Hello REALTORS®,
I am about to finish my third year as your Director of Government Affairs. I have been reflecting on some of the trends and challenges your association’s government affairs team has faced, and I keep returning to one theme: housing. More precisely, the disconnect between our local governments’ housing and economic development policies.
The economic development policies have resulted in commercial and industrial development in rural areas, which has created market incentives for housing to follow that development. But our housing policies discourage housing development in rural areas.
That disconnect has led to strong opposition to new housing. It’s called NIMBYism, or Not in My Backyard, but it has become so much more than the immediate neighbors of a specific development. An entire ecosphere has emerged around NIMBYism including apps, social media groups, advocacy groups, and campaigns. NIMBYism is pushed for by groups with names like “save our…”. It’s pushed against by groups like Yes in My Backyard (YIMBY). Even your Association of REALTORS® has been a part of the debate.
I have made several presentations on the disconnect between housing and economic development that has helped drive NIMBYism.
So, what is the disconnect, why is it driving NIMBYism, and why is it important to Realtors?
The disconnect between housing and economic development
In a recent presentation to Realtors, which you can read by clicking here, I start with the simple premise that economic development creates jobs, but in a region with low unemployment, filling those jobs results in people relocating to our region to take those jobs. Those people bring families with them and they need a place to live.
The problem with the economic development policies is two-fold:
- Even though the new jobs pay attractive wages—$50,000 per year on the low end—those wages still only provide for modest housing.
- The areas where those new businesses are locating are often rural.
And that’s where the disconnect happens. One of the primary considerations of a family locating to our area is the proximity of their home to their jobs. But their jobs are often at businesses that have located in rural areas. Their wages, while good on paper, still mean they are looking for modest housing like townhomes and apartments. Those housing types don’t fit well in the rural locations where their jobs are located. And yet, homebuilders will still try to meet the demand.
This disconnect was even the subject of a session at NAR’s government affairs conference last summer. Two economic development professionals, from Charleston and Raleigh, talked about how housing affordability, and lack of housing inventory, has been affecting their recruitment efforts. Some businesses, looking to locate in their cities, have chosen other places because of a lack of affordable housing.
Their solution? The Realtors Association should do more to advocate for housing. What that said to me is no one knows what to do about it, and very few people understand the problem.
Why do our local government leaders allow this policy disconnect?
There is a key issue at play here: business and industry pay more in taxes than housing. If we want our leaders to run our government like a business, they are going to prioritize the types of development that yield more tax revenue, and housing doesn’t pay the highest taxes, commercial and industrial pay the highest taxes.
There are two problems with this:
- Businesses need an adequate supply of housing to support their employees and provide customers.
- Our government is not a business, it serves our collective needs like water, sewer, public safety, emergency services, and education.
But our government is led by imperfect people, they represent imperfect people, and imperfect people make imperfect decisions.
The consequences
The consequences should be easy to predict. Development is happening where it shouldn’t. At first, it was just the neighbors opposing those developments. But over time, with a little help from technology, neighborhood opposition has become community opposition.
The result is that our local economy is flourishing, we’ve created a lot of new jobs, and our population is growing. But a key component of the infrastructure we need to support that growth—housing—hasn’t kept up.
The housing that is being built is more expensive. And the housing that is already here is in higher demand because of a principle we were taught in high school: the law of supply and demand. In this case, the supply is housing, which is low. The demand is high, driven by a growing population seeking new jobs. The result is higher housing prices—a lot higher.
What can we do
Several of our local governments have enacted new housing development regulations and zoning codes in response to NIMBY pressure. Unfortunately, those ordinances only further restrict the supply of housing, making the affordability problem worse. And several more local governments are working on new ordinances now.
Realtors are in a unique position to be advocates to help solve this problem. The solution starts with understanding the problem and educating others about it. To help you with that, you can read the presentation I made to a group of Realtors earlier this year—click here.
RPAC is Important
If real estate is your profession, advocacy is your business. And these advocacy results highlight the importance of supporting your association’s advocacy program. RPAC is an important element of that advocacy program.
About one-third of our members support RPAC, including some who do more—a lot more.
This week, I want to highlight the members who have done a lot more over a long period of time: the Western Upstate Association of REALTORS® members who have been inducted into NAR’s RPAC Hall of Fame.
- Don Cleveland, BuyHartwellLake, LLC
- Rusty Garrett, BHHS C. Dan Joyner
- Lorraine Harding, Lorraine Harding Real Estate
- Andy Lee, Lake Keowee Real Estate
- Carolann Newton, Jackson Stanley REALTORS
- Francine Powers, Southern Real Estate Development
- Justin Winter, Winter Sothesby’s International Realty
I encourage all Realtors to support RPAC, and we make it easy to do so. We include a voluntary $25 RPAC contribution ($100 for brokers) on your annual dues renewal. Simply pay it and you have supported RPAC. If you want to do more, that’s easy too.
Michael Dey, Director of Government Affairs