Political divide
What happens when Realtors, developers, homebuilders, mayors and even landscape architects join the budget and tax debates?
When even the real estate news desk is besieged by news releases about Big Political Issues — as opposed to the usual local zoning squabbles, property tax complaints and neighborhood NIMBY protests (“Not in My Back Yard”) — times are interesting indeed.
Here are just a few, each deserving attention, even though except for sometimes following state legislation affecting real estate or construction as a business, I defer to political reporters.
Mayor Mick Cornett, on the national stage as president of the U.S. Conference of Mayors, came out swinging in favor of Community Development Block Grants, which President Donald Trump wants to eliminate. Landscape architects even got into the act, which you’ll see below.
But first, a state issue that could literally hit close to home, from a joint release by the Oklahoma Association of Realtors and the Oklahoma State Home Builders Association, the first such joint statement in my memory.
The governor has had the bully pulpit to promote her sales tax plan to deal with the state budget deficit. Here’s what the Realtors and builders think:
“Oklahoma Association of Realtors and Oklahoma State Home Builders Association recently announced opposition to Gov. Mary Fallin’s proposed sales tax plan to address the state’s nearly $900 million budget deficit, including proposed sales tax on services related to home ownership.
“A recent SoonerPoll Quarterly Poll of the state’s likely voters revealed that an overwhelming 93 percent oppose a sales tax on services related to the purchase of a new home, while 78 percent oppose a sales tax on home remodel-related services and industries such as plumbing and heating and air conditioning.
“‘While we are sensitive to the state’s budget crisis and need for funding, we are also concerned that taxes related to the real estate industry would have an extremely negative effect on home ownership, Oklahoma’s real estate industry and the state’s overall economy,’ said Pete Galbraith, Oklahoma Association of Realtors president. ‘Almost half of the $930 million revenue generated from the proposed plan would come from the real estate industry. The cost of everyday necessities such as utilities, water, sewer and electricity would increase by nearly 5 percent, killing the dream of home ownership for many.’
“Gov. Fallin’s plan proposes roughly $1 billion in new sales taxes on 164 services to address the state’s budget shortfall without cutting state spending further. The governor contends the state’s economy has become more service-oriented and that state revenues cannot solely survive on taxing products only. The proposed taxes both directly and indirectly touch Oklahoma’s real estate industry, including financial institutions and fees associated with closing costs, title insurance services, professional real estate services, lawn care and services related to new home construction.
“‘This proposal would have an incredible chilling effect on the homebuilding industry,’ said Dan Reeves, president of the Oklahoma State Home Builders Association. ‘From our analysis, this would be an almost 10 percent cost increase to the building of homes. This increase is not readily absorbed by the market and decreases the affordability of homes. Previous studies have shown that for every $1,000 increase in cost, 660 families are priced out of the market.’ ”
“According to SoonerPoll, even when voters were told increased revenues would better fund government services and eliminate the sales tax on groceries, voters still overwhelmingly opposed real estate-related sales taxes by nearly 75 percent. Not a single demographical subset found the proposed new sales taxes on home remodel or ownership remotely attractive.
“‘Our industry was hit hard by the housing financial recession, hit again by the downturn in the oil and gas industry, and I am afraid this proposal would be such a crippling blow to the industry that many builders would be driven from the business,’ Reeves said.”
Mayors revolt
President Trump has taken the bully pulpit to new heights, or lows, depending on your views. The nation’s mayors gave him the opposite of a chorus of amens. Here’s what they said:
“The U.S. Conference of Mayors (USCM) today pushed back on Administration’s initial ‘skinny’ budget proposal for Fiscal Year 2018. The document, entitled ‘America First: A Budget Blueprint to Make America Great Again,’ proposes deep cuts in funding for many local programs, and eliminates the Community Development Block Grant (CDBG) program, which impacts every community in the country.
“The Community Development Block Grant program is the most flexible stream of federal dollars allocated to cities. Since the start of the program in 1974, it has been used for broad purposes ranging from affordable housing development and lead-paint abatement, to services for seniors and people with disabilities, as well as dental care for low-income children. For every $1.00 of CDBG investment, another $3.65 in private and public dollars is leveraged.
“Regarding the proposed elimination of the CDBG program, U.S. Conference of Mayors President Oklahoma City Mayor Mick Cornett said, ‘Community Development Block Grants are the only federal funding source that gives city leaders some discretion in how the money is spent, and mayors have used them to leverage private investment, create affordable housing, spur economic development, rebuild infrastructure and provide services that strengthen metro areas. America’s mayors will continue to work with our many champions in both the House and Senate to ensure that critically needed tools like CDBG funds and the HOME Investment Partnership are fully funded.’ ...
“Said Conference CEO and Executive Director Tom Cochran: ‘Unfortunately, many persons living in our cities, small, medium and large, in our suburbs, and in our rural areas, will be severely hurt if Congress allows these proposals to stand. Mayors stand for all. This is the first day of this battle to truly put our people first. Together, with our allies representing the public interest and the needs of the people, we will demand Congressional action against the ill-advised proposals contained in the Administration’s budget.’ ”
Landscapers lambaste
Landscape architects think the president’s budget proposal hits below the greenbelt. Here’s what they said:
“The American Society of Landscape Architects (ASLA) released this statement in response to President Trump’s 2018 budget proposal:
“We are disappointed with President Trump’s budget blueprint, which calls for dramatic cuts to many of the federal programs and resources for strengthening our nation’s infrastructure and economic development.
“President Trump’s recommendation to completely eliminate two critical community development programs, the Community Development Block Grant (CDBG) program and the Transportation Infrastructure Generating Economic Recovery (TIGER) grants program, is shortsighted. TIGER has been one of the most successful and popular programs with lawmakers, communities and transportation planners like landscape architects, with the number of applications far exceeding the amount of available funding.
“ASLA is also extremely concerned that President Trump’s proposal would drastically reduce funding for the Environmental Protection Agency (EPA) by a staggering 31 percent, thereby severely crippling key air and water quality programs and critical climate change research and resources . ...
“We understand that this proposal is the start of a long legislative process. The Society will continue to work with legislators to ensure that funding is available for sound infrastructure solutions that American communities are demanding.” And that’s some of the
real estate news of our
time.