April 12th Watchdog Report


There are three elements of our government affairs program that form the foundation of how Realtors, and their association, engage in the political and public policy process.  In fact, I have spoken in the last few weeks to agency sales meetings about how our program works.

There are three key elements of a government affairs program:

  1. Understand how government affairs affects your business.
  2. Know how your association represents you.
  3. Learn how you can help.

At your association’s leadership retreat earlier this year, we identified a key objective for our government affairs program: address the lack of inventory, particularly housing.  What we are focused on now is understanding how governmental action is affecting inventory.  There are two ways government affects inventory:

  1. Restricting supply by not approving new developments or putting a pause on them through actions like a moratorium.
  2. Increasing the cost of homes and other projects through excessive regulation. 

Both have the effect of reducing supply and pricing out potential buyers.

The National Association of Home Builders produces a report each year called the Priced-Out Effect.  It measures the number of households priced out of homeownership by a $1,000 increase in the cost of a new home.  The analysis uses three factors:

  1. The price of a home
  2. Median Household Income
  3. Mortgage Interest Rates

The current priced-out effect number for the Greenville/Anderson/Easley MSA is 414 (414 families are priced out by a $1,000 increase in the price of a home).  But that does not tell the whole story.  Because once a family is priced out, they remain priced out unless one of the three factors changes (interest rates fall for example).  In the Greenville/Anderson/Easley MSA, 68.5 percent of households are already priced out.  Yes, less than 1/3 of all households can afford a new home!

There is another study, also by the National Association of Home Builders, that estimates that almost 30% of the cost of a new home is compliance with government regulations.  And the National Apartment Association estimates that 40% of monthly rent in a new apartment is compliance with government regulation.

Government is a significant contributor to the supply problem in housing.  And government has a similar impact on commercial and industrial development as well.

Over the next two Watchdog Reports, I will write about what your association is doing to represent you, and how you can help.  But there is one important way that you can help today: Contribute to RPAC.  It’s easy.  Your association includes a voluntary contribution to RPAC on your annual dues invoice.  Pay it, and you are an RPAC supporter.  If you haven’t supported RPAC this year, I encourage you to do so by clicking here

Michael Dey, Director of Government Affairs