…The Light at the End of a Very Long Tunnel

CoreLogic® has just published their most recent Home Price Index showing a 3.8% rise in home prices for July marking the 5th consecutive month of year-over-year increases. They are forecasting an increase of 4.6% in August and are now anticipating that we will see a gain for the full year.

In this month’s Realtor® Report, you’ll find that housing  activity in Southwest California is running slightly ahead of these national numbers with year-over-year increases of 6% in both July and August putting us ahead of 2011 median price by 5% year to date. Temecula posted its 6th consecutive monthly median over $300,000 and its highest month since April 2008  ($347,985).

Sales were down somewhat in August, at least in part due to our increasingly severe inventory shortage. Demand activity remains strong and if we had more homes to sell, they would be selling. Year-to-date sales are 9% ahead of 2011 (4,963/5,454) and still running 4% ahead of 2010 (5,228/5,454) keeping us on pace to set a new high water mark for the region, but our inventory is down 62% since January.

Back in June, I updated you on a bill H.R. 5823. Authored by California Congressman Gary Miller, the “Saving Taxpayers from Unnecessary GSE Bulk Sales Act of 2012” follows months of direct lobbying to the FHFA and others to carve California out of their proposed pilot program to remove hundreds of homes from our inventory and convert them to rentals for 5 years in an ‘effort to stabilize the market’.

The bill is still languishing in committee. Meanwhile the FHFA has announced its intention to proceed with the program and remove 500 for-sale homes in LA and Riverside County to fire-sale to an investor as rentals by year-end. Even if we knew how they were selecting these homes, where they were located and who they were going to sell them to, this would still be a bad program. The fact that we don’t know any of those things only makes it worse.

I would like to thank the Riverside County Board of Supervisors, the Southwest California Legislative Council and the Cities of Temecula and Murrieta (so far) for joining Realtors® in SUPPORTING H.R. 5823 and opposing this FHFA program. Simply stated, the goal of this program is to stabilize the market by removing  ‘excess inventory’. But our region has no excess inventory, there is strong demand for the properties we have and our prices have been stable for 3+ years and have recently started to appreciate. This program would make it even more difficult for qualified buyers to find a home in our communities while exposing our neighborhoods to numerous rentals owned by an absentee landlord (hedge fund) just waiting out their 5 years to dump them back onto the market.

To get all the numbers behind the local real estate market as well as more information on how you can join the coalition supporting HR 5823, visit: http://www.slideshare.net/genewunderlich/9-realtor-report


2010 Recap Realtor Report

If you click on that little red Realtor Report just above the chart, you’ll get to a slightly larger version of the report which will be easier for your old eyes to read. You’re welcome.

SRC Realtor & Affiliate Holiday Food Drive

Once again our thanks go out to our Affiliate group for organizing what has become one of the Valleys most successful holiday food drives. Thanks also to our Realtors who participate, who volunteer to collect the donations and deliver it to needy centers.

Special thanks to the hundreds of students in Valley grade, middle & high schools for bringing in non-perishable donations of food, toys & clothing to help their more needy neighbors. The need has exploded this year while donations have dropped – but even with that SRCAR collected nearly 11,000 food items so far this year with more to come.

Long overdue – Stonewood scam goes to trial

At long last the trial has begun for the perpetrators of the so-called Stonewood Scam in Southwest Riverside County. Long time readers are acquainted with the basics of this story from my years-long chronicle of events. Our local association tried to bring this to the attention of law enforcement beginning in late 2004 but were unsuccessful in catching anybody’s ear until the scam had nearly run its course and started to collapse under its own weight.

The real estate part of it consisted of representatives from Stonewood Financial buying homes at significant premiums over asking price. As this was at a time our housing market was appreciating 20% – 30% a year, the fact that someone would pay a 25% or 30% premium on a home purchase was not enough to warrant investigation by the authorities. Homes listed at $500,000 were routinely selling for $600,000 or more. Targeting specific neighborhoods, after the first two or three sales were obtained with fraudulent appraisals, it became a self-feeding scheme since subsequent appraisals were now based on actual sales, albeit fraudulent. Turns out many of the buyers were either made of straw, or people talked into buying multiple properties they couldn’t begin to afford. Naturally other buyers into those neighborhoods also became victims since selling prices became predicated on fraudulently inflated values. In addition to the 200+ documented cases, many more innocent victims lost their homes when prices tumbled by more than 2/3 in some cases.

How did they do it? Well, partially through affinity fraud – many of the buyers were either members of the same ethnicity as the perpetrators or were nurses at the same facility where one of the perpetrators worked. They were also promised that the properties could be rented, that any shortage between the rental income and the mortgage payment would be paid for them, and that the $100,000+ overage collected by Stonewood or a related entity, would be paid to an investment account with the promise of even greater dividends to come.

Naturally there was no investment account to produce income, after a month or two the promised rental offset payments dried up and houses started going into foreclosure by tens, then by hundreds. When we became aware that something smelled bad here, we documented about 60 homes and about $40 million dollars in potential scams. By the time authorities finally acted on it the result was over 200 homes with the perpetrators indicated for over $120 million dollars. Our local District Attorney did not see fit to take action until the SEC, FBI and US Attorneys Office had finally acted, then he stood up on the podium all puffed up taking the credit. I like to hope in some small way it was part of the reason he was soundly defeated in his recent re-election campaign by a relative unknown.

Anyway, in addition to our local real estate fraud task force, reporters Chris Bagley from the Californian and Leslie Berkman from the Press Enterprise payed significant roles in shining the spotlight on these nefarious activities and our own attorney John Giardinelli and an attorney for some of the plaintiffs Richard Ackerman were pivotal in keeping the focus on.

It took too damn long and cost too many people – not to mention the damage done to entire neighborhoods and our cities – but as they say – sometimes the wheels of justice grind slowly. Let’s hope in this case they also grind exceedingly fine.

You can read the whole story and related elements here.

Press Enterprise – Fraud Trail Begins

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The opinions in this commentary are strictly Gene Wunderlich’s personal opinions. While any reasonable and/or rational indivdual should agree wholeheartedly, the opinons reflected herein may not necessarily be those of the Southwest Riverside County AOR,  or any local or state government or other mental institution.

SRCAR Publishes 11/2/10 Voter Guide

Make an Informed Choice at the Ballot Box. Your Association has chosen to support the following candidates for election on November 2 based on their past record and/or statements of support for Realtor®/ & property rights issues.

Your Vote Is Important!

Local, State and Federal Candidates
Candidate Office
City of Temecula

  • Maryann Edwards
  • Jeff Commerchero
  • Ron Roberts
City Council
City of Murrieta

  • Rick Gibbs
  • Kelly Bennett
  • Alan Long
City Council
City of Wildomar

  • Marsha Swanson, REALTOR®

  • Ben Benoit

City Council
City of Lake Elsinore

  • Thomas Buckley
  • Steve Manos, REALTOR®
City Council
City of Menifee

  • John Denver, REALTOR®
  • Scott Mann

City Council
  • Kim Cousins
Lake Elsinore Unified School District

  • Kevin Jeffries
66th State Assembly District
  • Brian Nestande
64th State Assembly District
  • Joel Anderson

36th State Senate District
  • Mary Bono Mack
  • Darrell Issa
45th Congressional District

49th Congressional District

CAR has chosen to take either neutral or not real estate related positions on statewide ballot propositions. The Southwest California Legislative Council, your local business advocacy partner, has also reviewed the ballot measures and makes the following recommendations:
State and Local Ballot Measures
Proposition SCLC  Position Recommendation
Proposition 19
  • NO
Regulation/Control of Cannabis
Proposition 20
  • YES
Congressional Districts by citizens
Proposition 21
  • NO
Vehicle license tax for parks
Proposition 22
  • YES
Public Safety & Transportation
Proposition 23
  • YES
Temporarily suspend air pollution laws
Proposition 24
  • NO
Repeal business tax breaks
Proposition 25
  • NO
Budget Voting Requirements
Proposition 26
  • YES
Voting Requirements for Tax Issues
Proposition 27
  • NO
Eliminate citizens redistricting commission

SRCAR is your association. Visit us online at SRCAR.org!

You are receiving this email because you are a valued member of the Southwest Riverside County Association of REALTORS®.
This message is sent from an unattended mailbox. Please do not reply.

CalREDD/MRMLS to merge into new statewide mls.

Dear C.A.R. Member,

Big news to report from our board of directors’ meeting in Sacramento: On Saturday, June 12, the C.A.R. board of directors voted to approve a new structure for the statewide MLS that will merge the efforts of calREDD® with the Multi-Regional Multiple Listing Service Inc. (MRMLS).

This joint effort supports and is in line with the principles that have guided our efforts throughout the process of building a statewide MLS. The new structure will create one dynamic MLS provider serving more than 33,000 real estate professionals and 22 REALTOR® associations statewide.

It’s a huge stride forward for our members — combining our respective strengths and resources will significantly accelerate our shared vision and position the new entity to deliver even more expanded and efficient MLS services to you. You’ll have expanded access to MLS information, greater exposure for your listings, and eventually will be able to select either the calREDD® software system or the Tarasoft Matrix platform currently in use by MRMLS. You should expect to see even more choices and increased services over time.

Your Association will remain both a member and a fundamental part of the new entity, and will continue to have the right to approve actions such as merger, dissolution or sale of assets, changes in the purpose of the new entity, and changes in the board composition.

calREDD® and MRMLS will work closely during the transition to the new entity to ensure there are no disruptions in service, the needs of members continue to be met, and associations scheduled to join calREDD® are seamlessly added to the system. The Amador Association of REALTORS® is on schedule for a June 21 launch, followed by the Tehama Association of REALTORS® on June 28.

I’d like to thank our board, and the members of the calREDD® board of directors and its chairman, Mike Silvas, for their hard work and dedication to ensure that our members’ interests were front and center throughout the process. We’ll provide more information as our joint effort progresses.

Also at the Sacramento business meetings, your board of directors adopted a special purpose political assessment of $49 per member for 2011. This special assessment is for the California Real Estate Political Action Committee or, if the C.A.R. member chooses, to direct the funds to the C.A.R. general fund for non-candidate political purposes.

I can’t stress enough how valuable political involvement is. Whether it’s the legislature looking to tap REALTORS®, the transaction, or our industry for additional sources of funding, or placing restrictions on private property rights or on our right to conduct business, we must be continually vigilant in Sacramento to ensure that our interests are fairly represented. This is even truer in today’s fiscal environment, with politicians searching for every available means to cut the state’s ballooning deficits and produce a balanced budget.

Over the past few years, our coffers have dwindled, and while we still have a strong presence and a team of dedicated individuals working on our behalf at the capital, so has our influence. That’s why I contribute to C.A.R.’s political action funds, why I believe each member of the Association should support our efforts in this area, and why I wholeheartedly support your board of directors in their decision.

The special assessment takes effect for the 2011 dues bill cycle. Details on process and implementation now are being worked out; we’ll let you know additional information as it becomes available. I know I can count on you for your support.

Looking ahead, if you haven’t registered for CALIFORNIA REALTOR® EXPO 2010, taking place Oct. 5-7 at the Anaheim Convention Center, early-bird pricing has been extended through June 25, so take a few minutes to sign up today to take advantage of the savings. This year’s EXPO will feature exhibit booths, cutting-edge seminars, and other special events, while Tech Tuesday on Oct. 5 will offer a full day of technology training preceding CALIFORNIA REALTOR® EXPO. You can register online by visiting http://expo.car.org or calling toll-free (800) 242-2732.

C.A.R. also has negotiated a 25-percent discount off the registration fee for members to Inman Connect in San Francisco July 13-15; use promo code “CAR.” http://www.inman.com/conferences/real-estate-connect-san-francisco-2010/register. While you’re at Connect, don’t miss the Association’s four agent-focused sessions during Agent Reboot on July 12.  C.A.R.’s Agent Reboot sessions assist agents with “rebooting” their business and are scheduled from 1 p.m. to 5 p.m. For a full list of program sessions, please visit http://www.agentreboot.com/.


Steve Goddard

2010 President


EVERY Realtor becomes an advocacy investor.

I’ve been at our mid-year CAR meetings in Sacramento this week so will have lots to post in the coming days. But I did want to share some phenomenal news with you that at this afternoons Board of Directors session we passed the motion which will have EVERY Realtor becoming an investor in our advocacy effort. The past few years that burden has increasingly been borne by about 20% of us while CAR’s lobbying stature has fallen from top 5 in the state to #33. This at a time when there are almost daily efforts to expand taxes on Realtors and homeowners, reduce mortgage interest deductions, encroach on the private property rights of our clients and worse.

Effective in 2011 the $49 basic cost of staying alive will now be shared by ALL Realtors in the state of California. If you are philosophically or religiously opposed to making political contributions, your investment will be channeled into a general CAR fund used for issues campaigns rather than direct candidate or party expenditures but if you’re a Realtor in California there’s no more free ride while others carry your political water. Welcome to the club!

Senator Hollingsworth to be Honored Guest at RAF Luncheon


The Southwest Riverside County Association of Realtors is pleased to announce that Senate Minority Leader Dennis Hollingsworth (R-Murrieta) will be our honored guest at a June 18th luncheon. Senator Hollingsworth has been a champion of legislation to benefit Southwest California during his tenure as as Assemblyman and more recently as Senator. Over the years he has also carried several bills on behalf of Realtors® and for property rights issues.

Senator Hollingsworth has been a staunch anti-tax crusader, a position that elevated him to his current role as Minority Leader when his predecessor got a little too chummy with the tax-and-spend majority in Sacramento. As presented in numerous posts to this site, Hollingsworth has continued to rail against tax increases and the spending abuses that plague our state. Hollingsworth has led the Republican Caucus in advocating reduced spending and smaller government at a time when state government has expanded at a prodigious rate.

On a personal note, I have also credited Hollingsworth with helping Gov. Arnold find his balls late last year at a time when all seemed lost. Hollingsworth, who shares an affinity for cowboy boots and stogies with the Gov., was often spotted with Arnie in the Governors ‘smoking tent’ on the back lawn of the Capitol. It was during this time that Arnold experienced a brief resurgence of the vigor and focus that gave so many hope when he first ascended to the office.

As a former President of the Riverside County Farm Bureau, Hollingsworth has brought a unique knowledge and perspective to his position. He understands the need for conservation and the preservation of property rights. But he also understands the need to balance those needs with infrastructure requirements and job creation. He has lobbied the federal government on the Endangered Species Act and specifically, de-listing the Delta Smelt – the wee beastie that has wrought havoc on our state water supply. He has also led several efforts on behalf of Southwest County as well as the entire state, for more local control of funds, projects and power.

Senator Hollingsworth has also just been confirmed as the Keynote address during CAR’s Legislative Day on June 9th. Delegates from SRCAR and other associations will be meeting privately with the Senator in the afternoon. Attendance at our June 18th event will be limited to those members of our Realtor Action Fund Champions who have invested the ‘True Cost of Doing Business’ prior to June 1, 2010. If you would like to find out more about this event and how to get your name on the guest list for this exclusive opportunity to chat with our Senate Minority Leader, please contact me at GAD@SRCAR.org.

Big Money Talks – FPPC Releases PAC Investment $$

If you want to play with the Big Boys, this is the arena they play in. We didn’t make the top 15 but pulled in at #16. If you do the math, that $49 contribution from EVERY MEMBER only comes to $4.4 million. We invest just 16% of what the Teachers Union does, 31% of the SEIU, less than half of the Pechanga’s. We did edge out the Correctional Workers this year but they already got their big raise a couple years ago. That was money well spent and part of the reason the state budget is in the dumper now.

Any questions about why Arnold listens when the CTA speaks? Any questions on why the state continues to hire people and dole out raises while Riverside County unemployment hits 15%?

You’re either at the table or …

Over $1 Billion Spent by 15 Special Interest Groups on Political Campaigns and Lobbying Efforts

Today the Fair Political Practices Commission (FPPC), the state’s political watchdog agency, released a new report detailing how 15 wealthy special interests spent more than $1 billion throughout the last ten years in an attempt to shape public policy by influencing California’s voters and public officials.

The report, “Big Money Talks,” details the staggering amounts of money these interest groups spent on candidates, ballot measures and lobbying efforts, since electronic filing went into effect in 2000.  Included in this list are six corporations, three Indian tribes, two labor unions and four business associations.

“This tsunami of special interest spending drowns out the voices of average voters, and intimidates political opponents and elected officials alike,” said FPPC Chairman Ross Johnson.

These five interests are responsible for over half of the $1 billion spent by the top 15:

  • California Teachers Association—$211,849,298
  • California State Council of Service Employees—$107,467,272
  • Pharmaceutical Research and Manufacturers of America—$104,912,997
  • Morongo Band of Mission Indians—$83,600,438
  • Pechanga Band of Luiseño Indians—$69,298,909

“The message from special interests is unmistakable—that they’re willing to spend millions of dollars to protect their narrow interests,” Johnson continued.  “The spending also serves as a warning to officeholders:  ‘Don’t forget, we can use our money to help or hurt you.  Think about it.’”

The complete report is available on the Commission’s website and the list follows.

The Top 15 That Spent $1 Billion to Influence California Voters and Public Officials

1)    California Teachers Association                                                         $   211,849,298

2)    California State Council of Service Employees                                 $   107,467,272

3)    Pharmaceutical Research and Manufacturers of America              $   104,912,997

4)    Morongo Band of Mission Indians                                                      $     83,600,438

5)    Pechanga Band of Luiseño Indians                                                    $     69,298,909

6)    Pacific Gas & Electric Company                                                         $     69,240,759

7)    Chevron Corporation                                                                            $     66,257,132

8)    AT&T Inc.                                                                                               $     59,619,677

9)    Philip Morris USA Inc.                                                                          $     50,756,360

10)  Agua Caliente Band of Cahuilla Indians                                             $     49,078,448

11)  Southern California Edison                                                                 $     43,412,031

12)  California Hospital Association                                                           $     43,281,456

13)  California Chamber of Commerce                                                      $     39,065,861

14)  Western States Petroleum Association                                              $     35,214,325

15)  Aera Energy LLC                                                                                   $     34,671,163

Total of Top 15 $1,067,726,126

The Next Ten

16)  California Association of Realtors $     33,329,943

17)  California Correctional Peace Officers Association                         $     32,452,083

18)  California School Employees Association                                         $     31,861,749

19)  San Manuel Band of Mission Indians                                                 $     29,747,811

20)  Reynolds American Inc.                                                                       $     29,213,942

21)  Pala Band of Mission Indians                                                              $     24,021,356

22)  United Auburn Indian Community                                                      $     24,019,877

23)  California Medical Association                                                            $     23,064,218

24)  Anthem Blue Cross                                                                               $     21,993,466

25)  Consumer Attorneys of California                                                      $     21,294,921

Total of Next 10                                                                   $270,999,366

GRAND TOTAL OF ALL 25                                   $1,338,725,492

Transfer Taxes Still a Problem

You’ll remember a couple years back when CAR sponsored a bill to eliminate transfer taxes in the state. We were opposed by an unlikely coalition including the Building Industry and environmental groups (who frequently use the process to blackmail developers out of cash). Our legislation failed but we did get a bill passe mandating that the existence of this tax at least has to be disclosed.

With the exception of Lennar Homes, I’m not aware of any other local applications of this type of tax – but as this recent update from NAR points out – it’s becoming more of an issue with local governments strapped for cash and profiteers looking to make an illicit buck of the unwary homeowner.

Standing Up to Private Transfer Fees, Posted by Brooke

Posted: 03 Mar 2010 07:07 AM PST

I’m proud that two years ago my state association, the Texas Association of Realtors®, stood up to an issue that would have increased the cost of housing and complicated closings.  We helped pass legislation that banned the use of most private transfer fees in residential real estate in Texas.

Private transfer fees are a bit complicated, but they’re important to know about.  They are covenants that claim to run with the title to a property.  Every time the property changes hands, a fee is paid to the original property owner or developer who created the covenant.  The fees have been as much as one percent of the purchase price of the property.  In some cases the fees are being paid for up to 99 years!

We’ve recently been made aware that companies dealing with private transfer fees are marketing their products to developers across the country.  They are bundling these fees so they can be securitized and resold on the open market.  If they succeed in developing a “stream” of these fees to make a credible securitization market, then the use of private transfer fees will increase exponentially because the profit incentive will increase.

Bottom line is this…affordable housing is sacrificed to give financial benefit to someone completely disassociated with the real estate transaction.

In 2008, the NAR Board of Directors voted on a policy against the use of private transfer fees.  But ultimately, we know this is a state matter.  That’s why NAR is offering services to state associations to investigate this issue in their states and evaluate whether they would like to pursue legislation against the fees.

NAR has engaged the services of Robinson & Cole, the firm that serves as our consultant in NAR’s Land Use Initiative.  Robinson & Cole will help state associations write legislation concerning the use of private transfer fees, and NAR will pick up the bill.

CA CEQA law under attack. Job creation urged.

Long a thorn in the side of anybody wanting to build anything in this state, CEQA is under attack this year by members of both parties. The ally of every no-growther in the state, CEQA has  had a hand in delaying or eliminating numerous projects including much needed road, hospital, water infrastructure and home development. Many viable projects have been derailed simply by having their costs explode due to ongoing and capricious environmental requirements. Often just the threat of CEQA is enough to drive project developers to throw their hands in the air.

Want to build windmills to generate electrical power? CEQA compliance will add 6 years to the timetable. Want to put solar collectors out in the middle of the Mojave Desert? Sorry, CEQA says it might disrupt animal migration patterns. Want to add another lane to the I-215? Sorry, you need to re-do all the CEQA stuff you already complied with once even though nothing has changed. Want to build a hospital in Temecula? CEQA will keep you hopping from makework to paperwork in no time at all.

Finally some in our state capitol are growing cajones and saying ‘enough is enough’. We need infrastructure, we need dams and roads and disaster relief and we need JOBS. You’ll note with no great surprise that the Sierra Club bemoans this ‘attack on CEQA’ and ‘developers using the recession as an excuse for rollbacks.’ When the Sierra Club gets into the business of helping create jobs in the state, let me know and I’ll start caring about what they say.

SRCAR has sent a letter to Senator Dennis Hollingsworth in SUPPORT of his bill SB X8-56, outlined below.

capitol weekly

State’s main environmental law targeted on broad front in Capitol

By John Howard | 02/23/10 12:00 AM PST
Years of exemptions from California’s principal environmental protection law are being crafted in the Capitol by the Schwarzenegger administration and lawmakers in both parties, who believe speedy approval of dozens of projects, public and private, will create jobs and spur economic growth. The projects are potentially worth billions of dollars and thousands of jobs — although just how much money and how many jobs have not yet been identified. “If there is a list, if it exists, nobody has seen it,” one Capitol staffer said. “California is going through the worst economic downturn since the Great Depression,” said Sen. Lou Correa, D-Santa, author of one of the exemption bills. “This continues to provide environmental protection and balances that with the opportunity to create jobs.”

Environmentalists say the proposed end-run around the California Environmental Quality Act constitutes one of the most significant changes to CEQA since the law was written 40 years ago and inspired environmental legislation across the country. CEQA is a frequent target of lawsuits and legislation.

Four bills – two in each house – contain Schwarzenegger’s proposal to exempt 25 projects, selected geographically by county, from court review and CEQA each year through 2014. Two of the bills are regular-session measures, the other two were introduced in the 8th Special Session. All are mirror images of each other. Privately, those familiar with the legislation say there is a scramble among lobbyists to get clients’ projects on the exemption list.

The proposals are supported by manufacturers, builders, engineers, developers, business interests and others. They say the proposals will expedite construction of numerous, still-unknown projects and jumpstart the weak economy. They restrict the power of the courts to review the projects and give final authority over the projects to the administration.

The projects could range from refineries to commercial development, housing tracts, highways and water works, among others.

A fifth bill, which would apply retroactively, would exempt critical infrastructure projects for flood control, highways, port security, disaster preparedness and air quality. The proposal is similar to a plan that was proposed last year and rejected. Funding for the projects was approved by voters in 2006 as Proposition 1B, the $19.9 billion transportation bond, and Proposition 1E, the $4.1 billion flood protection bond. Of the funding that was approved, about $16 billion worth of bond funding remains unissued.

The measures containing the administration’s proposals have Democratic and Republican authors. The fifth bill, the infrastructure plan, is authored by Senate GOP Leader Dennis Hollingsworth.

CEQA has long been a target of developers, builders, manufacturers, timber and mining interests and others, but the latest series of bills seeking changes is unusual for their number and scope, observers say. They cite the Legislature’s earlier approval of exemptions for air-emission credits for the South Coast Air Quality Management District and a proposed NFL stadium in Los Angeles County as the progenitors of the latest legislation. Those two proposals constituted the most significant environment-related legislation of 2009.

“We said at the time that they would encourage more of these proposals, and it’s done exactly that,” said Bill Magavern of Sierra Club California. “We’re seeing a stepped-up attack on CEQA this year, and I think we’re seeing development interests using the recession as an excuse for the CEQA rollbacks that they have been gunning for.”

The administration’s proposal, reported by Capitol Weekly in January, is being carried in the Assembly as AB1805 and AB37 8x by Assemblymen Charles Calderon, D-Montebello, and Brian Nestande, R-Riverside. In the Senate, Sens. Correa and Dave Cogdill, R-Fresno, are authoring virtually identical bills, SB 42 8x and SB 1010.

The infrastructure exemptions are contained in SB 56 by Hollingsworth, R-Murietta.

The administration’s proposal allows exemptions for at least 25 construction projects located across California. Ten would be chosen from Imperial, Los Angeles, Orange, Riverside, San Bernardino and San Diego counties; five from Alameda, Contra Costa, Marin, Napa, San Francisco, Santa Cruz, Solano and Sonoma counties; five from Fresno, Kern, Kings, Madera, Merced, Sacramento, San Joaquin, Stanislaus and Tulare; and five projects located in the rest of the state.

The proposal, which includes a provision for at least one public hearing and legislative input, gives final authority over the projects to the Business, Transportation and Housing Agency, or BTH, a cabinet-level superagency whose secretary, a gubernatorial appointee, reports directly to the governor.

The goal of the governor’s proposal is to expedite projects that would generate jobs and stimulate the sluggish economy.

The proposal sets up a timetable for projects to be approved, and allows for approval if the entity seeking the project expects the project ultimately to receive environmental approval. If the project fails the environmental certification, the BTH can choose alternates. The plan calls for BTH to give lawmakers and the public a list of the projects that win final approval.

Environmentalists said the governor’s plan would weaken environmental safeguards, and questioned whether the language barring court review would pass constitutional muster.

Last year, the governor signed AB 81 3X by Assemblyman Isadore Hall, D-Compton, that streamlined certain CEQA requirements to construct a new NFL stadium in the City of Industry. The stadium proposal, already exempted, would not be covered by the latest legislation.

The governor also signed SB 827 by Sen. Rod Wright, D-Los Angeles, with an estimated $4 billion economic impact affecting some 65,000 jobs in the L.A. basin. The bill allows air regulators to distribute valuable emissions credits in the way they did before the courts, responding to environmentalists, blocked them.

Southwest California Legislative Council Announces Position on Bills


The Southwest California Legislative Council, with whom SRCAR is an advocacy partner, today adopted the following positions on current/pending legislation:

Support – ACA 30 (Jeffries) To abolish the office of Lieutenant Governor.
Self explanatory – this largely ceremonial position requires salary & staff expenses and the duties could be consolidated with the Secretary of State.

Support – AB 1671 (Jeffries) To prevent the Governor from appointing vacancies on the County Board of Supervisors.
A recent example in Riverside County left us without the ability to pass certain bills at the county level while Sacramento played politics with us. Our local positions should not be state appointed.

Support – AB 1672 (Jeffries) To make the California Air Resources Board an elected rather than appointed body.
The CARB is one of the most egregious examples of the lack of accountability on state boards & commissions with the Chair stating publicly that if she had to worry about being elected she would worry about all the jobs cost by their recommendation – but she’s not so she doesn’t.

Oppose – AB 1594 (Huber) To prohibit construction of the peripheral canal.
An attempt to circumvent the wording and intent of the state water coalition recommendation and the Nov, ballot initiative.

Oppose – AB 518 (Lowenthal) Provides incentives for cities and counties to reduce or eliminate free or subsidized parking.
Would prove particularly costly to outlying areas like Southwest County where 60% of our residents commute and are forced to park either at work or when they go shopping.  Unintended consequence is a reduction in people going to the malls reducing revenue to shopowners and downstream job market.

Oppose – SB 657 (Steinberg) Require retail sellers and manufacturers to implement policies to eradicate slavery and human trafficking from their supply chain.
Legislation already exists prohibiting slavery and human trafficking. To expect your local grocery store or hardware store to be able to track it’s products back to their origin and potentially take action against some foreign source is ludicrous. Besides, doesn’t Darrell Steinberg have anything better to worry about – like our state budget?

Oppose – SB 810 (Leno) Single payer health care system
We are in agreement that the state should be the appropriate body to determine this issue – rather than the federal government, but this bill is not the answer and would only increase the debt load of the state.

Founded in 2004, the Southwest California Legislative Council is a regional advocacy coalition of the Temecula Valley Chamber of Commerce, Murrieta Chamber of Commerce, Lake Elsinore Valley Chamber of Commerce and the Wildomar Chamber of Commerce. Its mission is to provide a basis for the four chambers of commerce to act on local, state and federal legislative issues to secure a favorable and profitable business climate for our region.

Realtor Action Fund – Your Best Investment in Real Estate

racAs a Realtor® you are part of one of the largest special interest groups in this country – the Realtor® Party, and you have a noble cause – preservation of the American Dream of home ownership. You may not like the idea of being a ‘special interest’ and you may disavow any inclination to participate in the political process that supports it, but that doesn’t change the facts.

Pericles summarized the concept in 500 BC when he said “Just because you don’t take an interest in politics doesn’t mean politics won’t take an interest in you.” I’ve updated that somewhat with the Wunderlich codicil “If you’re not at the table, you’ll probably be on the menu.”

If you think the business of real estate is just about buying and selling houses, you only know half the story. The National Association of Realtors® is the largest grassroots political action group in this country representing more than 1.1 million Realtors® in our nation’s Capitol. Last year we invested more money in candidate elections and special campaigns than almost any other group. That’s the other business of real estate – the part that allows you to stay in your business.

A few members have voiced concerns over the recent decision by the California Association of Realtors® to increase our dues by $49 to cover this vital piece of our business. But in reading through those comments (comment summary on $49 investment), I realized some of you are simply not aware of what these critical funds are used for and the direct benefit you derive. For less than the price of 1 latte a month, you are insuring your political survival and generating a real and measurable impact to your bottom line.

So let’s break down what YOU get for that $49 investment.

  • Just last week we defeated a proposal from CA Senate President Darrell Steinberg that sought to impose a 3% accelerated withholding tax on independent  contractorsthat’s you. If you sold a $100,000 condo, the withholding from your commission check would be $90. On a median price home in Temecula last year that would have taken an additional $260.89 out of your check – every check all year long. If it wasn’t for our successful lobbying efforts you’d be  paying that already because Darrell tried the same thing 3 times last year. Is that worth $49 to you?
  • 1stHave you sold a home to a first-time homebuyer in the past year? Over 1.2 million first-time prospects have become owners since the inception of the tax credit last year – 450,000 of those would not have jumped into the market without that incentive. Who do you think lobbied to get that measure passed last February and then worked extra hard to get it extended and expanded in November against long odds? Selling side commission on a median price home in Murrieta last year was about $8,133. Is that worth $49 to you?
  • Last year Canyon Lake proposed an ordinance requiring every Realtor® to pay a $90 business license fee every year. If you worked in, advertised in, sold a home in, or even mentioned Canyon Lake in your website – you would get a bill for $90. We worked hard to modify that ordinance – not just for Canyon Lake but so that other Southwest California cities didn’t get the idea they could just reach into your pocket without a fight. Is that worth $49 to you?
  • Last election cycle we supported candidates in 9 local city council races. 8 of our candidates won including 3 Realtors®. Do you think it might be helpful to have people serving on our local councils and water boards who understand property rights issues, eminent domain, sign ordinances, zoning and so forth? How about in Sacramento? Or Washington DC? If we had more legislators in place who understood real estate or banking or appraisal issues do you think we’d be having some of the problems we’re having today? Is that worth $49 to you?
  • Would the loss of the mortgage interest tax deduction have any impact on home ownership? How about capital gains tax benefits for home owners? The  mortgage interest tax deduction and capital gains benefits are on the table every couple years in Washington DC as a source of potentially significant tax revenue. They will be again this year. Without your NAR lobby, these significant advantages to homeownership would have disappeared along with a chunk of your business during the past decade. It that worth $49 to you?
  • Would your business be impacted if a buyer could walk into any bank and buy a home from the same salaried employee who gave them a loan? NAR fought an 8 year battle to eliminate a loophole banks were trying to exploit to do just that. We won that fight in 2009. Is that worth $49 to you?

Those are just a few of the things your $49 does. Here’s a few things it doesn’t do:

  • Realtor Action Funds do not support a political party platform or agenda – they support the Realtor® Party. We support candidates who understand our issues at the local, state and national level regardless of party affiliation. Historically our expenditures are split almost down the middle at the federal level.
  • Realtor Action Funds do not support issues or legislation that is not real estate related. At the state level our analysts comb through every one of the 3,300 bills submitted in an average session. About 1,500 of these may be flagged as having some potential impact on either Realtors® or property rights. Our state directors discuss each of those bills to determine whether the Association will support it, oppose it, maintain a neutral position or if it really isn’t real estate related at all. We also sponsor our own bills to address specific real estate issues of concern to our members. You can read about the eight bills CAR  authored for 2010 here.
  • Realtor Action Funds do not support travel by Directors, they don’t pay for lobbyists salaries and they don’t pay for ‘pet projects’. If it doesn’t directly support a candidate or real estate related issue or campaign, it doesn’t come out of these funds. They are too precious to squander and the real need is growing exponentially.

rpacI hope this gives you a better feel for why this latest move was made by our state association. It was not a capricious decision and was discussed in detail for more than a year. In order to continue to be effective at the level our members have come to demand, we
must have the support of all members. 10% or 20% can’t continue to pay for benefits demanded and enjoyed by 100% of the membership. That’s neither fair nor equitable.

We welcome your input and questions and I encourage you to visit http://gadblog.srcar.org/ to take part in the discussion.


3% Withholding Dead Again (For Now).

The 3% IC withholding proposal which we defeated 3 times last year was again on the table last week courtesy of Senate President Darrell Steinberg. Those of you at Indian Wells recall the discussion that the idea would be in play again this year as it would presumably bring in an estimated $2.5 billion dollars to off-set the $20+ billion projected deficit. Of course the money would come in this year and have to be refunded next year digging an even deeper hole for the 2011 budget – but thinking a year ahead has never been a strong point in Sacramento. Last week we were called on to lobby our Senators on this issue to keep it from coming to a floor vote or to defeat it if it did. It comes as no surprise that Senate Minority Leader Senator Dennis Hollingsworth was solidly in our camp having called Steinberg on it as soon as he resurrected the idea.

Yesterday the Senate Budget Committee, in its wisdom, decided not to bring up independent contractor withholding for a vote at its meeting. For the time being, we’ve won, but Steinberg is expected to push it again later in the year as the budget fight heats up.

For those members concerned about their $49 investment in political survival, you might ask them if they would rather have paid the extra 3% ($90 out of pocket on a $3,000 commission). This is what the $49 does – not travel for Directors, not salaries for lobbyists and not to pay for Chief Economist Lawrence Yun.

Comments on the New $49 Political Action Investment

CEO Connie Lynch recently sent out an e-blast  informing members of the recent decision by the California Association of Realtors® to spread the cost of political survival evenly across our membership rather than continuing to rely on 10% or 20% of members to bear the load. As expected, reaction was as mixed as it was during our BOD discussion at Indian Wells. But the over-arching result from the feedback we received was that some of our members remain sadly misinformed on political matters in spite of years of effort to educate them. I guess it’s the old ‘lead a horse to water’ dilemma where you can provide the information in a variety of formats and sources but you can’t force them to read it – until you catch their attention with money.

If you would like to read my earlier post on the subject, click here: Political Survival Investment No Longer Voluntary

If you are interested in CAR’s 2010 legislative activities, click here: CAR Sponsors 8 bill in session

So here are a few of the comments we received along with my responses to them. I suspect those folks won’t read this since they obviously didn’t read my earlier post on the topic – but we keep trying.

MS – Good Move. It’s for a damn good cause. Thanks!!
Thank you.
CR – I think it is totally reasonable to require $49 a year to support our political agenda.
Thank you.
PM – I doubt you want to hear what I have to say to your strong arm tactics.
Yes we do.
AF – Why can’t some of our meeting/convention people stay home for a change.
Well, we could do that but it really doesn’t have anything to do with this topic. Political survival will be necessary regardless of who travels where and this money is not spent for that.
BK – I will never give a penny to support CAR’s political activities. In addition I will recommend all Realtors opt over to an alternative account.
That’s why we created it as an opt-over. You don’t have to support Realtor® political activities even though you benefit from them.
KJ – It’s good to see socialism alive and well. I will be looking for a law group to make money fighting you.
Well, CAR already has law groups who have made money advising us this is OK but we anticipate there will be members who would rather spend thousands fighting this than invest $49 on their political survival.
JF – Apparently once a lobbyist is hired they can’t be fired so tax people more to keep them employed.
Our lobbyists can be hired or fired, although fortunately for our members our senior lobbyists have been around for years and are very effective on our behalf. But again, this money doesn’t go to pay our lobbyists so they’ll keep working for you regardless. Oh, and it’s not a tax – it’s a dues increase pure and simple. It’s the cost of doing business being shared equally by all who benefit rather than a few of us paying for most of you.
DA – Believe the board is treading in uncharted waters here and putting a lot more at risk than their pet political projects.
Well, these waters are hardly uncharted – numerous groups have been here, done that – it’s just new for us. As for our ‘pet political projects’, those are called Realtors® and our clients. If you look at the legislation we sponsor and support from the local to the federal level, every single piece is either for the benefit of Realtors® or to protect the property rights of your clients.
LM – I resent it!!!!!!!!
LC – This is completely out of line. You have stepped beyond your authority!!!!!!!!
It’s actually right in line with what needs to be accomplished for the Realtor® party and, no, it is within our authority!!!!!!!!
RD – Then you will not get the other $349 from me in 2011!
Then you will not be a Realtor® in California.
DD – Your lobbying at the beginning of the decade plus dictating to Lawrence Yun to disclose only optimistic news contributed strongly to what we are going through now.
Again, these funds have nothing to do with Lawrence Yun (NAR Chief Economist), who is widely regarded as one of the leading economists in the country, not just by NAR but by most economists and scholars. Not sure what lobbying we did that resulted in the sub-prime melt-down. Had our lobbying been more effective against the Barney Frank’s and Maxine Water’s of the world, GSE loan limits would have been raised 8 years ago and the whole sub-prime debacle could have been avoided. We also had nothing to do with Fed monetary policy or with the banks greed – but I’m certainly open to hearing where we went wrong.

Please feel free to chime in. We welcome your ideas and thoughts whether you agree with the decision or not. But keep a couple things in mind. Money raised for political action IS NOT SPENT for other purposes. It does not pay for salaries or travel or lobbyists. PAC funds are either spent on issues campaigns such as the extension of the 1st Time Homebuyer Tax Credit, or to defeat onerous legislation like last years ACWA sponsored home energy audit bill. PAC funds are also spent supporting local, state and federal candidates that have demonstrated an understanding of Realtor® issues and private property rights. In the 2008 election cycle that included supporting 9 local city council and/or water board candidates, 8 of whom were successful.

Pericles understood the concept in 500 BC when he said “Just because you don’t take an interest in politics doesn’t mean politics won’t take an interest in you.” Like it or not, as a Realtor® you are part of one of the largest special interest groups in the country, and one with a noble cause – preservation of the American Dream of homeownership. If you think the only business of real estate is buying and selling houses, you’re working with only half the picture.

Sacramento Bee’s Update on the 3% Withholding Proposition from Darryl Steinberg

Popular Comment

Typical Steinberg logic. Let’s deduct 3% of all moneys paid out in order to reduce the deficit next year and then pay it back the following year, increasing the deficit to 80 Billion. I don’t know if he imbibes too much ‘sauce’ but something is wrong. How does he conjure up all these unbelievable ideas? I’m glad I live in his district. At least I’ll have the pleasure to vote against him in his next election. I certainly hope many others plan on doing the same thing. I’ve had more then enough of Darell Steinberg. He’s a master of confusion; a purveyor of asininity and is one of the most illogical individuals in our government. Time for a Part-time Legislature!!— Perspicacity

Callifornia lawmakers revive forced withholding proposal


Buzz up!
By Steve Wiegand
When it comes to balancing the state budget, no idea ever wears out its welcome. That explains why lawmakers are currently pondering a list of revenue-raising proposals that bit the dust just la

Published: Monday, Feb. 15, 2010 – 12:00 am | Page 3A

When it comes to balancing the state budget, no idea ever wears out its welcome.

That explains why lawmakers are currently pondering a list of revenue raising proposals that bit the dust just last year.

Chief among them is a proposal to require private companies and government agencies to withhold 3 percent of payments they make to independent contractors.

That’s a group estimated to consist of more than 3 million California taxi drivers, lawyers, farmers, miners, plumbers, real estate agents, food storage container salespeople, home builders and others who in essence act as their own bosses.

By withholding part of the payments as income tax and transmitting it to the state, the Franchise Tax Board estimates the state could pull in $1.4 billion during the year instead of having to wait until the contractors filed their tax returns.

Moreover, the FTB estimates that the forced withholding would produce an additional $140 million to $375 million per year that contractors don’t pay now because they under report their income.

That would help close a fairly decent-sized chunk of the $19.9 billion budget gap the state faces over the next 17 months.

“We would be applying the same withholding rules to these businesses that we apply to people who work for employers,” said state Senate President Pro Tem Darrell Steinberg, D-Sacramento, a leading proponent of the idea.

Steinberg points that it’s not imposing a new tax, merely “smoothing out” the collection of a current tax.

That means it takes only a majority vote in both legislative houses rather than the two-thirds margin required for tax hikes, and thus avoids the mountainous obstacle of minority Republicans who are opposed to most revenue raising proposals.

But it doesn’t remove the muscular roadblock in the governor’s office, where Gov. Arnold Schwarzenegger vetoed similar proposals last January and last June.

The idea, Schwarzenegger said in his veto message in January, “punishes Californians by raising revenue without providing permanent and ongoing cuts, does not create jobs or stimulate our economy, (and) does not allow government to run more efficiently in California.

As with most ideas under the dome, the independent contractor proposal wasn’t born yesterday – or last year.

In 1991, a budget crisis prompted then-Gov. Pete Wilson to embrace a similar plan. But fierce lobbying by a confederacy of groups forced Wilson to abandon it in favor of a temporary increase in top income tax rates.

Even if Schwarzenegger changed his mind, which is problematical at best, it’s not a simple task, the governor’s Department of Finance said.

“It could be the Manhattan Project of (tax conformity) efforts,” said finance spokesman H.D. Palmer. “It would involve a significant IT (information technology) undertaking.”

Finance officials provided an example in which a health care provider contracts with an X-ray company that’s a subsidiary of a company that is owned by doctors who for legal reasons are individually incorporated.

Figuring out who owed what tax and who was owed refunds would require a six layer process, officials said.

In addition, the state would only be borrowing much of the money, and would have to refund a lot of it. A 2005 FTB study estimated that more than 70 percent of affected taxpayers would have more withheld than they would ultimately owe, and the state would have to refund almost half of what it collected early.

Tracy Hamilton isn’t keen on making what amounts to an interest-free loan to the state.

Hamilton is a 34-year-old Sacramentan who makes her living selling cosmetics and other beauty care items for Avon Products Inc.

She also supervises a team of about 65 part-time salespeople, including many state workers who are striving to make up for the 14 percent pay cut they’ve taken because of mandatory furloughs.

Some of Hamilton’s income comes from selling products face-to-face to customers.

She takes their checks, forwards a share to Avon, and pays her taxes at the end of the year.

Another portion of her income comes from online sales, in which the customer’s money goes to Avon, and the company sends Hamilton’s share to her. That’s the part that would be subject to withholding.

“That would bother me a great deal,” Hamilton said.

“Being self-employed is hard enough, because everything falls on you, every bill, every expense. To take something out on top of that would be very hard to manage.”

That’s the key difference between salaried taxpayers and independent contractors, according to Amy Robinson, vice president of communications at the Direct Sellers Association, a 200-company group based in Washington, D.C.

“Salaried employees receive compensation for their work every day,” Robinson said in an e-mail. “Independent contractors, direct sellers in particular, are only compensated from the sales and growth of their business.

They need every cent they earn to start, maintain and grow their independent business.” It’s a perspective not lost on Steinberg.

“If we move forward with this, we could have a threshold for small businesses like this,” he said. “But here’s my basic view on it: There is a strong policy rationale for (this) withholding, just as we do for people classified as employees.” More important, he said, is that in the never-ending struggle to balance the budget, everything is a choice.

“Nothing can be seen in isolation,” Steinberg said. “I look at the potential of collecting $1.5 billion in taxes that are already owed, compared to $1.5 billion in additional cuts to education, or health care for kids, or caring for the elderly and disabled … and it’s a pretty simple choice for me to make.

“And that’s what this whole struggle is about, making choices.”

© Copyright The Sacramento Bee. All rights reserved.

CAR Sponsors Eight Bills in 2010 Session

After a successful year spent playing defense against a variety of point-of-sale bills and several tax measures aimed at Realtors®, the California Association of Realtors® is going back on the offense this year with eight new bills we are sponsoring. A sponsored bill is one that we author and then find a legislative sponsor – either Senator or Assembly member – to carry the bill for us. The selection of an author is a critical process as some bills have greater appeal to Democrats, others have more appeal to Republicans, some appeal to both in equal measure and some have no appeal at all. It’s a fascinating process that I’ll explain to you sometime if you’re interested.

The eight bills we’ll be sponsoring this year include:

SB206 (Dutton) – REO Homebuyer Tax Credit. As introduced, SB206 would have created a program similar to the federal first time homebuyer program providing a tax credit up to $8,000 for the purchase of a principle residence. Due to the state’s fiscal crisis it was later determined modofied to limit the tax credit to purchases of REO properties. At our recent BOD meeting, the language was further modified to include supporting a recent proposal by the Governor for the purchase of new or existing homes IF a reliable source of funding is found. This means if the Governor sponsors a bill to address substantially the same issue, we will abandon SB206 and sign on to support the Governor’s efforts assuming anybody can find money to fund such a program.

Local Property Maintenance Ordinance – (No author yet). This legislation will pre-empt over-reaching local vacant property ordinances that may adversely affect the market and unfairly expose Realtors® and homeowners to liability. While many cities, including those in Southwest County, have adopted workable ordinances to address abandoned property maintenance and blight issues, other cities have determined these ordinances are excellent sources of revenue for their cash-flow and have levied substantial fines. In some cases, the level of the fine is in excess of the value of the property. This bill would supersede local ordinances.

Anti Deficiency Protection (Corbett) – This bill would extend the existing borrower protections against personal liability for a purchase money loan to either refi the property or for improvements that increase the value of the property. Current policy states that any refinance, even with no cash out just to reduce interest rates, automatically shifts the loan from non-recourse to recourse. This bill addresses that.

CID Unit Owner Right To Rent – In 2008 we sponsored AB2259 (Mullin) which would have allowed current property owners within an HOA to continue to use their rental rights until such time as they sold the property even if the HOA decided to restrict rentals. Approved almost unanimously in both houses, it was vetoed by the Governor. This bill would require a 2/3 approval in a CID for any amendment that would prohibit owners from renting or leasing their units.

Portable Appraisals (Correia) – Current law permits, but does not require, lenders to utilize an appraisal ordered by a different lender. This bill states that if an appraisal is ordered and prepared by one lender, a second lender would be required to accept the appraisal to support the mortgage.

Appraisal Management Company (AMC) Regulatory Oversight (Hall) – Driven by the HVCC, Appraisal Management Companies have grown
enormously in both scope and power over the past two years. In 2009 CAR supported SB237 (Calderon) which subjects AMC’s to review by the Office of Real Estate Appraisers (OREA). This bill clarifies and expands OREA’s oversight of these behemoths. Since we can’t seem to stop HVCC at the federal level, we are trying to at least establish some control and oversight at the state level. By the way, HVCC technically sunsets this year but nobody is betting that the process or the AMC’s will simply pack it in and go home.

DRE ‘Poison Pill’ Reserve Protections – During the 1990’s the Governor and Legislature raided Department of Real Estate funds to help balance the budget. CAR sponsored legislation stating that if the funds were taken it would trigger a rollback of license fees to 1982 levels. The bill passed. Years later the state again  raided the DRE money but stated that it was borrowed by the general fund so the rollback was not triggered. We again addressed the matter legislatively and closed that avenue of pilferage. In 2009 DRE coffers were again raided in a manner than again did not trigger a rollback as the funds were not stolen, not borrowed, but loaned not to the general fund but directly to another department, the DOJ. Back to the drawing board yet again.

Advance Fee Definition Clarification (Hayashi) – Last year we supported SB 94 (Calderon) to prohibit ‘cash up front’ loan modification contracts. However, the language that emerged in the final bill requires some clarification of the definition of advance fees for services such that it cannot be construed to include a listing agreement – which is technically a fee agreement for future services to be rendered.

The legislative deadline for identifying authors and obtaining bill numbers is February 15 so we will keep you apprised of developments and successes in our 2010 advocacy efforts as they occur. Stay tuned for RED ALERTS as we elicit your support to persuade legislators of the importance of these measures.

There are also hundreds of ‘bills of interest’ in the process of being introduced by others. At future meetings CAR will evaluate those bills and members will be asked to take a position.

For a complete (as of January 2010) summary of both CAR sponsored bills as well as a list of these others bills of interest, please go to:


CAR Takes Positions on Ballot Propositions

At last weeks Board of Directors meeting the California Association of Realtors® took the following positions on upcoming ballot propositions:

Proposition 14 – Elections: Open Primaries Legislative Constitutional Amendment. Neutral
It was voted in committee and brought forward to the General BOD that this issue was ‘Not Real Estate Related’ but after some floor debate membership determined it has enough impact on real estate to warrant our involvement in the issue.

Proposition 16 – New 2/3 Requirement for Public Electricity Providers: Against
It was determined by committee that this proposition, supported by PG&E, is aimed at stifling competition by privately owned utility companies and could result in higher utility bills for homeowners.

Proposition 17 – Continuous Coverage Auto Insurance Discount Act: Not Real Estate Related

Safe, Clean and Reliable Drinking Water Supply Act of 2010 (Not yet numbered): Neutral

Proposition 13 – Property Tax: New Construction Exclusion: Seismic Retrofitting ; For

Proposition 15 – Political Reform Act of 1974: California Fair Elections Act of 2008: Not Real Estate Related

On any proposition or legislation evaluated by CAR analysts, the BOD may take any of the following positions:
FOR – implies implicit support of the measure including the possible expenditure of time & money to assure passage.
AGAINST – implies active efforts including the possible expenditure of time and money to insure failure.
NEUTRAL – the measure has some real estate relevance that warrants attention but not enough to spend time & money on.
NOT REAL ESTATE RELATED – arguably any issue can be related to real estate since ‘under all is the land’ but these issues do not have any real estate impact as their primary focus.

As always, we encourage you to examine all propositions and ballot measures on your own and vote your conscience.


Effective 2011 Political Investment No Longer Voluntary


At our Mid-Winter Board of Directors meeting this past Saturday, the California Association of Realtors® overwhelmingly voted on a motion out of the Political Affairs Committee to begin assessing every Realtor® the amount of $49 effective in 2011 for the purpose of funding our political activities.

At the urging of the Government Affairs Director sub-forum, CAR adopted the concept during our October meetings, directing legal staff to determine the most efficient way to implement the policy. The determination, published as an Issues Briefing Paper prior to Januarys meeting, recommended a ‘political assessment opt-over approach’, which was ultimately the direction voted on by the BOD. The opt-over provision allows the member to determine whether the investment amount shall be directed toward the Realtor® Action Fund or ‘opted-over’ to an alternative account.

A bit of history. Since 2000 the CAR political action committees (PAC’s) have grown and shrunk based on membership numbers and the real estate market. In the 2001-2002 election cycle, the PAC’s were funded by $3.8 million of voluntary political contributions. By 2006-2007, the PAC’s funding had increased to $10.1 million. In the past three years those receipts have fallen to just $2.5 million for 2009. As our organization faces increasing challenges at the local, state and federal level, that amount is simply not enough to keep us as a serious player in the political arena.

In addition to our ongoing local and state efforts, we are facing three additional challenges in the coming years that may require significant expenditures.

First there is a proposal on the June 2010 ballot to allow open primaries. If approved by voters this will dramatically increase competitiveness in at least 32 state legislative races. With more competition, the more costly each race becomes and the greater the demands [placed on our PAC’s.

Second, the 2012 re-districting will radically alter the political landscape for Senate and Assembly Districts. That may place additional demands on our PAC’s when combined with the potential for open primaries.

There will also be increased demand in both the 2012 (Gubernatorial) and 2014 (Presidential) election cycles.

With over $19 million spent during the past year, NAR ranks as one of the top ten lobbying organization in the country and the #1 grassroots trade association lobby in Washington. Having achieved so much on behalf of our members and for our customers private property rights, we cannot abandon that position now. We’ve invested too much time and money to make it happen, we can’tsimply walk away from the opportunity we’ve created for ourselves.

In 2009 voluntary contributions to our Realtor Action Fund fell to just 19% of members from a peak of 35% in 2004. That means 81% of our members were freeloading and letting a few of us carry the weight. That’s right. 81% of our members could not see their way clear to investing $49 in their own political survival. $4 a month was too great a burden. That’s less than a #3 special at In-N-Out, one latte, 2 lines in the classifieds.

The program has been vetted legally to assure it complies with California laws on campaign contributions and is consistent with other state and federal laws. No doubt the will be some legal challenges from people who would rather spend thousands on attorney fees than $49 for their own political survival – but CAR is confident it will prevail – especially since CAR is not the first or the only trade association to implement this structure. Dentists, teachers and others have long enjoyed a fund-raising advantage since all members invest in their PAC. And we won’t even talk about the unions or the recent decision by the Supreme  Court allowing corporations to fund candidates from their general fund.

For those members with a religious or cultural aversion to political advocacy, you can direct your investment into an issues oriented fund that will not be used to directly support candidates.

This is a terrific move for CAR and one that has long been advocated as a way to equitably share the cost of our successful advocacy program across the membership rather than just saddling a few of us with the burden. It also means I won’t be hitting you up for a contribution every time I see you. That in itself should be worth $49 bucks.

There will be more information available on the CAR website soon and I’ll make sure that is posted for your review.