On Wednesday, over 40 SILVAR members joined hundreds of REALTORS® from across the state in Sacramento for Legislative Day, the time of year when California REALTORS® personally meet with their legislators and discuss issues affecting the industry, their clients and their business. REALTORS® make up the largest group to visit Sacramento each year and speak to their local state Assembly and Senate representatives.

Highlights of the California Association of REALTORS® morning briefing at the Sacramento Convention Center included welcome remarks by C.A.R. President Don Faught and other C.A.R. officers, and a special address by Governor Jerry Brown, who noted the importance of REALTORS® and what they do.

“You are in an important place. We have to work with you because you are so powerful,” exclaimed Brown. “We’re all working to make California a great place.”

The governor told REALTORS® that California “is on the move. Great opportunities are happening in Silicon Valley, Orange County … in manufacturing, warehousing, technology. Housing is coming back. We have got to continue.”

C.A.R. Chief Lobbyist Alex Creel briefed REALTORS® on hot issues and important points they needed to convey to their political representatives. They included:
Vote Yes to SB 30 (Calderon) and AB 42 (Perea) – Short Sale Debt Forgiveness. These bills would conform California law to federal tax law, making clear that debt forgiven in a short sale is not income. These bills were placed on “suspense files” because they are deemed to cost a certain threshold and are to be eventually considered once the state budget has passed. In the meantime, families are stuck in limbo because those currently in short sale escrows can’t finalize these transactions without the fear of potentially incurring state tax liability. Sellers need to know now that the debt forgiven is not going to be treated as income for state tax purposes. REALTORS® told their representatives that the state law needs to conform to the federal tax law passed on debt forgiveness. It’s the right thing to do and taxpayers “shouldn’t be held in suspense.”

Vote No to AB 905 (Ting) – Private Transfer “Tax.” This measure seeks to create a private transfer tax to fund environmental improvements to a property and forces a financial burden on future owners of property with no oversight, no accountability, and no limit on how long the tax can be imposed, even years after the improvement has been paid for or the useful life of the improvement has been exhausted. REALTORS® explained there is no connection between the fee and the actual cost of the improvement, no oversight on the entities receiving the funds, no “cap” on the collection or the duration of the fee. Also, the Federal Housing Finance Agency (FHFA) has already adopted regulations restricting the imposition of private transfer taxes.

Vote No to AB 1164 (Lowenthal) – Wage Liens on Property. This bill creates a super-lien for wage claim disputes. Under existing law, trades people and others who work to improve a property have the right to record a mechanics lien against the property for payment for that work. An employee who has a wage dispute can do the same with an employer. This measure seeks to expand the mechanics lien concept so an employee may record a lien against any property owned by the employer, even property that has no connection to the dispute. REALTORS® explained to legislators that legal remedies for wage disputes already exist. This measure denies property owners due process since the lien can be filed without notice or opportunity to contest the claim; the lien would increase the cost of loans and reduce the availability of lending options for borrowers; and the lien would allow an employee’s wages dispute to cloud title on all property owned by the owner.

Vote No on AB 1229 (Atkins) – Rent Control. This measure would dramatically weaken the rent control limitations contained in the landmark “Costa-Hawkins” law sponsored by C.A.R. in 1995. Under this existing law, new construction of rental units is not subject to local rent control ordinances. This measure seeks to use inclusionary zoning to allow local governments to create zones in which certain mandates are placed on builders. In this case, the mandate would be to set aside a certain percentage of units at below-market rent levels. REALTORS® told legislators this measure would discourage the creation of new rental housing at a time when it is most needed. The legislature has repeatedly made it clear its opposition to expanding rent control to new construction.