affordability. In reality, such measures may help the few lucky individuals who receive the rent control-based subsidies, but further exacerbates the housing crisis by driving out investment in new construction.

REALTORS® asked lawmakers to reject those false solutions and embrace the idea that allowing construction of new homes to match population growth is the only sustainable approach to address affordability.

Support our Mission, Support the REALTOR Party

The most important thing each member can do to support our government affairs work is to stay informed and help spread the word on important issues to your colleagues, clients, friends and neighbors. Nothing is more important than your time, including the time you devote to making your voice heard at the ballot box each election day.

However, our work is also backed by the generous support of members who understand the importance of our advocacy mission.

In 2017, we hope that all TIGAR members will consider making a voluntary contribution of $49 or more with their membership renewal to support the REALTOR® Party and our efforts to protect and promote the American Dream of Homeownership.

You can make a contribution as you renew your membership – or anytime by going to www.car.org/governmentaffairs/raf.

Questions? Comments? You can reach Paul Herrera, Government Affairs Director, at paul@tigar.org or on his cell phone at 951-500-1222.