Attacks on realtors by the Wall Street Journal and President Biden, a pair of unusual HUD endeavors and Chicago voters rejecting the “mansion tax.” From the wild and wooly world of real estate, here are our Hits and Misses for the week of March 18-22.
Miss: A Worthless Opinion. The editorial board of the Wall Street Journal showed extraordinary ignorance this week in an opinion piece that claimed real estate professionals were a bunch of crooks. Within a commentary on the National Association of Realtors’ (NAR) $418 million settlement, the Journal’s editors opined the real estate profession was working against the best interests of their clients with “a rigged game that pads their pockets at the expense of consumers.” The editors further insisted that “empirical evidence also shows that buyer brokers steer clients away from homes whose sellers paid them less than 2.5% to 3%” – of course, they didn’t bother to share the alleged evidence. The Journal has seen a rather stark deterioration in its content quality over the past dozen years, though this editorial was ridiculous even its low standards.
Miss: Being Too Polite. This week, President Biden unexpectedly decided to blame realtors for the current affordability problems in the housing market. During a campaign speech, Biden misidentified NAR, falsely claimed that “for the first time that Americans can negotiate lower commissions when they buy and sell their home,” and then demanded that realtors “follow through on lowering commissions to protect homebuyers.” While Biden’s dumb statement deserves condemnation, NAR President Kevin Sears issued a rebuttal statement that many realtors felt was too soft in the face of the president’s scurrilous remarks. Sears’ declaration that “NAR commends President Biden for recognizing the need to build a stronger housing supply” was particularly galling, considering Biden barely mentioned “housing” over the past three years. And speaking of Biden, that leads us to our next entry.
Miss: A New Low in Hubris. In case you missed this, the U.S. Department of Housing and Urban Development (HUD) announced a multi-city publicity tour designed to trumpet what it describes as the “key milestones and accomplishments since the beginning of the Biden-Harris administration as well as priorities for 2024.” This endeavor is wrong at multiple levels, not the least being its violation of the Hatch Act, which is designed to prevent civil servants in the Executive Branch from engaging in political campaigning and activities – and, seriously, it is no coincidence that the tour was announced just as the Biden re-election campaign began to acknowledging housing as a major issue. This is one of the last departmental actions by Marcia Fudge, who steps down as HUD secretary today and who was previously cited for Hatch Act violations while in the Biden cabinet.
Miss: More HUD Shenanigans. Also this week, HUD released what it called a “first-of-its-kind report to Congress on the housing needs of survivors of human trafficking.” The report considers outreach and engagement with trafficking survivors, as well as determining the availability of homelessness and housing services. But what the report blithely ignores is why there has been a spike in human trafficking within this country – three years of an open southern border. While the victims of trafficking need assistance, we have to be honest about how and why they came into this country while coming up with a genuine strategy to put this madness to a halt.
Hit: Score on for Chicago. In a pleasant surprise, Chicago voters rejected the referendum on the so-called “mansion tax” designed to increase the real estate transfer tax on residential and commercial properties sold for $1 million and higher. Mayor Brandon Johnson claimed the tax would have generated revenue to help fund the city’s services for the homeless, but the referendum’s opponents complained it would have unfairly penalized hard-working and successful Chicago residents without actually solving the city’s homeless crisis. Using class warfare to divide people is an old political trick, and it is delightful to see Chicago voters refusing to take the bait.
Hit: Getting Ready for Tomorrow. NAR’s aforementioned settlement will change how the real estate profession operates, and praise should be offered to two trade organizations that are preparing for this new environment. The National Association of Real Estate Brokers (NAREB), which represents the interests of more than 100,000 Black real estate professionals, is preparing its member agents and brokers for the post-Sitzer/Barnett world by appointing a special task force that will study the projected impact of the settlement on its members, as well as the Black community, and it will develop a toolkit to provide its members the most relevant information and access to resources that can assist them. Separately, Mortgage Bankers Association (MBA) President and CEO Bob Broeksmit announced his organization is “reviewing the settlement and working with our fellow housing stakeholders like the National Association of Realtors to identify potential policy and market solutions that limit disruption to real estate transactions and ensure that all parties to the transaction are well-represented and those representatives are compensated fairly.” Whereas many NAR members have complained that their organization is not listening to its members, NAREB and MBA clearly have their respective members’ best interests in mind.
