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Daily Real Estate News  |  November 5, 2008  |   Obama Victory: What It Means for Real Estate
With the election of Sen. Barack Obama (D-Ill.) as president of the United States, and gains by Democrats in U.S. House and Senate races, one big questions is on many REALTORSŪ' minds: How will the new government leadership affect the housing industry's ability to move forward with its top legislative goals?

“We’re in a good place,” says 2009 NAR President Charles McMillan. “REALTORSŪ are excited by this historic election and stand ready to work with our new president and the new Congress on issues that are at the heart of the American dream of homeownership.”

The availability of affordable mortgage financing and affordable health insurance top REALTORSŪ’ legislative priority list; more important, those issues are also priorities for both major parties.

“There is no partisan divide when it comes to homeownership, strong communities, affordable health insurance, and strong commercial real estate markets,” McMillan says.

Bipartisan Election Support

NAR provided election support through the REALTORSŪ Political Action Committee (RPAC) to more than 400 candidates, with just slightly more than half of its funds going to Democrats. The small difference in support reflects the larger number of Democrats in the outgoing 110th Congress. “Ours is the most bipartisan PAC in the country,” says RPAC Chair Larry Edwards.

The PAC provided more than $4 million directly to candidates in the general election. Another several million dollars went toward helping about 74 candidates through the NAR Opportunity Race program and a half dozen candidates through the association’s Independent Expenditure program. All told, NAR was expected to spend up to $16 million total in the two-year cycle that ended with the Nov. 4 elections.

In an Opportunity Race, NAR sends educational and get-out-the vote materials in support of an RPAC-backed candidate in the candidate’s district. Independent Expenditures are aimed at the general public and fund radio, TV, and direct mail ads to explain issues of concern to the real estate industry.

REALTORŪ Victories in Congress
  • Rep. Shelley Moore Capito (R-W.Va.). A member of the House Financial Services Committee, Capito was one of REALTORSŪ’ big winners, overcoming a stiff challenge to win a fifth term. Capito has been a strong advocate for NAR-backed small business health insurance coverage and helped pass FHA reform, the first-time homebuyer tax credit, and expansion of homeownership opportunities for U.S. veterans.
  • Jerry McNerney (D-Calif.). This freshman lawmaker who played a key role in Congress to increase conforming loan limits, won decisively in a fiercely contested race. “Rep. McNerney made his mark quickly as a strong advocate for FHA reform, the home buyer tax credit, and expanded homeownership opportunities for veterans,” says NAR Chief Lobbyist Jerry Giovaniello.
  • Rep. Paul Kanjorski (D-Pa.). Kanjorski, who authored legislation to keep banks out of real estate, surprised pundits and pollsters, beating out Republican challenger Lou Barletta, the mayor of Hazleton, Pa. “Rep. Kanjorski has been a courageous leader on our behalf,” says NAR’s McMillan. “We’re proud of our support for him.”

Not all of NAR’s efforts to help REALTORŪ-friendly lawmakers succeeded. Rep. Chris Shays (R-Conn.), a veteran lawmaker on the pivotal House Financial Services Committee, lost a hard-fought campaign. Shays helped pass housing stimulus legislation this year and has been a steady supporter of NAR-backed legislation to keep banks out of real estate.

Shays was defeated by Democrat Jim Himes, a former Goldman Sachs vice president who went on to become an executive with Enterprise Community Partners, a leader in affordable housing and community development.

Expect Renewed Focus on Fannie, Freddie

NAR analysts say REALTORSŪ can expect the Obama Administration and the new Congress to focus first and foremost on regulatory reform of the country’s financial services industry.

Lawmakers will be looking at what went wrong and what needs to change to ensure proper regulation of mortgage- and other asset-backed securities.

A large part of this review will focus on potential changes to secondary mortgage market companies Fannie Mae and Freddie Mac, which are under government conservatorship. Among the options on the table: folding them entirely into the government, making them 100-percent privatized companies, or keeping them as public-private hybrids.

NAR has formed a presidential advisory group (PAG) on the future of Fannie and Freddie, and the association will be weighing in as Congress takes on the issue, NAR analysts say.

Another Stimulus Package in the Works?

Obama and Congress will also likely look at another economic stimulus package, particularly if the outgoing 110th Congress balks at passing new stimulus provisions before the end of 2008.

NAR is pushing for a lame-duck session of Congress to make conforming high-cost loan limits of $729,750 permanent and to eliminate the repayment requirement in the first-time homebuyer tax credit.

NAR also want to see heightened consumer protection with a permanent ban on national banks entering real estate brokerage and management. And it wants to ensure Wall Street banks use some of the $700 billion in rescue funds to make mortgage financing available at reasonable costs.

Health-Insurance Reform on the Way

Looking ahead, Congress is expected to take on comprehensive reform of health insurance, infrastructure investment, and climate change—all issues impacting real estate and the real estate profession. On all of those issues, NAR will move aggressively to help shape the debate.

“We see much opportunity as well as challenge in this new environment,” says McMillan. “But thanks to the success of RPAC and the attraction of our issues in both parties, we are well positioned to ensure the best environment for real estate.”

—Robert Freedman

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