On February 7th, the NAR held their first annual Policy Forum at the Grand Hyatt in Washington, DC. This forum included dozens of industry stakeholders and hundreds of invested attendees who want to be a part of the reform that Congress and the Federal Housing Finance Agency (FHFA) are proposing for government sponsored enterprises. Two of these GSEs, Federal National Mortgage Association (Fannie Mae) and Federal Home Loan Mortgage Corporation (Freddie Mac), are extremely important players in the housing and tax industry. They were created in order to improve the flow of credit in the housing market, while also reducing the cost of that credit. NAR’s proposal was presented at this forum by co-authors Richard Cooperstein, head of Risk Management at Andrew Davison and Company and Susan Wachter, Professor of Real Estate and Finance at the University of Pennsylvania.

The Internal Revenue Service, along with the National Treasury, ruled in mid-January that they would allow real estate professionals to benefit from the Section 199A 20 percent pass-through deduction. It had been unclear to real estate professionals what the 2017 Tax Cuts and Jobs Act would do for them come tax season, but after the ruling on January 18th, the IRS and the Treasury issued final regulations regarding the new 20 percent deduction on qualified business income. NAR had expressed concerns through ongoing discussions with the IRS and the Treasury, and they were heard.

At C.A.R. last month, many potential and existing issues were discussed and what it means to the REALTOR® community. REALTORS® are preparing for possible policy regarding requiring electrification of housing. Since 2006, California has adopted aggressive and far-reaching goals regarding greenhouse gas emissions and how to drastically reduce them. The goal for entire electrification of housing seems to be 2045. At the January C.A.R. Board of Directors Meetings, Directors voted to oppose any legislation requiring electrification of existing housing.

Flooded road

An exciting win for home sales as Federal Emergency Management Agency (FEMA) had reversed their original ruling a few days later to discontinue the National Flood Insurance Program (NFIP) as the government continued to be shut down. Last month FEMA made a surprise ruling which disallowed new and renewal flood insurance policies during the government shutdown, despite Congress having already voted to renew the flood insurance policies as they have done during past shutdowns. This had potential to be detrimental across the nation, and specifically in the Sacramento area, where approximately 121,000 homeowners are encouraged or required to have flood insurance for their homes. When selling and buying homes, any home in a flood zone is required to have flood insurance in order to get a mortgage or to close on said home, and without policies available by the NFIP, no buying or selling in flood zones could have been possible during this shutdown.

Despite Prop 10 failing this November, leaving the Costa-Hawkins Rental Housing Act to stay, the fight to prevent rent control in Sacramento remains. Rent control continues to be an active topic of discussion and possible policy to be voted on in 2020, as the Service Employees International Union (SEIU) has drafted an initiative establishing rent control in Sacramento. This proposal would create an elected Rent Stabilization Board with no limit on the amount of money those elected can earn on said board and no limit on campaign contributions they can accept during their campaigning for these positions.

Their primary purpose would be to oversee that this measure be properly implemented, as well as establish regulations and determine allowable annual rent adjustment. However, the first rent board will set unlimited fees on landlords in order to fund the board’s operating expenses.

The Mayor of Sacramento, Darrell Steinberg, and Mayor of West Sacramento, Christopher Cabaldon, have teamed up and formed the Mayor’s Commission on Climate Change. This commission was created to develop common goals and strategies for both cities to reduce greenhouse gas emissions and to make suggestions as to what they would like to see in terms of environmental policy in the near future. Their overall goal is to reach Carbon Zero, or zero carbon emissions, by 2045.

Staff Liaison

Carter Nelson
Public Affairs Assistant