University Heights mayor open to conversation about restrictive point of sale policy
Following its early success in Euclid, the Akron Cleveland Association of REALTORS® (ACAR) has taken their message of point of sale (POS) reform to University Heights.
ACAR representatives sat down with University Heights Mayor Michael Brennan in July to discuss the city’s POS policy.
While interior POS inspections are not happening in University Heights for the time being – likely the remainder of 2020 – that has only been a result of an executive order signed by Brennan as a response to health and safety related to COVID-19.
However, ACAR would like all Ohio cities to adopt this change permanently, changing inspections to exterior-only inspections for all properties, not just those for rent or sale.
Jamie McMullen, vice president of government affairs for ACAR, shared an executive summary of two different studies with Brennan that looked at the potential negative impact of point of sale policies on local real estate markets.
One study conducted by the National Association of REALTORS® (NAR), titled the 2017 Student Loan Debt & Housing Report, indicated that 27 percent of homebuyers reported having student loan debt with the typical amount of debt in the $25,000 range, with that percentage increasing to 40 percent when looking solely at first-time homebuyers.
Additionally, 83 percent of non-homeowners, most of whom were renting a property, indicated that student loan debt was a primary reason why they’ve put off buying a home. That delay was a median of seven years, according to the study.
A second NAR study, the 2020 Down Payment Expectations and Hurdles to Homeownership report, indicated that 26 percent of first-time homebuyers said that saving for the down payment was the hardest part of the homebuying process.
In the last five years, the top four reasons for being unable to save for that down payment have been, in order, student loan debt, credit card debt, car loans and rising rent.
Not surprisingly, millennials – who make up the 26-40-year-old demographic – were most likely to report student loan debt as a major factor. This is important because millennials make up the largest share of home buyers (38 percent) and 86 percent of younger millennials, and 52 percent of older millennials, were first-time homebuyers, more than any other demographic group based on age.
It is also important to note that homeownership is still a priority for many. 78% of non-owners believe homeownership is a good financial decision. Additionally, 81% of non-owners want to own a home in the future.
Joining McMillen at the meeting with Brennan were ACAR members Seth Task and Amanda Pohlman. They shared with Brennan challenges that both buyers and sellers may encounter when navigating the POS policy in University Heights.
These challenges often include timing delays with re-inspections, escrow amounts, financing, a diminished pool of potential buyers and other cosmetic items on the city’s checklist.
Brennan told ACAR that his administration inherited the current system in University Heights, but that he wasn’t quick to undo what was put in place by his predecessors. His rationale for maintaining the status quo (once the pandemic subsides) was to ensure housing stock is maintained and the health and safety of the public remains secure given the typical size of a property lot.
The mayor also shared information about the recently implemented Exterior Maintenance Inspection Program whereby city inspectors do exterior inspections to identify code violations on all properties. The program helps ensure compliance with the City’s Appearance Code.
“[It was] a good discussion with well-thought-out dialogue and active listening by everyone,” Pohlman said. “I believe that the mayor has every intention to research and understand how the point-of-sale can negatively impact housing prices, the availability of loans, and challenging timing issues for closing properties.
“I just bought a property in University Heights last week and appreciate that the process was easier during COVID due to eliminating the need for interior inspections and escrow holds that could otherwise have held up a closing that happened in 18 days.”
Although no consensus was reached between Brennan and ACAR during the meeting, both parties acknowledged a willingness to revisit the topic in the future.
If you have a story like Pohlman’s that you want to share about a transaction in University Heights, or any other city, ACAR wants to hear from you. Personal stories have the greatest impact in an attempt to make change. If you would like to submit your story, tell ACAR about it here.