Hello REALTORS®,
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:
- Understand how government affairs affects your business.
- Know how your association represents you.
- 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:
- Restricting supply by not approving new developments or putting a pause on them through actions like a moratorium.
- 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:
- The price of a home
- Median Household Income
- 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