Politics and the housing market

Spurred in part by Jonathan Miller’s post today, this comment on a story I wrote at the Bloodhound, and a premonition that next year is going to bring a 15-25% reduction in the number of Realtors locally, one wonders – will the Realtor lobby be as powerful in next year’s elections? In 2009? Where will the balance shift?

“Like it or not, the NAR has leverage, they have infrastructure, and they have what it takes – our money – to get things accomplished politically.”

This is NAR’s core competency. It is first and foremost a lobbying organization that has carried the torch for the American homeowner. It has done that job extremely well.

Realtor organizations have won some significant victories for homeowners in recent years.

From the Virginia Public Access Project’s homepage:

VIRGINIA puts no limits on campaign contributions.
Anything goes, as long as candidates disclose their donors.

Statewide, the Real estate/construction industries gave nearly $6.5 million to candidates, and gave just over one million dollars to local candidates. Locally, in Albemarle County, Realtors and other development interests gave a phenomenal amount of money to candidates.

What happens if next year Realtors have much less money to dole out? If the National Association of Realtors’ membership drops from 1.4 million members to 1 million members, there will likely be little change. On the local level, however, if we see a reduction in ranks from ~1,300 to less than 1,000, there will clearly be less PAC money to be distributed.  We have just seen a major shift in the local political landscape – what’s next? Higher taxes?

“I think the taxpayers are fed up with the Republicans anti-tax nonsense,” Slutzky said. “It’s the Republicans nationally and in Richmond who caused this mess.” Slutzky is advocating raising taxes to deal with the county’s infrastructure gap, particularly in road improvements.

In politics, the battle is about money as much as ideology. In this battle, it will be important to see which industries will benefit from the real estate market shift and how they will apply their enhanced positions. When I got involved in politics a few years ago, I was struck by the distaste I felt when I realized that generally, in order to get a politician to answer your questions/phone calls, one had to give money. As stated by a fellow Realtor at the time, “it’s a dirty business, but if they’re doing it, we have to be doing it.”

Politics should be non-partisan, and locally the Realtors have a pretty good track record of being focused on issues rather than parties. No longer does “he who dies with the most toys win,” it’s “whomever donates the most” wins.

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2 Comments

  1. Bob in San Diego November 15, 2007 at 15:11

    >”one wonders – will the Realtor lobby be as powerful in next year’s elections? In 2009? Where will the balance shift?”

    The answer to the first question lies with the answer to the 3rd question. Power is measured in relation to the power of others. If I were to hazard a guess, my answer would be the banking industry.

    You already have the largest shareholder of Wells Fargo, Warren Buffet, testifying this week on Capital Hill about the estate tax.

  2. Duane Gran November 15, 2007 at 17:56

    The underlying question is whether lobbying the public sector can remedy a private sector housing slump. I don’t mean to be insensitive at all to Realtor’s who will face a hard few years, but no industry is recession-proof. Any legislative solution should be regarded with skepticism since it will largely delay, rather than eliminate, a market correction.