By Nathan Walldorf, ABR, GREEN, GRI, SFR, e-Pro
President, Greater Chattanooga Association of REALTORS®
This past week, GCAR leadership convened in Washington, D.C., with thousands of REALTORS® from across the country. The purpose? To meet with your Senators and Representatives to discuss issues critical to our businesses, our communities and the consumers we serve.
Just as our country experienced during the great recession, our nation’s economy is tied to the health of the real estate market. Certain policy changes in Washington could easily harm the real estate market and in turn the entire economy. Below are the four key messages GCAR leadership conveyed to legislators in our recent visit.
Real estate-related tax policies are vital to the economy. The mortgage interest income tax deduction, the property tax deduction, and the like-kind exchange all have positive impacts on the economy. Taking away these tax credits could harm the real estate market, which would hamper overall economic growth. Taking away the mortgage interest tax deduction would make it more expensive for people to own homes, which would greatly impact the 88% of people in the US with incomes lower than $200,000 per year. Repealing the property tax deduction would result in double taxation – being taxed on your income and on your property tax. The like-kind exchange allows business owners to sell their building and move into another building without being taxed on the proceeds from the original sale. That exchange helps businesses grow and creates more jobs. These tax breaks are a necessity for the ownership of real property.
Don’t raise the cost of home ownership. REALTORS® believe that qualified borrowers should have access to safe and affordable mortgage financing. While in DC, we encouraged elected officials to enact legislation that prohibits guarantee fees (G-fees) from being extended, increased and diverted for unrelated government spending (i.e., outside the housing industry). In 2015, REALTORS® were successful in compelling legislators not to add G-fees charged to home sellers to help pay for road construction. Moving forward, GCAR wants to be sure that our legislators continue not to allow G-fees in their future budgets. If such fees are placed on home sales, buyers and seller may wait to enter the market, which would slow down the market’s growth and have a negative impact on the economy.
Reform condominium financing and make other needed housing reforms. Condos often are the most affordable homeownership option. Yet, obtaining financing for such a purchase has its challenges. GCAR leaders urged Senators to bring a bill to the floor to reform condo financing. The proposed bill would make it easier to get financing for condos and could create more affordable housing options if passed. Some of the current financing restrictions are so cumbersome that developers do not want to build condos. Those condos would provide more inventory and also could help an aging portion of the US population to downsize.
Allow for private market flood insurance. Currently, the only option for flood insurance acceptable for federally related mortgages is through the National Flood Insurance Program. REALTORS® believe that program needs some competition to drive rates down. Flood insurance premiums have risen at a shocking rate over the past 5 to 7 years. The companies that sell flood insurance also need some oversight to be sure they have the funds to protect home owners when a natural disaster does happen.
At home and in the nation’s capital, GCAR REALTORS® are fighting to protect the rights of property owners. Looking to sell or buy in southeast Tennessee or northwest Georgia? Contact an expert who cares about you and your well-being. Contact a REALTOR®.