Monthly Archives: July 2017

Wisconsin REALTORS® Continue To Fight For Lower Property Taxes

Flooding

Did you know that since 2013, the Wisconsin REALTORS® Association (WRA) has saved local homeowners more than 500 million in property taxes?

The WRA believes that inflated property taxes are a serious concern for Wisconsin residents, most of whom pay some of the highest property taxes in the country. According to Wallethub.com, homeowners and businesses are paying approximately $9.6 billion in property taxes, compared to $7.5 billion in income taxes and $4.8 billion in sales taxes. WRA has been working hard to change these unfairly weighted numbers and remove the tax burden from homeowners.

In 2013 the WRA launched a strategic campaign that was entirely dedicated to the outcome of lowering property taxes. The association polled residents and used the information gathered to launch grassroots advocacy campaigns. WRA also put out a call to action, asking all members to individually campaign for lower property taxes. Additionally, lowering property taxes was one of the primary topics REALTORS® discussed with legislators during the annual REALTOR® & Government Day event at the capitol in Madison.

The collective campaign efforts were extremely effective, and property taxes were lowered by $100 million over the following two years. The WRA continued with this outreach formula in 2014 and the second round of campaigning translated into an additional $406 million in lowered property taxes over the next few years.

Presently, the 2017 campaign seeks to add an additional $180 million property tax reduction. However, this campaign contains a new element. Governor Scott Walker’s proposed budget not only supports the lowering of property taxes but calls for an increase in school funding. WRA’s campaign has extended its support and during this year’s REALTOR® & Government day more than 300 REALTORS® lobbied their state lawmakers to support Governor Walker’s proposed budget.

Connecticut REALTOR® Boards Improve Their Community’s Quality of Life With Local Placemaking Projects

City Park

Flooding

“Never doubt that a small group of thoughtful, committed citizens can change the world. Indeed, it is the only thing that ever has.” – Margaret Mead, Anthropologist

July 2017 – The National Association of REALTORS® (NAR) have been working with REALTORS® across the nation in order to lend support to their community building efforts by offering Placemaking Grants. The idea behind “placemaking” is to fund smaller community projects that bring a large impact to the people who live there.

Frances Cormier-Carroll, Executive Officer of the Greater Fairfield Board of REALTORS® (GFBOR), agrees. “Placemaking Grants are one of the best things that the National Association of REALTORS® has done for the local boards!” GFBOR feels that the grants not only uplift the community but help local homeowners to see that REALTORS® are advocating for them and their neighborhoods.

Carroll’s boards have made good use of NAR’s small-scale grants. Just last summer, GFBOR partnered with the Town of Fairfield, Connecticut to create a ‘pocket park’ on a small plot of unused public land at a downtown crossroads.

With a $3,000 placemaking grant from NAR in hand – GFBOR’s 2016 President Stephanie Barnes, Co-Chairman Michael Traum and Kristen DeLaurentiis, pitched the idea of building a small, attractive green space for families and residents to gather. The town of Fairfield was excited to move forward with the idea. Numerous planning meetings and about 100 man hours later – the new “pocket park’ was born.

The small space featured new trees and plantings, a winding brick pathway and three comfortable benches. The end result was a creative use of space that gave the community a peaceful and attractive place to rest and socialize. Fairfield’s First Selectman, a former REALTOR® and Past-President of GFBOR, noted the new space also enhanced property values for residents.

The nearby Newtown Board of REALTORS® (NBOR) used a $1,500 Placemaking Grant to help establish a ‘Fruit Trail’ along an existing recreational path on the 185-acre campus of a former hospital. The Newtown Fruit Trail connects the community with nature, supports the local bee population and it’s young fruit trees will be a source of fresh fruit for residents in the years to come.

Like many placemaking grant projects, the local NBOR REALTORS® not only offered funding for the project but also showed up to physically help make it a reality. NBOR President Barbara Frey and seven of her REALTOR® colleagues got their hands dirty, weeding, mulching and planting fruit trees and perennials. And of course, all of the plantings that NBOR helped to install were purchased from a nearby nursery in order to support the local economy.

Carroll shared how proud she was to watch these projects take root, “These boards, Newtown especially, are on the small side, but their members are deeply involved and committed to improving their communities.”  She added that, “there’s been a great community response to these placemaking projects, from neighborly notes to recognition from officials. We are so grateful to NAR and the Placemaking Grant program for making this possible.”

Austin REALTORS® Work To Make CodeNEXT A Reality for Homeowners

Flooding

REALTORS have been heavily involved with CodeNEXT, an initiative to rewrite Austin's existing Land Development Code.Click To Tweet

The city of Austin, TX is known for being a politically progressive and modern urban destination. The city’s existing development codes however? Not so modern at all. Austin’s Board of REALTORS® (ABoR) noted in a recent member newsletter that, “The last major rewrite of Austin’s Land Development Code took place in 1984, when Apple had just released the Macintosh Personal Computer, the USSR was busy boycotting the Summer Olympics in Los Angeles, and Ronald Reagan was President.”

The fact is, the city’s building guidelines were updated more than 30 years ago – when Austin’s population was less than half the size it is today. It is no surprise that Austin experienced a population boom. The city’s popular music scene, award winning barbeque and beautiful public spaces continue to be a draw for many prospective homeowners.

Despite the antiquated building guidelines new construction and renovations have continued, with the city amending the code as issues arise. However, this band-aid approach has produced an overly complicated system that is difficult to navigate, inflates costs for consumers, and doesn’t provide the variety of housing needed in a growing city. The historical code also fails to address modern day issues such as growing demands on the city’s natural resources, a lack of affordable housing, food deserts, access to healthcare, and limited options for transportation.

In 2012, Austin’s City Council adopted the Imagine Austin Comprehensive Plan – a plan that laid out the city’s vision for the future, including managing the continuing growth. The plan included CodeNEXT, an ambitious initiative to rewrite the existing Land Development Code and create updated criteria for “what, where and how much can be built in Austin.”

ABoR has been heavily involved with CodeNEXT from the start, advocating for a code that is simpler, more transparent, and good for the long-term health of Austin. Andrei Lubomudrov, ABoR’s Government Affairs Analyst elaborates. “The Land Development Code is critical to defining property rights as well as the long-term viability of our housing market.” ABoR has been a key voice in raising awareness about the need for an updated development code with community members.

The organization has invested considerable time educating its membership, with the goal of equipping REALTORS® to help current and prospective homebuyers understand the negative impact the existing code has on home values as well as raising awareness about the CodeNEXT initiative. Education and advocacy around the new code has been ABoR’s key public policy priority as many homeowners feel that the rewrite is the most important issue the city council will face this year.

ABoR has also been reaching out to Austin council members in order to stay connected and act as a resource. They recently spoke with District 2 Council Member Delia Garza who explained how the existing code was hurting the residents in her district. Garza shared that while affordable housing and transportation remain key issues for Austin, the health issues resulting from the outdated code are her priority.

In particular, district 2 has many areas that are considered “food deserts,” in part because the existing code prevents the development of needed grocery stores and quality food outlets, and also because lower-density land uses do not create the residential mass needed to attract large-scale grocers. This lack of healthy food options is more than an inconvenience as one part of District 2 has the highest rate of childhood obesity in the city. Garza stated, “While health disparities, particularly access to healthcare and healthy food, may seem at odds with the issues of affordability and transportation, all of these issues are connected at the heart of it.”

So far, in 2017, the process has been bumpy as the draft proposed code has been widely viewed as falling short of expectations. Yet, despite the many pitfalls of deciding land use policy for a city that ABoR CEO Paul Hilgers often describes as “traditionally opposed to both sprawl and density,” ABoR continues to make raising awareness about the importance of CodeNEXT a priority.

Next Steps for Flood Insurance

Flooding

Residents of Barnegat Bay in New Jersey know a thing or two about flooding. Superstorm Sandy brought record storm surge and tidal flooding into the area in 2012.

It’s a problem a lot of residents of coastal areas have to always worry about in the back of their minds. It’s why they also have to have flood insurance separately from their homeowners policy, which doesn’t cover flooding.

To access that coverage, homeowners depend on the National Flood Insurance Program (NFIP).

The NFIP provides relief for residents in at-risk communities. The program isn’t government funded or subsidized by taxpayer dollars. Instead, it is made up of the premiums of individuals who have the insurance for their property.

The program matters for 22,000 communities nationwide to provide flood insurance in high-risk areas. And flooding happens everywhere, not just in coastal areas.

Virtually every state has had at least one flood disaster declared by the President in the past decade. #floodingClick To Tweet

“That’s the biggest misunderstanding,” said Austin Perez, senior policy representative for the National Association of REALTORS® (NAR). “Virtually every state has had at least one flood disaster declared by the President in the past decade.”

One such community is Darby, Pennsylvania, 100 miles due west of Barnegat Bay. It is inland. A landlocked borough, the only water that residents see is Darby Creek, which flows through the city.

In 1999, its residents suffered through Hurricane Floyd. More than $26 million in aid was provided to these residents.

Baton Rouge, Louisiana is also 100 miles inland, sitting due north of the Gulf of Mexico. In August, 2016, a no-name storm lingered over the state of Louisiana and dropped more rain than Hurricane Katrina.

Most of those residents in Darby and Baton Rouge didn’t have flood insurance and were buoyed by federal aid provided by the Federal Emergency Management Agency (FEMA).

In 2016, there was no major catastrophe like Hurricane Katrina or Sandy.

And yet, 2016 saw the third largest loss year for the NFIP in its nearly 50 year history. More than half of that was because of the inland flooding in Louisiana.

“There are so many other ways to have damaging floods besides coastal hurricanes and storm surge,” Perez said. “There are flash floods, snow melt, or a low pressure rain storm that doesn’t move.”

About the National Flood Insurance Program

The NFIP is a program that helps a lot of people. In 2005, when Hurricane Katrina struck, the average NFIP claim payment was $92,000. From 1996-2016, the average payment was closer to $43,000.

Since standard homeowners insurance doesn’t cover flooding, everyone should consider buying flood insurance.

“A second misconception about flooding is that the federal government will provide enough disaster assistance to make you whole again.  Not true,” Perez said.

Between 2005 and 2014, the average household grant was $5,500 – and even that relatively small amount isn’t available to everyone. Accessing those dollars requires a claim to be filed followed by a FEMA investigation.

“The payout is determined to assist in providing individual assistance to make a home livable, not getting it back to where it was before the flood,” Perez said. “For the vast majority, the most you can expect is an SBA loan, which must paid back plus interest along with the mortgage.”

The NFIP currently generates about $3.5 billion in policyholder premiums, which is available for flood losses in any given year. But what happens in a catastrophic year like 2005, when seven major hurricanes including Katrina, Wilma and Rita struck the Gulf coast and amounted to flood losses approaching $20 billion in a single year?

The Program must borrow from the U.S. Treasury to be able to cover all the claim payments. So far, the program has borrowed $25 billion and is paying $400 million in interest alone each year, which is why it has its share of critics – especially those who think flooding is limited primarily to coastal regions of the country.

Flood Maps and Grandfathering

The NFIP must be reauthorized by Congress every 5 years in order to continue selling flood insurance. That authority is again due to expire at the end of September unless Congress acts to extend it.

While there seems to be widespread, bipartisan recognition in Congress not to shut down the program again, there are two issues that are being discussed as part of a broader reauthorization and reform measure– flood mapping and grandfathering.

When FEMA’s mapping system was developed in the 1980s and 90s, it was state of the art in identifying high risk floodplain better than ever before. It wasn’t until Tropical Storm Allison in 2001 that the NFIP faced its first billion dollar storm, which it was able to absorb within a year or two.

#Flooding is now costing the United States about $10 billion per year according to NWS damage estimates.Click To Tweet

But flooding seems to have intensified over the past decade and is now costing the United States about $10 billion per year according to National Weather Service damage estimates. There is more flooding in the U.S. today than ever before, and the NFIP is struggling to keep up.

So, what needs to change?

First, the mapping system. But modernizing the current system could require an expensive overhaul or at least the adopting of new technologies that can provide far more accurate mapping, even so far as on a building-by-building basis.

In North Carolina, LiDAR (light detection and ranging) technology is being cost effectively used to capture building specific mapping information from airplanes using laser pulses like radar. Without it, FEMA maps only show flood zones, not buildings or their elevation – a key factor in measuring risk. The result is that any home within a high risk zone is presumed to be “high risk,” regardless of elevation. As flood maps become more accurate, it is also important that property owners have some time to adjust to the new risk information.  This is where grandfathering comes in.

Grandfathering enables property owners who built to code to use the previous map to rate the structure when the map is updated with the latest technology and data for the area.  This has the effect of keeping the cost of insurance down while the property owner decides if and to what extent s/he wants to mitigate the risk before the insurance rates reach the levels reflected on the latest map. .

“It provides a transition,” Perez said. “Rather than jumping from one rate to the next, it allows you to pay it over time. It takes some of that surprise out of the cost for flood insurance.”

For example, a home was built to code in 1983. New mapping is conducted and it shows the home is now below the new 100-year flood plain by two feet. Grandfathering would allow that homeowner to use the old rate for a period of time to adjust to new data with annual rate increases so your rate doesn’t just balloon from $2,000 to say $10,000 overnight.

Additionally, some property owners could be overpaying if in fact their property is built higher than the flood plain but they continue to use the grandfathered rate when the rate based on the elevation of the latest map is less.

“Grandfathering provides you with certainty,” Perez said. “And that’s what matters more than the discounted rate for a short period of time.”

“If an individual is paying taxes and fees for a flood map it should be complete and accurate from the outset,” Perez said. “FEMA should be using those advanced methods already. Yes, there may be a considerable upfront cost, but it will be more than paid back over time as fewer properties are built in harm’s way or to elevations so they don’t flood. It’s time to rip off the band aid and move into the 21st century when it comes to mapping technology.”

Approximately 70% of all NFIP policies come from California, New Jersey, Texas, Florida and Louisiana. According the experts, the cost just to map these 5 states using LiDAR would be around $100 million.

“That’s a very reasonable cost when we’re talking about flood damage in the billions of dollars,” Perez said.  “FEMA’s mapping program is authorized up to $400 million annually, but Congress appropriates less than half of that. So, this would be a modest increase but would dramatically improve the accuracy of the flood mapping for 70% of NFIP policies. For every $1 invested in flood mapping the Association of State Floodplain Managers has shown that it avoids $2 in property damage, which saves the taxpayers money because they spend less on disaster relief to repair properties that would otherwise be built in harm’s way without the maps.”

“It’s not everything, but it’s a really good start.”

Read More about flood insurance:

What You Need To Know About Flood Insurance

Here is all you need to know about the National Flood Insurance Program (NFIP), and the proposed legislation to reauthorize the program once it expires at the end of the year.

Video: Do You Know What N.F.I.P. Stands For?

If you haven’t heard about the National Flood Insurance Program, you may want to watch this video because what you don’t know can cost you. Big dollars.

Newly Passed House Bill Will Avert Flood Insurance Disaster

The State of Hawaii has passed House Bill 1418 to clarify our state building laws and avert a disaster in our federal flood insurance coverage.

Quiz: Flood Insurance

Take our quiz and find out how much you know about floods and flood insurance.

Heavy Rains in Hawai’i Can Cause Catastrophic Damage to Property

Heavy rains can happen at any time and can result in flash floods. In October 2004, a flash flood in Manoa, a residential neighborhood in Honolulu, caused $85 million in damage.

Hawai’i Homeowners May Find Themselves Without National Flood Insurance

Hawaiians who rely on the National Flood Insurance Program may soon find themselves without any protection if the state government doesn’t act soon.

4 Steps To Help You Protect Your Home Investment

Whether you plan on staying in your new home for five years or fifty, it’s important to make sure you are protecting your investment.

Gulf Coast REALTORS® to Sponsor Flood-Insurance Conference

Property owners in Mississippi’s Gulf Coast region have suffered a number of hardships over the last 10 years, and the Gulf Coast Association of REALTORS® has been working to help them deal with issues arising from those hardships.

Fargo-Moorhead REALTORS® Search for Flooding Solutions

When flooding occurs on the Red River of the North, you can find members of the Fargo-Moorhead Area Association of REALTORS® on the front lines, helping with emergency responses and efforts to find long-term solutions. Homeowners in the Fargo-Moorhead …

Mississippi REALTORS® Seek Disaster Aid for Homeowners

The Mississippi Association of REALTORS® is advocating for legislation that will provide Mississippi homeowners with important information and resources in connection with natural disasters. This proposed legislation is intended to address some of the …

Wisconsin REALTORS® Are A Legal Resource For Property Owners

Wisconsin Capitol

Murr v. State of Wisconsin

Wisconsin residents who find themselves at the mercy of changing property laws may not realize they can find support at their state REALTOR® offices. In 1978, the Wisconsin REALTORS® Association (WRA) set up a Legal Action Program in order to advocate for residents on land use and property rights issues. The program is funded entirely by local REALTORS® who contribute a portion of their annual dues to the Legal Action Fund.

The Legal Action Program typically intervenes in property related cases in several ways; they can act as an “amicus curiae” or “friend of the court”, be a party to a lawsuit, identify expert witnesses, provide relevant research or act as a member of a coalition. In short, while the Legal Action Fund does not pay legal fees, they will use a wide variety of available resources to help Wisconsin property owners to resolve their legal dispute.

An ongoing example of the program’s work is the case of Murr v. Wisconsin. The Murr family purchased their land in 1960 and in 1963 they bought an adjacent lot thinking it would be a good investment for future generations. However, in 1973 the state of Wisconsin passed a law that changed all of that.

Under the law, St. Croix County adopted a new ordinance stating that any property that failed to meet a minimum lot size would be considered “substandard” and not developable. There was a grandfather clause built in that would allow owners of individual lots to develop or sell the lots. However, if someone, like the Murrs, owned two or more substandard adjacent lots, the ordinance required the lots to be consolidated. Therefore, if the Murrs wanted to build another home on their adjacent property or sell the second lot to a developer they were out of luck.

According to the ordinance, the only way the Murrs could capitalize on their 1963 investment would be to merge their lots and forfeited the profit they could have earned had they been able to sell or develop the second lot independently.

The Murrs sought legal recourse without much success. The circuit court rejected the Murr’s claim and upheld the county’s ordinance. Their appeal was not only denied but the process created new property laws that would have an enormous statewide impact. During the Murr’s hearing, the Wisconsin Court of Appeals ruled that moving forward, a parcel of property had to be combined with any adjacent parcels owned by the same person when evaluating the impact of the regulation on the parcel for regulatory takings purposes.

In plain speak, the Murrs were forced to combine their lots because the second lot was too small (or “substandard”). But after this new ruling, size no longer mattered. Any two adjacent properties owned by the same person are now required to be consolidated if the property owner wishes to contest existing regulations – regardless of size. Quite a deterrent for property owners who might wish to challenge existing regulations.

The Murrs didn’t give up and tried to take the case to the Wisconsin Supreme Court, which subsequently rejected their appeal.

Because of the potential impact the Murrs case had on property rights for all Wisconsin landowners the WRA stepped in. Through its Legal Action Program the WRA filed an amicus (“friend of the court”) brief with the United States Supreme Court.

The WRA’s brief asked the court to invalidate the court of appeals’ rule, highlighting, among other things, the rule’s inconsistency with Supreme Court precedent and numerous Wisconsin laws that protect the rights of property owners and treat each individual lot as property.

On June 23, 2017, the U.S. Supreme Court upheld the Wisconsin Court of Appeals’ ruling and rejected the Murrs’ regulatory takings argument.

The WRA’s Legal Action Program continues to support the Murrs, but more importantly they are working to prevent the state of Wisconsin from redefining property laws in a way that will hurt landowner’s ability to control how the status of their property.

Americans See Homeownership as Good Investment

Eighty-four percent of Americans now believe that purchasing a home is a good financial decision – the highest number since 2007, According to the National Association of Realtors®’ 2017 National Housing Pulse Survey.

Yet six in 10 said that they are concerned about affordability and the rising cost of buying a home or renting in their area. Housing affordability was ranked fourth in the top-five issues Americans face in their area behind the lack of affordable health care; low wages and debt making it hard to save; and heroin and opioid drug abuse, and ahead of job layoffs and employment.

View our inforgraphic for more insight from the 2017 National Housing Pulse Survey.

Click the image to view a larger version.

REALTORS® Make Affordable Housing a Reality for Utah Families

Utah Capitol

With recent increases in housing costs, many Utahns struggle to find affordable housing both in the purchase and rental markets. Securing affordable housing is particularly challenging for low-income residents. In fact, Utah faces a 38,000-unit shortfall in the number of rental units available to extremely low-income families, according to the 2016 State of Utah Affordable Housing Assessment and Plan.

The Utah Association of REALTORS® works to promote affordable housing in Utah. So it was no surprise when REALTORS® supported legislation that would make it easier for low-income families to purchase or rent a home.

The UAR joined Lt. Gov. Spencer Cox’s Utah Affordable Housing Task Force to help provide solutions. The task force, which consisted of stakeholders statewide, focused on developing legislation to help alleviate the state’s affordable housing shortage.

The resulting legislation, House Bill 36, consists of three parts designed to boost the availability of affordable housing:

First, the bill supports the Olene Walker Housing Loan Fund, which develops housing for very low-income, low-income and moderate-income residents.

Second, the bill creates incentives for landlords to rent to low-income Utahns.

Finally, the legislation expands tax credits to help investors create affordable housing. To receive the credits, developers are required to pass their cost savings on to low-income renters.

The bill’s sponsor, Rep. Becky Edwards, explained in legislative testimony that the legislation “build[s] on models that we have seen and are existing right now that we know are successful in increasing the inventory of affordable housing.”

As the Legislature considered the proposal, Utah REALTORS® spread the word about the need for affordable housing and encouraged voters to contact their legislators to support the bill. Ultimately, the Utah Legislature passed the bill, and Gov. Gary Herbert signed it into law on March 23, 2017.

As these programs take effect, Utah REALTORS® will monitor their effectiveness and continue to promote affordable housing within the state.

Texas Homeowners Come Out On Top Following Successful Legislative Session

Texas Capitol

There were several homeowner-related victories during the regular session of the 85th Texas Legislature, including bills that will enhance disclosure, restrict fees on new construction, and give voters a way to increase access to the equity in their homes.

Home equity will be on the ballot

Home equity protections have been in the Texas Constitution since 1997. However, the lending market has changed and some homeowners may not be able to fully access the equity in their homes.

On November 7, Texas voters will have the chance to allow more homeowners to access the equity in their properties, thanks to an amendment to the Texas Constitution that will be on the ballot. If voters approve the amendment, it will take effect Jan. 1, 2018 and will apply to new home-equity loans made on or after the effective date and existing home-equity loans refinanced on or after the effective date.

More disclosure for real estate consumers

On June 15, Gov. Abbott signed a bill that will protect real estate consumers from misleading real estate advertisements and require disclosure from real estate wholesalers. The legislation takes effect Sept. 1, 2017.

Gov. Greg Abbott also signed a bill that puts a mechanism in place to provide real estate buyers disclosure about the impact of potential aircraft noise and other activities from nearby military installations. This legislation also takes effect Sept. 1, 2017.

Prohibiting fees on new construction 

The governor also signed a bill that prohibits cities from imposing California-style linkage fees on all new residential and commercial construction.

These fees would raise costs to real estate consumers and harm economic growth and expansion in Texas.

The bill took effect as soon as he signed it on May 29.