UPDATE 6/2/2017: ASSEMBLY DOES NOT APPROVE AB 71 DUE TO REALTOR OPPOSITION!
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 email@example.com or Rian Barrett firstname.lastname@example.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.
- 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.
- 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.”
- 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
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.