REALTOR® Advocacy
The Issues
Oppose rent control because:
- The market should be able to set the price of rental housing, not the government.
- Rent control deters new construction of rental housing and sharply decreases equity, sales and capital appreciation.
- Rent control inhibits the ability of owners to earn adequate return on investments.
- Rent control discourages maintenance of rental housing, thus reducing the quality of rental housing available in the community.
- Rent control often subsidizes rent for people who can comfortably afford to pay market rents.
Oppose rent control on newly constructed residential rental units.
Oppose legislation that restricts owner move-in rights because owners have the right to occupy their own property.
Support state intervention in local rent control laws.
Oppose efforts by local governments to force rental housing owners to stay in the rental housing business (Ellis Act).
Oppose requirements tied to point of sale because:
- They unfairly burden home sales transactions. To place the burden of the whole community on only homebuyers and sellers is inequitable.
- They are highly inefficient in getting all members of a community to comply with new standards. While some homes are sold only after a few years, many others remain with the same owner for years, or even decades. Therefore, if new standards are really important enough to be mandated by law, then the implementation of those standards should be applied to all homes in the community.
- They add complications to sales transactions. Another step only delays the escrow process and adds more stress to the homebuyer and seller.
- The cost of retrofitting or of an inspection can cause the home sale price to increase drastically, leaving the potential homebuyer with an added expense, and possibly, the inability to purchase a home.
- Government mandates should be implemented, overseen and administered by the appropriate government agency not by real estate agents.
- Oppose new and separate disclosures in real estate transactions when they are unnecessary and when they may subject REALTORS® to unreasonable liability by referring to the wrong source for detailed information.
- Support uniformity and standardized language in the local disclosure process by requiring all localities to use the same form.
- Local REALTORS® may oppose a local option disclosure, on the grounds that any additional disclosure requirement is unnecessary and may subject REAL TORS® to unwanted liability, unless the lack thereof could leave agents vulnerable to liability.
Oppose the imposition of any transfer tax (TT)because:
- TTs are an extremely volatile and unreliable source of revenue, which can lead cities to overestimate the revenue from their TTs because they cannot predict the extent of a decline in the housing market when preparing their budgets.
- TTs add one more cost to a growing list of expenses which must be considered in the purchase and/or sale of a home, and these expenses decrease the mobility of households because it becomes too expensive to move.
- TTs decrease housing affordability.
- Renters and non-resident workers benefit from the general city services that home buyers and sellers are paying for through the TT which is unfair to those home buyers and sellers.
- Many first-time homebuyers who have tremendous difficulty in saving for a down payment will be particularly hard hit.
- TTs are levied whether or not the seller makes a gain on their home, unlike the capital gains tax.
Oppose the imposition of any private transfer tax (PTT)because:
- PTTs can be imposed for an unlimited number of years. Generally, the minimum length of time that PTTs are currently being imposed ranges from 20 to 25 years; however, many are imposed in perpetuity.
- The cost of a PTT can be prohibitively expensive for homeowners and buyers. PTTs of up to a total of 1.75 percent of a home’s sales price have been seen; however, there is no upper limit on the percentage of a home’s sales price at which a PTT can be set.
- PTTs imposed on affordable housing only serves to make that housing less affordable.
- The requirements for disclosing the existence of a PTT are limited al best. In addition, the PTT requirement can be masked by not having it apply to the first buyer but, instead, having it apply only to subsequent buyers.
- There is no limit to the number of PTTs that can be imposed.
- The funds generated by a PTT can be used to pay for projects that do not directly benefit the property, the development or the immediately surrounding community.
- Support the disclosure of existing PTTs to avoid real estate licensee liability associated with nondisclosure.
- Support current law which says government must pay fair market value, excluding any increase or decrease attributable to the project for which the property is being taken.
- Support that government compensate property owners based on the highest and best use of the property taken.
- Support prohibition of taking single family property by eminent domain for any use other than for public use.
- Support making it easier for property owners to transfer their existing property tax base.
- Support the requirement of courts to award the prevailing plaintiff attorney fees and costs should the plaintiff prevail when challenging: a) the validity of the taking of property; or b) the valuation of the property.
- Support the requirement of a) independent licensed appraisers to be used in eminent domain proceedings; and b) local government agencies to reimburse property owners the cost of an additional appraisal in eminent domain proceedings.
- Support tightening the definition of “blight” used by local government agencies proposing to create or expand project areas.
- Support the reduction of the time period during which the initial finding of blight may exist in a newly created project area.
- Support the reduction of the time period during which local government agencies may take property by eminent domain.
- Support the requirement of a re-evaluation of the necessity of a project area on a periodic basis.
- Support the requirement of local government agencies to disclose to all property owners that they may transfer their property tax base if the qualified replacement property is within the same county.
- Oppose new obligations on sellers and their agents to disclose that a property is located in a project area.
- Support the requirement of local government agencies to adopt a more quantitative analysis when determining if a parcel is -blighted.”
- Support the requirement of local government agencies to include in their appraisal of a parcel to be purchased, the cost of the replacement parcel.
- Oppose mandatory forms of inclusionary zoning (IZ) because:
- IZ does not address the factors that contribute to the high cost of market rate housing such as high land costs, lack of available sites, developer fees and exactions, and a cumbersome permitting process.
- IZ requires resale price controls.
- IZ forces homebuilders and homebuyers in other income levels to absorb affordable housing subsidies.
- Oppose reducing the current 2/3 vote threshold for approving parcel taxes.
- Oppose the imposition of a parcel tax which would be collected In conjunction with a property’s ad valorem property taxes.
Oppose ballot box land use planning, which takes land use decisions out of the hands of locally elected officials and gives power over private property to the electorate because:
- II encourages NIMBY-ism (NIMBY = Not in my back yard).
- It undermines legitimate general plans and local government authority.
- Oppose abusive or predatory lending practices.
- Support increased penalties tor fraud, deception, or deliberate non-disclosure that results in the loss of a borrower’s equity.
- Oppose legislation that lowers the availability of home loans and negatively impacts the housing market.
- Oppose vague or overly broad definitions that would inadvertently prohibit legitimate subprime lending.
- Oppose restricting the availability of legitimate sub-prime loans to borrowers with poor credit.
- Oppose attempts to characterize all sub-prime loans as “predatory.”
- Support punishing abusive or predatory practices, restricting credit to high risk borrowers.
- Oppose the taxation of REAL TORS® individually as independent contractors rather than as employees· of the broker.
- Oppose increases in Business License Taxes (BL Ts).
- Oppose levying a tax on out-of-city REALTORS® equal to in-city REALTORS®.
- Oppose BLT on both REALTORS® and employing brokers.
- Support that BLTs be addressed at the local level and not via state legislation which raises the employee/independent contractor issue.
- Support local government approval of housing development applications that are in compliance with the local government’s adopted general plan, zoning code, and development standards.
- Oppose local government arbitrarily reducing the density of a housing development, unless the local government can produce substantial evidence that the reduction is consistent with its adopted general plan – including its housing element.
- Support local government modifying unreasonable parking, setback, height, lot size, or similar standards to the extent needed to build affordable housing at the density established in local government zoning ordinances.
- Support limiting local government housing moratoriums.
- Support compelling local government to amend their general plans (including housing elements) in a timely manner.
- Support incentives for local governments to approve new housing or promote rehabilitation of the existing housing stock.
- Support greater enforceability of “RHNA” (Regional Housing Needs Assessment) quotas for local government.
- Oppose local governments requiring housing developers to purchase additional property to be “up-zoned” prior to downzoning the current development application. The trade off undermines the policy behind the density bonus law.
- Oppose requiring developers to open their financial records to local governments to prove that a concession or waiver of development standards is necessary for the project to “pencil out,” unless the city is providing direct financial resources to the project.
- Oppose local government requirements that the resale or transfer of a unit built under the density bonus law be subject to 30-year price restrictions because these restrictions remove any opportunity for the purchaser to earn enough equity to purchase another home, if he/she must sell in less than 30 years.
- Oppose local government rules that impose development standards that make it practically impossible to build senior and affordable housing with density bonuses.
- Support housing developers receiving a density bonus and flexible conditions upon which developers may voluntarily produce affordable housing.
- Support the development of second units because they can be an available source of additional affordable housing stock without using additional land or infrastructure.
- Support that applications for second units must be ministerially approved by local governments if it is consistent with the development standards of that city or county.
- Oppose local government ordinances (such as requiring up to five parking spaces for every second unit) that have the practical effect of barring second units from a community.
- Support reasonable and practical standards for condominium conversions, which enable local government to approve development applications.
- Oppose new requirements for converting rental property into condominiums, which delay conversions.
- Oppose requiring property owners to evict tenants only for just cause (e.g., non-payment of rent).
- Oppose the prohibition of property owners from raising rent on any unit being converted during the last 6 months of the conversion.
Oppose the creation of any new layer of state or regional government that would usurp or diminish the authority of local government over land use.
Support proposals that simplify and/or streamline the process by which property owners are able to develop their land.
Oppose transferring local land use authority to the Legislature, to a Local Agency Formation Commission (LAFCO), or to any new regional land use agency or commission because:
- It would make it difficult for local government to make unequivocal findings regarding a proposed land use.
- There may not be direct accountability to the people affected.
Oppose prescriptive slate mandates on the local land use decision-making process.
Oppose the development of regional comprehensive planning strategies and mandatory “lock in” of regional decisions in local government general plans.
Support permitting property owners and their real estate agents to display temporary open-house and directional signs in public rights-of-way that are in agreement with the local government’s reasonable dimension, design, and traffic safety concerns because real estate signs are an indispensable tool in the marketing of a property.
The Top 10 List of Wants
Signs are allowed on private property with the property owner’s permission. While most cities prohibit signs on public rights-of-way such as medians, we request the opportunity for lead-in signs on some medians during open houses and in a way that respects public safety.
Under California law, Realtors who are working under a licensed broker should operate under that broker’s local business license and should not be required to obtain his or her own business license.
REALTORS® oppose the practice of local government mandates to be carried out before the close of escrow. While most such requirements are desirable for the safety and habitability of a home, “point-of-sale” practices add excess risk, cost and potential delay to a sale. Meanwhile, approximately 2-4% of all homes will sell per year in a city; point-of-sale fails to address building safety and occupancy concerns in homes that will not be sold for many years.
REALTORS® oppose transfer taxes because they are a volatile and unreliable source of revenue; they decrease housing affordability; and they burden home buyers for costs of general city services that should be borne equally by all residents. REALTORS® also oppose “private” transfer taxes because the cost can be prohibitively expensive (up to 1.75% of a sales price, however there is no limit); and the funds generated can be used to pay for projects that do not benefit the property or the community.
Increasing the supply of affordable and entry-level housing will allow people to gain a foothold into homeownership. The lack of affordable housing is a societal problem and all of society should share the responsibility for addressing it. A “carrot” method – rather than a “stick” method – is most effective at making affordable housing accessible to families who need it most. Programs such as voluntary density bonuses and flexibility in building permits may help improve access to affordable housing. However, we oppose mandates like inclusionary zoning and price controls because they may actually reduce the availability of affordable housing and increase costs to developers, builders and consumers.
Simply put, rent control does not work. While intended to make affordable rental units more available, especially in expensive rental markets, it in fact has the opposite effect. Rent control actually reduces the number of low-rent units available to prospective tenants, it reduces the incentive for property owners and managers to maintain and improve their properties, and it even impedes or reduces the incentive for tenants to move to another location, whether to get a higher paying job, personal and family situations, or other reasons.
Cities are urged to use caution before restricting or banning short-term rentals and vacation rentals. These are often local businesses that bring regular cash flow to investors or property owners, and they bring positive economic impact to the community. Property owners and property managers are urged to screen their tenants carefully before entering into a short-term rental contract and, as in any landlord-tenant relationship, bear certain responsibilities for public health and safety in the community. Restrictions or outright bans are unnecessary, they impact private property rights, and they preclude the local city from receiving economic benefits.
REALTORS® oppose land use planning and zoning by initiative, or “ballot box planning”. It takes land use decisions out of the hands of locally elected officials and gives power over private property to the electorate. It encourages NIMBY-ism (NIMBY = Not in my back yard) and it undermines legitimate general plans and local government authority.
Vacant/Foreclosed Property Registries add expense, risk and administrative burden to properties with very little benefit in return. Cities without such registries can already identify foreclosed properties from existing sources and can use their municipal codes to ensure public health and safety. In the case of foreclosures, defaults, and even short sales, out-of-town lenders may be unaware of or refuse to comply with regulations, sellers may have no funds to pay registry fees, title and rights-of-access to the property may be unclear and a transaction may held unduly delayed or fail to complete. Cities should audit their existing programs first to discover and improve any deficiencies before implementing a property registry.
The South Bay Association of REALTORS® is a leading institution for real estate matters in our area. We have access to expertise, market data, neighborhood values, and experience in what works and what does not with respect to home sales in your city. We have a long and public track record of work in collaboration with local cities and elected officials on issues that affect our profession and your cities residents and businesses.
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*Please note, this information is subject to change.