C.A.R. is OPPOSING SB 231 (Hertzberg), a bill that allows local governments to circumvent the State Constitution and Proposition 218 to tax property owners directly for costs related to stormwater infrastructure projects without the legally required voter approval. C.A.R opposes SB 231 because it uses legal “sleight of hand” to allow local governments to impose new taxes without required voter input. The bill will be considered by the ENTIRE Assembly as soon as Monday, June 19th.

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This is a brief update on AB 71 (Chiu), a bill C.A.R. has been OPPOSING that eliminates the mortgage interest deduction on second homes. C.A.R. opposes any attempt to limit or alter the mortgage interest deduction.

In advance of a possible floor vote in the Assembly, C.A.R. issued a series of Red Alerts, asking REALTORS® in targeted legislative districts to call their Assembly Member to urge them to vote “NO” on the bill. Others were asked to help spread the word on social media. And Key Contacts – our first-line volunteers who work day-in, day-out with legislators with whom them have a personal relationship – worked to educate the legislators and their staff about the MID and the need to preserve it.

It worked! In just two days, over 1,600 calls were placed, over 400 Tweets were posted using our hashtag #NoAB71, and countless others posted on Facebook. And, in many cases, Key Contacts were able to confirm their legislator’s opposition to the bill.

AB 71 has been eligible to be voted on by the entire Assembly since Wednesday and last night the Assembly adjourned until next week without taking action on the bill, presumably because the bill did not have the support necessary to pass it. This is thanks almost entirely to all of the REALTORS®– the only large political organization opposing AB 71 — who called their legislators and still more, including local association staff, who helped spread the word.

Because AB 71 has an “urgency” clause, it can still be voted on any time before the end of session in early September. And we will be asking some of you to reinforce your legislator’s opposition to the bill by sending emails or posting to social media. Be looking for that Red Alert early next week.

Thank you to everyone who took action on this bill so quickly. It really does take an army – a REALTOR® army!

For more information:

Contact DeAnn Kerr deannk@car.org or Rian Barrett rianb@car.org

(The Original blog post is below)

SCCAOR and C.A.R. are OPPOSING UNLESS AMENDED AB 71 (Chiu), a bill that would eliminate the mortgage interest deduction for second homes to fund an increase in low-income housing tax credits. While C.A.R. supports increasing the amount of tax credits available for low-income housing, the association is opposed to doing so at the expense of the mortgage interest deduction for second homes. AB 71 will be voted on by the entire Assembly as soon as  Wednesday, May 31st.

Action Items

  1. Urge your Assembly Member to Vote NO on AB 71 by calling 1-800-798-6593. Then enter your NRDS ID (or the Red Alert PIN number in the chart below) followed by the # sign to be connected to your legislator’s office.
  2. When staff answers the phone, you can use the following script:  “Hi, this is <insert your name>. I’m a constituent and a REALTOR®. Please ask the Assembly Member to Vote No on AB 71.
  3. Use Twitter to tweet the following with the appropriate legislators twitter name inserted from below: Govt shouldn’t change the rules. <insert handle>, please protect the MID.  #NoAB71
Assembly Member PIN Number Twitter Handle
Kansen Chu 3505 @kansenchu
Ash Kalra 2857 @Ash_Kalra
Evan Low 1152 @Evan_Low
Anna Caballero 2163 @AMCab2


Background and Talking Points

  • C.A.R. supports increasing the amount of tax credits available for low-income housing, we are opposed to doing so at the expense of the mortgage interest deduction for second homes.
  • AB 71 (Chiu) would eliminate the mortgage interest deduction (MID) for second homes to fund an increase in low-income housing tax credits. If the MID were eliminated for second homes, 2,152 home sales would be lost in the first year after implementation. The potential impact of the MID elimination is an economic loss of $180.2 million to the state of California in the year following the implementation.
  •  C.A.R. opposes changing the mortgage interest deduction because:
    • The state shouldn’t change the rules after the fact. People made significant financial decisions, trusting that the mortgage interest deduction would be there to make the property affordable The MID is already capped. The amount of the mortgage interest deduction is already capped regardless of whether the taxpayer has one home or two homes.  It’s not right for government to dictate to homeowners how they can allocate their housing dollars
    • Second homes are not necessarily “vacation homes.”  Someone faced with a one-way commute of an hour or more may choose to purchase a small condo near where they work in which to live during the workweek.
    • Local economies and communities will suffer. The economic health of the recreational areas of the state will be harmed by the elimination of the mortgage interest deduction on second homes. Homeowners in those areas of the state are going to be hard pressed to find a buyer if the mortgage interest deduction on second homes is eliminated.
    • Using the MID as a piggybank sets a dangerous precedent.

To learn more about this issue, visit www.SaveYourMID.org.  You can also contact DeAnn Kerr (deannk@car.org) or Rian Barrett (rianb@car.org) with any questions.

On behalf of current and future home and property owners throughout the country, SCCAOR members attended the National Association of REALTORS® Annual Legislative meetings in Washington D.C. They were joined by more than 9,600 REALTORS® from across the country with the aim to advance key real estate issues during the 2017 REALTOR® Legislative Meetings & Trade Expo.

Led by 2017 President Rick Smith and 2017 President-Elect Kevin Cole, the SCCAOR Leadership team joined fellow REALTORS® from California and across the nation to attend meetings and informational sessions. They also met with regulatory agency staff and lawmakers on Capitol Hill to discuss and advocate for real estate issues affecting their businesses, communities, and clients.

At the legislative-focused meetings, REALTORS® focused on several significant issues affecting the industry, such as flood insurance, tax reform, and sustainable homeownership.

Rick Smith (2017 SCCAOR President) and Kevin Cole (2017 SCCAOR President-Elect) with Rep. Ro Khanna

“REALTORS® are critical advocates for the real estate industry and for their clients, and this trip allowed us to educate our lawmakers that the wrong type of tax reform could cost homeowners hundreds or thousands of dollars more in taxes annually,” said Rick Smith.

SCCAOR members met with three members of Congress that represent parts of Santa Clara County: Rep. Ro Khanna, Rep. Zoe Lofgren and Rep. Anna Eshoo.

“We discussed important regulatory issues like proper oversight of PACE loans that impact home buyers and sellers in California,” said Kevin Cole.

Additionally, REALTORS® urged for the protection of sustainable homeownership by advocating for responsible reform of the secondary mortgage market, prohibiting the use of guarantee fees for any purposes other than credit-risk management, improving consumer protections for energy-efficiency improvement loans, and tax reform. CAR Treasurer-Elect and SCCAOR member Dave Walsh is the Key Contact for Rep. Zoe Lofgren and he led the meeting where she agreed that we should have tax policies that encourage homeownership and not punish it.

SCCAOR Members meeting with Rep. Anna G. Eshoo

One of the main issues discussed with Congressman Ro Khanna was the urgent need to pass a multiyear reauthorization of the National Flood Insurance Program before it expires on September 30. Khanna agreed that we needed to renew the flood insurance program without lapsing.

We appreciate the time and thoughtful feedback on our positions from all our members of Congress, which made this another successful trip to Washington D.C. representing all our REALTOR® members. For a full list of the issues that we discussed with our legislators, please visit the NAR Website

The Santa Clara County Association of REALTORS® once again made a strong showing in Sacramento this year during C.A.R.’s Legislative Day on May 3rd. With over 60 local members in attendance joining over 2,500 REALTOR® members from across the state.
Those in attendance heard from Governor Jerry Brown on how REALTORS® are critical to not only advocating at the state level, but on the ground in communities across California to ensure that home ownership housing opportunity is at the top of the local agendas.
SCCAOR, SILVAR and SAMCAR members then held a joint luncheon with a special guest speaker Assemblymember Marc Steinorth who talked about his efforts to create homeowner savings accounts with this bill AB 1736, which allows first-time homebuyers to annually deduct the amount deposited in the account from their state taxes, up to $10,000 per year for individuals, and up to $20,000 for couples.
After the luncheon SCCAOR members met with Assemblymember Ash Kalra, Assemblymember Evan Low, Assemblymember Kansen Chu, and State Senator Jim Beall to discuss the biggest issues facing the real estate industry in California.

The legislation we discussed was C.A.R’s opposition to AB 1059, which would ban dual agency in commercial transactions. We also opposed SB 640 which would lay the foundation of creating a service tax in California which would not only harm REALTORS®, but also the homebuyers that would pay the tax. Finally, we addressed a myriad of bills that would increase housing supply to address affordability and availability of housing in California. AB 1059 and SB 640 are now effectively two-year bills and will not be moving forward during 2017.

Later in the week, the Board of Directors for C.A.R. sponsored additional legislation that addresses ways of creating more housing opportunity. A summary of action items from the board meetings can be found on the C.A.R. website.
You can view more photos from Legislative Day on our Facebook album.