Yes, I am at a meeting at the REALTORS® Convention at 7:30am, so you know I must think the topic is important.
Jerry Giovaniello, NAR Senior Vice President of Government Affairs and Chief Lobbyist, kicked off the Federal Policy Update for a room full of policy geeks showing a chart on predictions for the upcoming elections stating that we could “change the outcome of these polls almost hourly!” He said we face a perfect storm as our government looks at tax reform, restructuring Fannie Mae and Freddie Mac, and flood insurance.
Donald Trump has been relatively silent with discussing housing issues, and without specific details on what he would do in housing financing reform or to support the housing market. Vijay Yadplati, NAR Senior Policy Representative on Financial Services Issues, stated that it was unlikely that Trump could affect reform because he has personally offended so many Republican leaders in Congress. Vijay ran out of time to say much about Hillary Clinton, but stated she would also face challenges in implementing reform to housing policy in the first two years of her presidency.
Austin Perez, NAR Senior Policy Representative on Environmental Issues, spoke about flood insurance and the heavy lifting we are going to need to to do get the national flood insurance program extended again. At this point, neither house has drafted legislation for the extension, and when we went through this process in 2008 there were major delays. We need to educate congress that a half a million sales a year could be delayed if the program shuts down temporarily. We will push for a long term solution for the federal flood insurance policy and work with FEMA on changes to their policies. We’re also going to the states on the development of private market flood insurance so that consumers have choices and are not only reliant on the federal program.
Evan M. Liddiard, NAR Senior Policy Representative on Federal Tax Reform, started off with a crowd pleaser, stating that talking about taxes before 9am ought to be against the law. The mortgage interest deduction is under threat from three plans under consideration by congressional leadership. While two of these plans do not specifically repeal the mortgage interest rate deduction, they do eliminate many homeowners ability to claim the deduction. The tax benefits of home ownership would evaporate under these plans. Evan’s main point is that we need to beware of tax reform that promises to retain the current deduction for mortgage interest. If tax reform offers much larger standard deduction, particularly when combined with repeal of state and local tax deduction, it is likely to gut the tax benefits of home ownership, even if it does not modify the mortgage interest rate deduction itself.
NAR has hired Price Waterhouse Coopers to provide analysis of each of these plans so that we have independent data to offer in our lobbying efforts as these tax plans go under consideration.