This is (hopefully) a brief post, inspired and triggered by something I saw on Facebook today. My friend Lisa Heindel, a broker in New Orleans, wrote up a post dealing with REALTOR.com’s partnership with AirBnB. It appears that a number of people in NOLA are not particularly happy with AirBnB, and Lisa isn’t too thrilled at the partnership:
For the official site of the National Association of REALTORS® to advocate in favor of what is essentially an illegal enterprise in our city is disheartening and we don’t believe it’s an appropriate relationship. [Emphasis in original]
Read the whole post; it’s interesting on a lot of levels.
Plus, another REALTOR on the Facebook thread made this comment:
Between this and services like Uber taking business away from legitimate, licensed taxi providers, this does not bode well for the long term and for the people who need to live (and make a living) in these areas long term. Greed and missing the forest for the trees = bad combination.
And I agree… Realtor.com should NOT be partnering with a program that encourages illegal activity …most municipalities I would think have definite rules and zoning regulations for what is essentially a hotel service.
The level I find most interesting is that Lisa, a dedicated REALTOR, whom I’ve met at NAR events, believes that NOLA’s regulation of short-term rentals is A-OK.
So, here’s what I’m wondering about now. Just what percentage of card-carrying, dues-paying, pin-wearing REALTORS actually agree with the policy positions of the National Association of REALTORS (and its state and local affiliate REALTOR organizations)?
Iura Bonurum Defensor
That phrase, which is probably grammatically and in other ways totally wrong, should translate to “Defender of Property Rights”. Many European monarchs put “Fidei defensor” (meaning, “Defender of the Faith”) in their titles, signifying that their right to rule was closely connected to their defense of Christianity against both paganism and Islam (aka, “the Moors”).
Similarly, NAR does a lot of things, but it’s central identity, it’s core mission, and indeed, in many ways, it’s justification for continued existence is tied up with its defense of private property rights.
I called NOMAR (New Orleans-Metairie Association of REALTORS) and spoke with the GAD, Kelli Walker, who told me that NOMAR has not taken an official position on short-term rental regulations, because nothing has been put on paper yet by any city legislator/regulator. And maybe NOMAR will support regulating homeowners who rent out their homes for a weekend or two via AirBnB or VRBO or whatever. But if they did so, it would be odd.
One place I did find an official position on short-term rentals is Massachusetts Association of REALTORS:
Occupancy tax proposals promote the creation of a new tax on homeowners who choose to rent their homes for a short term. In addition to established businesses like hotels, motels and bed and breakfast establishments, these proposals would allow a city or town to levy a room occupancy tax on any apartment, single or multiple family housing, cottage, condominium or timeshare unit. Private homeowners or real estate agents would then be responsible for the collection,handling, and remittance of these taxes to the Department of Revenue.
Action Needed: Ask your legislator to oppose room occupancy legislation that would increase taxes on homeowners.
Personally, I can’t see how any organization can claim to defend private property rights, and then turn around and support government interference into how a homeowner chooses to use his private property — including renting it out for a day or two or a week.
So, let’s assume for the sake of discussion that NAR opposes regulating, taxing, or otherwise intruding on the private property rights of homeowners who might wish to rent their houses out to renters on a short-term basis.
What percentage of REALTORS support that position?
If they fail to support that position… does that mean anything?
Differences of Opinion vs. Differences of Belief
I think about something like a political party. Just because you belong to one party or the other doesn’t mean you agree with everything that the party stands for. For example, the Democratic Party’s official platform supports gun control legislation and regulation. But I personally know Democrats who are 2A advocates. That doesn’t make them non-Democrats, any more than disagreeing with the GOP on say gay marriage makes me a non-Republican.
However, some issues are central to an organization. For the Democratic Party (at least in 2012) it was this:
This has to be our North Star—an economy that’s built not from the top down, but from a growing middle class, and that provides ladders of opportunity for those working hard to join the middle class.
This is not another trivial political argument. It’s the defining issue of our time and at the core of the American Dream. And now we stand at a make-or-break moment, and are faced with a choice between moving forward and falling back.
To disagree with that statement does mean you’re not a Democrat. (Or at least, you shouldn’t be.) So if you embrace the idea of cutting corporate tax rates to zero, or eliminating the capital gains tax, or getting rid of welfare completely… you cannot be a Democrat in any meaningful way.
Similarly, the Republican platform’s central theme, it’s core belief, is “smaller government”:
This platform affirms that America has always been a place of grand dreams and even grander realities; and so it will be again, if we return government to its proper role, making it smaller and smarter. If we restructure government’s most important domestic programs to avoid their fiscal collapse. If we keep taxation, litigation, and regulation to a minimum.
You cannot call yourself a Republican in any meaningful sense of the term if you embrace massive expansion of the government, more regulation, and huge spending funded by massive tax increases.
For NAR and its members, the question then is… is private property rights an ancillary issue (like guns or gay marriage) or a core belief issue (like economic policy and smaller government)?
Clearly, I lean towards the latter. If NAR stands for anything beyond naked self-interest, it has to stand for homeownership and private property rights. The hundreds of millions of dollars that NAR spends in lobbying and in advertising REALTORS as defenders of homeownership, of property rights, and of the American Dream don’t mean very much if it’s really all about keeping commission checks nice and fat. If REALTORS are professionals at all (in the old-school definition of professional), it’s because their work involves the public good.
I’m fond of quoting the Preamble to the NAR Code of Ethics to people, because it’s so relevant to so many issues, but it’s particularly appropriate here:
Under all is the land. Upon its wise utilization and widely allocated ownership depend the survival and growth of free institutions and of our civilization. REALTORS® should recognize that the interests of the nation and its citizens require the highest and best use of the land and the widest distribution of land ownership. They require the creation of adequate housing, the building of functioning cities, the development of productive industries and farms, and the preservation of a healthful environment.
Such interests impose obligations beyond those of ordinary commerce. They impose grave social responsibility and a patriotic duty to which REALTORS® should dedicate themselves, and for which they should be diligent in preparing themselves.
If one disagrees with this core vision, this core mission, then he or she cannot be a REALTOR in any meaningful sense of the term.
Let me be clear about something. I’m not suggesting that Lisa or other REALTORS who think that government regulation of AirBnB is justified don’t believe in private property rights. On balance, that might be a small ancillary issue, like a Democrat who thinks maybe prayer in school is OK. This post isn’t about that particular issue.
It is, however, about whether there is any kind of ideological unity amongst the REALTOR population on core issues of private property rights. When NAR takes a position, do they agree with it? When the state and local Associations take a position, do they agree with it?
I ask because a couple of years ago, when the MID and QRM were the big issues in real estate policy circles, I had a chat with a longtime REALTOR about those issues (and others). She essentially said that she disagrees 100% with the Association. She thought MID should go away, because it favors the rich too much. She thought QRM was a great idea because it restrains the big banks. She thought rent control was a great idea because it provided more housing for low income families at the expense of greedy landlords.
I ended up asking her, “So why are you a REALTOR? You disagree with everything that the Association stands for, but your dues dollars are going to fund the lobbying.”
Her answer: “I need the MLS.”
Let’s take a moment of silence, please.
The Coming Choice for Organized Real Estate
It seems to me that REALTOR Associations have a choice.
They can either embrace the fact that they’re really nothing more than retail storefronts for the MLS, and act accordingly, or… they can start acting as if they really believed in their core mission.
REALTOR Associations cannot be and should not be totalitarian organizations where literally every single member believes in the exact same thing all the time. Differences of opinion are natural and desirable. But they cannot be a REALTOR organization that means anything if the vast majority of their members actually disagree with the core central theme. Today, that happens to be private property rights.
The choice, to be really stark about it, is to start finding out where their members stand on the core mission and if there is disagreement there… to start inviting them to disassociate themselves from REALTORS. The Democrats, the GOP, and other political organizations would do the same.
That day isn’t here just yet, but it’s coming and right soon. The leadership of Associations and the AE’s who oversee them need to start thinking about the choice. Ideological unity, or retail storefront for the MLS. The choice is yours.