Obama Victory: What It Means for Real Estate

REALTORS® put housing, health care up front.

December 1, 2008

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 question is likely to be on many real estate practitioners’ minds: How will the housing industry’s top legislative goals be affected?

"We’re in a good place," says 2009 NAR President Charles McMillan. "REALTORS® 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 REALTORS®’ legislative priority list, and 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 support through the REALTORS® Political Action Committee to more than 400 candidates, and, in the hours following the election, NAR policy analysts were predicting victories in more than 90 percent of those races. Slightly more than half of RPAC funds went to Democrats, reflecting 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 74 candidates through the NAR Opportunity Race program and a half-dozen candidates through the association’s Independent Expenditure program. All told, NAR spent an estimated $16 million 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.

Among NAR-supported winners were:

  • Rep. Shelley Moore Capito (R-W.Va.). A member of the House Financial Services Committee, 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.
  • Rep. Jerry McNerney (D-Calif.). The freshman lawmaker played a key role this year to increase conforming loan limits. "Rep. McNerney made his mark quickly as a strong advocate for FHA reform, the homebuyer tax credit, and expanded homeownership opportunities for veterans," says NAR Chief Lobbyist Jerry Giovaniello.
  • Rep. Paul Kanjorski (D-Pa.). Kanjorski has been a long-time supporter of NAR’s effort to keep banks out of real estate and, in fact, authored the Community Choice in Real Estate legislation.

Not all of NAR’s efforts to help 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 on keeping banks out of real estate. Shays was defeated by Democrat Jim Himes.

Expect Focus on Fannie, Freddie 

NAR analysts say REALTORS® 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.

The association has formed a presidential advisory group to weigh in on those changes. Among the options: folding the companies into the government, making them 100 percent private companies, or keeping them as public-private hybrids.

Another Stimulus Package Coming?

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.

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."

Goodbye to Phil Smaby, 1976 NAR president

The NATIONAL ASSOCIATION OF REALTORS® mourns the loss of 1976 President Philip Smaby, who died Tuesday, Oct. 21, at his home in Minneapolis. He was 90.

As NAR president during the United States’ bicentennial, Smaby had the honor of presenting an original painting of Uncle Sam to President Gerald Ford. The painting is on display at the Smithsonian Institution.

Smaby, a partner in Bermel-Smaby Realty, was president of the Minneapolis and Minnesota Associations of REALTORS®, a three-term treasurer of NAR, and president of the National Institute of Real Estate Brokers (precursor to the Council of Residential Brokerage Managers and Council of Residential Specialists).

"One of the things Dad said to me many, many times," says John Smaby, who is with Edina Realty in Minneapolis and served as a 2005 NAR regional vice president, "is that his service to the REALTOR® organization and the people he met along the way gave him great happiness."

Robert Freedman

Robert Freedman is the former director of multimedia communications at NAR.