CONTENTS
SEPTEMBER | OCTOBER 2020
The Power of One: Each Vote Matters In this issue of OC REALTOR®, the focus is on REALTOR®
SAFETY because September is REALTOR® Safety Month and on ELECTION 2020 because November 3 is Election Day. On its pages, you will find information about how to show property safely and how to choose activities wisely during the COVID-19 pandemic.
Also, you will be relieved to learn that this year, because of the pandemic, your ballot will be mailed to you so that you can vote without leaving home. All you need to do is mark and sign your ballot and mail it back in the returnpostage-prepaid envelope or drop it in an official ballot drop box.
36
Split-Roll Initiative Will Not Deliver Promised Tax Revenues
Cover Story: Election 2020
29
Two County Assessors from different political parties agree that implementation costs will absorb any revenue increase for at least three years.
Why You Should Care—and Vote!
How Do You Vote Safely During a Pandemic? Michelle McCann explains that, this year, ballots will be mailed to every active, registered voter, and you can vote either in person or at home.
32
Election Calendar
In an article titled “Just Waiting,” Steven Thomas explains why, even in a red-hot housing market, not every seller finds success.
President’s Message
8
Stronger Together Danielle Corliss describes some of the remarkable ways in which Orange County REALTORS® has helped its members adapt and stay in touch during this pandemic.
DRE Update
10
The DRE Makes Its Advertising Guidelines Available in Booklet Form Commissioner Doug McCauley introduces a new publication to help REALTORS® ensure that their messages are “clear and truthful—and of value and benefit to customers.”
33
Will the Voters Freeze New Housing Development in November? Pacific Legal Foundation’s James Burling says that reimposing rent control would have a disastrous effect on the housing supply.
4
SEPTEMBER | OCTOBER 2020
18
The Orange County Housing Update
Elected officials at all levels make decisions that affect your home, your business, your taxes, and your quality of life, so choose wisely.
31
Features
OC REALTOR®
22
Every Month Should Be Fair Housing Month
Grosse Point Board of REALTORS® CEO Bob Taylor asserts that April is not enough and that fair housing should be a requirement for Local Associations through Core Standards.
38
REALTOR® SAFETY: Safety in a Time of Pandemic Sherri Butterfield tells you how to wear your mask for maximum protection and which common activities pose the greatest risk of COVID-19 infection.
41
REALTOR® SAFETY: Some Steps for Showing Property Safely Marissa Hughes reminds you to stock up on protective equipment, post the Rules for Entry, and have the Property Entry and Advisory Declaration signed.
CONTENTS
Departments
12
Names in the News
26
Education Central: Upcoming Classes by Track
On the Cover
46
Featured on the cover is a design created by Ivan Salmeron to illustrate the importance of a single vote and to remind readers to cast their ballots.
Affiliates in Action: New REALTOR® Orientation in July
47 Mentions
facebook.com/theocrealtors twitter.com/the_ocrealtors instagram.com/theocrealtors
Follow us on social media Online Magazine Love the Orange County REALTOR®? Did you know that you can read it online, anytime? Read past issues at www.ocrealtors.org/magazine.
Mission Statement ORANGE COUNTY
REALTOR® MAGAZINE
25552 La Paz Road Laguna Hills, CA 92653
10540 Talbert Avenue, Ste. 225 West Fountain Valley, CA 92708
949-586-6800
714-375-9313
www.ocrealtors.org
2020 OFFICERS Danielle Corliss President Lori Namazi President-Elect Bob Wolff Treasurer Matt Clements Immediate Past President Dave Stefanides Chief Executive Officer
2020 BOARD OF DIRECTORS Olesya Drozdova Joyce Endo Dorinda Francois Michele Harrington Bob Hartman Tim Hayden Len Herman Julie Hile Jeff Jackson Debbie Krumboltz
Sherrie LeVan Liz Lewis Chip McAllister Charleen Nagata-Newhouse Joe Pierce Lacy Robertson Adam Rodell Lisa Schulz Jessica Siguenza Scott White
MAGAZINE STAFF Sabrina Blair
Breanna Reed
Sherri Butterfield
Ivan Salmeron
Director of Communications sabrina@ocrealtors.org Communications Specialist sherri@ocrealtors.org
6
Accounting Administrator breanna@ocrealtors.org Print & Marketing Specialist ivan@ocrealtors.org
SEPTEMBER | OCTOBER 2020
OC REALTOR®
The mission of the OC REALTORS® is to promote the REALTOR® Code of Ethics; to provide education, services, and resources to our members; and to advocate the protection of real property rights.
Notice to All Members It is the long-established policy of this Association, the California Association of REALTORS®, and the National Association of REALTORS® to adhere to both the letter and spirit of the federal and state antitrust laws. For their own protection, members should be aware of the antitrust laws as they affect their specific business activities. Any illegal activity under the state and federal antitrust laws is not in compliance with Association policy, nor is it in the interests of the Association or its members. Participation in Association activities must occur only in harmony with these very important laws. Federal law prohibits discrimination based on race, color, sex, religion, or national origin in connection with the sale or rental of residential real estate, in advertising the sale or rental of housing, in the financing of housing, and the provision of real estate brokerage services. The Orange County REALTOR® editor reserves the right to review and edit all submissions. Orange County REALTORS® makes no warranties and assumes no responsibility for the accuracy of the information contained herein. The opinions expressed in articles are not necessarily the opinions of the Orange County REALTORS®. Orange County REALTORS® does not necessarily endorse the companies, products, or services advertised in this magazine unless specifically stated. The OC REALTOR® (USPS 025-445, ISSN 1945-2179) Volume 11, Issue 5, is published by the Orange County REALTORS®, 25552 La Paz Road, Laguna Hills, CA 92653. Periodicals postage paid at Laguna Beach, CA, and additional mailing offices. POSTMASTER: Send address changes to Orange County REALTORS®, 25552 La Paz Road, Laguna Hills, CA 92653-5127. Annual membership dues include $3.13 for a one-year (6 issues) subscription to the OC REALTOR® magazine. OC REALTOR® cannot be responsible for unsolicited materials. Publisher: Orange County REALTORS® Printer: The Monaco Group
PRESIDENT’S MESSAGE
STRONGER TOGETHER During this COVID-19 pandemic, Orange County REALTORS® is helping members do the essential business of real estate effectively despite social-distancing requirements. By Danielle Corliss 2020 PRESIDENT, ORANGE COUNTY REALTORS® The year 2020 has not been what anyone expected! The change began last year, on December 21, when China informed the World Health Organization (WHO) about a suspicious cluster of pneumonia cases in the city of Wuhan. One week later, a new type of coronavirus was identified as the cause of this disease. On February 11, WHO named the disease COVID-19, an acronym for coronavirus disease 2019. Within the next two weeks, instances of COVID-19 were identified in Europe, the Middle East, and Africa. On February 29, the first COVID-19 death occurred in the United States. By March 11, WHO was terming the disease outbreak a pandemic. On March 16, in an effort to slow the spread of COVID-19, the White House issued social-distancing guidelines—and the world turned upside down. The business of real estate has been built on interpersonal relationships and conducted face-to-face. Long before email, the Internet, and social media, REALTORS® created and distributed mimographed newsletters in which they shared information about upcoming community events and the accomplishments of neighbors, recommendations regarding the best local sources for products and services, and even an occasional recipe or two as they worked their farms.
8
SEPTEMBER | OCTOBER 2020
OC REALTOR®
PRESIDENT’S MESSAGE
Even though real estate was classified as an “essential industry” in California in late March, requirements for face coverings and social distancing to slow the spread of COVID-19 made it impossible to conduct business as usual. In-person meetings and signings, open houses, and final walk-throughs have had to be reinvented. Now, as individual REALTORS®, we are struggling to do old things in new ways, to conduct business as usual in these unusual times. Necessity is the mother of invention, and the Directors and Management Team at Orange County REALTORS® have been unusually inventive in converting this imposed separation into an opportunity for increased education and outreach. For example, Orange County REALTORS® has sponsored virtual meetings and supplied tools that enable REALTORS® to sign forms and transmit documents digitally. We have doubled the number of classes and webinars we are offering and have seen attendance at these events increase as much as tenfold over what was typical for similar in-person events before the pandemic. We offer seven weekly Marketing Meetings via Zoom, at which REALTORS® can network, talk about their buyers and their pitch listings; and soon, the Professional Standards Committee will hold virtual hearings. All Board of Directors and Committee meetings have also been held virtually since April with our goal to figure out the best ways to reach out to our members, make good decisions, and adapt to changing guidelines and conditions. In these challenging times, Orange County REALTORS® also has helped its members stay in touch with lawmakers. Working closely with Federal Political Coodinators, we developed a series of virtual REALTOR® Town Halls featuring real-time conversations with members of the 116th Congress, where members could ask questions about real estate–related topics such as the CARES Act, Fair Housing, and the federal eviction moratorium. These Town Halls drew between 400 and 500 participants, up from the typical 50 to 100 for similar pre-pandemic in-person events.
We have made personal protective equipment—including cloth masks, disposable masks and gloves, disinfecting wipes, and booties—available in both our Laguna Hills office and our Fountain Valley office. And we have stocked new For Sale signs that advertise Virtual Tours. This merchandise can be ordered by phone at either 949-586-6800 (for Laguna Hills) or 714-375-9313 (for Fountain Valley), or online at www.ocrealtors.org/shop. Members can pick up their purchases curbside during business hours at either office but must first make an appointment so that their merchandise will be assembled and ready. In addition, we are installing retail lockers at the Laguna Hills office so that merchandise purchased by phone or online can be safely and conveniently picked up after hours and on weekends. And OC REALTORS® Directors have worked with the Communications Team to prepare for members a video Message of Hope, which shows Directors donning masks, adapting to new protocols, and finding creative ways to meet the challenges of this new “distanced” environment. During these extraordinary times, as individuals, as families, as Affiliates, as REALTORS®, and as an Association of Professionals, we are enjoying the comfort of home, experiencing the power of community, and being reminded in so many important ways that we truly are stronger together!
“
During these extraordinary times, as individuals, as families, as Affiliates, as REALTORS®, and as an Association of Professionals, we are enjoying the comfort of home, experiencing the power of community, and being reminded in so many important ways that we truly are stronger together!”
OC REALTOR®
SEPTEMBER | OCTOBER 2020
9 on
New REALTORS® joined Associations and attended orientations. They honed their skills by taking classes these Associations offered. And they built their businesses by meeting people, making telephone calls, and going doorto-door. They held open houses to allow prospective buyers to view properties that were on the market, and they made appointments for interested clients to visit homes that were for sale. Real estate was hands-on, person-to-person, and face-to-face—until now!
DRE UPDATE
Dear Orange County REALTORS®, We are excited to introduce our newest publication for licensees called Real Estate Advertising Guidelines. We hope you find this resource informative and proactive with your compliance assessments. Sincerely,
Doug McCauley
Commissioner, Department of Real Estate
Advertising has long raised questions for REALTORS®. What, exactly, is “advertising”? What constitutes a “team name”? In what ways does a team name differ from a DBA? What information must appear on promotional materials intended to be a first point of contact? What information should not be included? And what about properties that are “coming soon”? During August, the California Department of Real Estate (DRE) issued its publication RE 27 (New 8/2020) to answer these and other questions about real estate advertising. Contained in fourteen numbered pages, this attractive booklet may not tell you all you ever wanted to know about real estate advertising (and were afraid to ask), but it does establish a basic business philosophy of clarity and truthfulness, define terms in easy-to-understand language, cite relevant code sections, and offer specific examples. For example, one column is devoted to a definition of terms, including real estate broker, real estate salesperson, designated officer, responsible broker, manager, and broker-associate. The following page outlines Supervision Responsibility and Compliance Expectation: “Real estate licensees are expected to comply with all applicable laws and regulations, including those pertaining to advertising. The failure to comply could result in issuance of a citation and assessment of a fine or, where more serious violations are involved, more formal disciplinary action.” In this context, the word advertising is defined as “a form of communication that uses signs, symbols, or actions to create or raise awareness of a business or products, promote a brand, or bring in customers.” With few exceptions, only real estate licensees are permitted to advertise their services and to solicit clients in connection with the purchase, sale, or lease of property or with soliciting borrowers or lenders, negotiating loans, or exchanging real property.
10
SEPTEMBER | OCTOBER 2020
OC REALTOR®
DRE UPDATE
THE DRE MAKES ITS
ADVERTISING GUIDELINES
AVAILABLE IN BOOKLET FORM In a fourteen-page booklet titled Real Estate Advertising Guidelines, the California Department of Real Estate tells you everything you need to know about what to do—and what not to do—when advertising properties and real estate–related services.
By Sherri Butterfield According to the booklet, licensees have a clear responsibility for ensuring that their advertising is not misleading or deceptive. In instances where they have not done so, “Claiming ignorance when one should have known the truth is not a defense, nor is carelessness or negligence.” This booklet cautions REALTORS® to keep advertisements current and mentions that problems can arise with long-lasting print materials, such as telephone directories, billboards, and Internet websites, when situations change so that specific information shown in the advertisement—such as the telephone number, address, or brokerage—is no longer applicable or accurate. In a section devoted to “coming soon” signs, the booklet, explains that these signs “are generally used for homes that will be for sale soon but have not yet been placed on the market” because the property is undergoing work or the seller is waiting for a more opportune time.
instances, licensees may not be acting in their client’s best interest and, for this reason, may “expose themselves to the potential for an increased chance of civil liability and regulatory action.” The booklet also cautions that professional designations and years of experience must be described accurately and that claiming to be a REALTOR® when one is not a member of the National Association of REALTORS® is “false, deceptive and misleading” and is a clear violation of both the trademark and the Real Estate Law. As a Final Thought, the booklet offers the reminder that “advertisements must be clear and truthful—and of value and benefit to customers.” The Department of Real Estate says that printed copies of this valuable resource will soon be available to order. Meanwhile, the booklet can be looked up, read, and downloaded for reference using the search words "Real Estate Advertising Guidelines", RE 27.
But these signs also have been used to “limit exposure to the property for a licensee’s benefit” and to “obtain an exclusive advantage over other agents.” In these
OC REALTOR®
SEPTEMBER | OCTOBER 2020
11
Names in the News
Joyce Endo
Congratulations to Our New Officers! As the result of an election held during the Orange County REALTORS® Board of Directors meeting in June, Adam Rodell will serve as President-Elect in 2021 and as President in 2022, and Joyce Endo will serve as Treasurer in 2021. Adam Rodell
Adam began his real estate career in 1998 and has been an active member of Orange County REALTORS® for more than twenty years. During that time, he has served as Treasurer of Orange County REALTORS® and has chaired its Political Affairs and Elections Committee. Orange County REALTORS® honored Adam as REALTOR® of the Year in 2018. In 2019, to create a source of mutual support and encouragement for Association members, Adam founded the REALTOR® and Affiliate Wellness (RAW) Group, a program that is now being emulated by Associations throughout California.
Tim Hayden
12
SEPTEMBER | OCTOBER 2020
Jerry Koller
OC REALTOR®
Joyce, whose first career was as a registered nurse and unit manager, was originally licensed as a real estate agent in 2005. She joined Orange County REALTORS® in that same year and has since served on several committees, including Local Government Relations North, Finance, and Political Affairs and Elections. In addition, she is a member of the Orange County Chapter of the Asian Real Estate Association of America (AREAA) and was president of the Women’s Council of REALTORS® Coastal-West Orange County Network in 2017.
Three Members Graduate from Mastery Program Congratulations to Tim Hayden, Jerry Koller, and Rita Tayenaka, the three most recent graduates of the Mastery Program sponsored by the Independent Broker Alliance. To learn more about the Mastery Program, visit www.ocrealtors.org/mastery. Rita Tayenaka
Here for you with step-by-step home financing support Let’s talk about your options
Steve Glass Branch Manager Newport Beach, CA 949-809-2555 steven.glass@wellsfargo.com NMLSR ID 453218
Matthew Didier Sales Manager 949-371-9718 matthew.didier@wellsfargo.com NMLSR ID 463518
Joseph James Pirro Sales Manager 949-809-2590 joseph.j.pirro@wellsfargo.com NMLSR ID 483673
Let’s connect Newport Beach Branch 4675 MacArthur Court, Ste. 1400 Newport Beach, C 92660 Information is accurate as of date of printing and is subject to change without notice. Wells Fargo Home Mortgage is a division of Wells Fargo Bank, N.A. © 2020 Wells Fargo Bank, N.A. All rights reserved. NMLSR ID 399801. AS5167579 Expire 02/2021
Michael Prime 949-809-2550 michael.prime@ wellsfargo.com NMLSR ID 468654
Eric Heimstaedt 949-809-2578 erik.heimstaedt@ wellsfargo.com NMLSR ID 1321090
Jacob Neushul 949-644-7574 jacob.neushul@ wellsfargo.com NMLSR ID 450373
William Walker 949-415-6885 william.walker@ wellsfargo.com NMLSR ID 1082287
Lisa I. Chen 714-865-9945 lisa.i.chen@wellsfargo.com NMLSR ID 455425
Tina Little 949-274-6249 tina.little@wellsfargo.com NMLSR ID 1152900
Lisa Banhagel 949-500-5780 lisa.p.banhagel@wellsfargo.com NMLSR ID 463400
Vikas Chaddah 714-612-5093 vikas.chaddah@ wellsfargo.com NMLSR ID 453275
Maryam M. Gillany 949-809-2558 maryam.m.gillany@ wellsfargo.com NMLSR ID 460014
Lisa Van Alphen 949-809-2563 lisa.vanalphen@ wellsfargo.com NMLSR ID 300832
David L. Stiffler 949-809-2545 david.stiffler@wellsfargo.com NMLSR ID 265135
Dena Zeman 818-324-3103 dena.zeman@wellsfargo.com NMLSR ID 451131
Brittany Cammarata 949-903-0699 Brittany.Cammarata@wellsfargo.com NMLSR ID 256981
John Fisher 949-809-2543 John.A.Fisher@wellsfargo.com NMLSR ID 622404
Steven Murray 949-322-6879 Steven.D.Murray@wellsfargo.com NMLSR ID 256981
Justin Rangel 714-315-8122 Justin.M.Rangel@wellsfargo.com NMLSR ID 498933
Kirstyn Hughes 949-410-1638 Kirstyn.Hughes@wellsfargo.com NMLSR ID 1491853
Names in the News
Photo by Marion Butterfield
Eileen Oldroyd
A Working Wardrobes volunteer stands in front of clothing donated by members of Orange County REALTORS ®.
NAR Chooses Eileen Oldroyd for Its 2021 Leadership Academy Class
Rita Tayenaka and Other OC REALTORS Members Donate Clothing to Replenish the Supply at Working Wardrobes
Eileen Oldroyd is one of twenty-five REALTORS® from across the country chosen to participate in the National Association of REALTORS® (NAR) 2021 Leadership Academy. Eileen—whose motto is “Live, Love, Lead”— currently serves as 2020 State President of the Woman’s Council of REALTORS® and was asked by NAR to chair its Sustainability Advisory Group. She says, “Leadership is not a destination; it’s a journey, and one that all of us are taking together. Effective leadership requires providing a vision, leading by example, and making everyone involved feel as if they are essential to the effort and derive some benefit from the outcome.”
In mid-July, Rita Tayenaka celebrated Give Back Days by collecting clothing for Working Wardrobes. Joining her in donating to this cause were Cindy Bistany, Kandi Kihm Brennan, Dirissy Doan, Lee Jacobs, Escrow Debi Peters, Wendi Marino Marshall, Cindy Uhrik, and Carole Lynch. As a result of their generosity, Rita’s husband Don Tayenaka loaded about four hundred items of clothing into his car for delivery to the new Working Wardrobes donation center in Irvine. Their donations helped to replace some of the clothing that was lost when a fire destroyed the previous Working Wardrobes warehouse in February.
Volunteers Brave Pandemic to Pick Oranges for Second Harvest Food Bank
Volunteers strike a pose in front of the San Juan Historical Society Building at 31831 Los Rios Street in San Juan Capistrano after picking an impressive 1,480 pounds of Valencia oranges.
14
SEPTEMBER | OCTOBER 2020
OC REALTOR®
On July 14, a contingent from Orange County REALTORS® participated in the Fourth Annual “Keeping OC Orange” picking event benefitting the Second Harvest Food Bank. Donning masks in compliance with COVID-19 protocols and wearing the usual garden gloves, hats, and sunglasses, these volunteers gleaned an impressive 1,480 pounds of ripe, juicy Valencia oranges, enough to fill three large watermelon bins.
Photo by Marion Butterfield
Photo by Marion Butterfield
Names in the News
Lucy Dunn with panelists from UCI Beall Applied Innovation
Neal Kelley, Orange County Registrar of Voters
Photo by Marion Butterfield
OC Forum Examines the Future of the COVID Curve In July, COVID-19 cases in Orange County were surging and local businesses had once again been told to close. The question on everyone’s mind was how to flatten the curve and return to business as (almost) usual. On July 10, OC Forum hosted a virtual two-part panel discussion titled “The Future of the COVID Curve” with a panel of healthcare professionals and a panel from UCI Beall Applied Innovation. Asking the questions and moderating the discussion was Orange County Business Council President and Chief Executive Officer Lucy Dunn. Panelist Daniel Parker, an assistant professor of public health at UCI, encouraged audience members to “wear masks” and added, “If you don’t need to go out, don’t.” Lucy pointed out that, to reopen safely, businesses needed to (1) find their industry-specific guidelines, (2) complete the checklist, (3) follow the guidelines, and (4) post the checklist in a public place. Her concluding words were, “Mask up, everybody! We hope that you and your loved ones stay safe and ahead of the curve.”
“Consider voting at home. If you drop your ballot in an official ballot drop box, it will be picked up that same day.” —Neal Kelley
Arianna Barrios, CEO of Communications LAB
Voting in November 2020: Registrar Neal Kelley Encourages Voters to Vote at Home On July 20, OCTax hosted another in its Tax Talk series. On this occasion, the topic was “Voting in November 2020.” Arianna Barrios, the chief executive officer of Communications LAB, asked the questions of Orange County Registrar of Voters Neal Kelley. Arianna: What effect will the new laws requiring registrars to mail ballots have on Orange County? Neal: They will have very little effect on us because we are already mailing out ballots. Arianna: With mailed ballots, voters have expressed concern about ballot harvesting. Neal: I am not a fan of ballot harvesting. In California, it’s unlimited; in Colorado, the limit is ten. Arianna: What are you doing to ensure the safety of the system? Neal: We have been strong partners with the FBI and the Department of Homeland Security. Orange County has one of the safest systems in the state.
OC REALTOR®
SEPTEMBER | OCTOBER 2020
15
Names in the News Arianna: What do you do to verify signatures? Neal: We compare the signature on the ballot with the signature we have on file. If the signatures do not match, we reach out to the voter. Incidentally, there is no signature comparison with in-person voting. The law forbids it.
“We need to work to increase supply, but the right mix of supply.”
—Katie Porter
Photo by Marion Butterfield
Arianna: As a former business owner, what do you think about Proposition 15, the split-roll initiative? Neal: As soon as I retire from the County, I’ll give you my opinion on that proposition.
Arianna: In closing, what advice would you give to voters this year? Neal: Consider voting at home. If you drop your ballot in an official ballot drop box, it will be picked up that same day. If you drop your ballot in a mailbox, it may not be picked up and processed until the next business day.
Jeff Jackson, Lauren Bloom, Dirissy Doan, and Katie Porter
OC REALTORS® Hosts a REALTOR® Town Hall with Congresswoman Katie Porter A centerpiece of the new programming offered online by Orange County REALTORS® during the COVID-19 pandemic has been a series of virtual REALTOR® Town Halls, featuring real-time conversations with members of the 116th Congress. During a period of great public uncertainty, these hour-long events have provided an opportunity for members to ask direct questions—and receive straight answers—about a variety of issues of special interest to them. Attendance at these Town Halls has been between 400 and 500 participants, up from the typical 50 to 100 at similar pre-pandemic in-person events. On July 22, the guest was Congresswoman Katie Porter, who represents the 45th District. Asking the questions was Federal Political Coordinator Jeff Jackson.
16
SEPTEMBER | OCTOBER 2020
OC REALTOR®
Jeff: What ideas do you have for incentivizing home purchase? How do you combat the hurdles? Katie: The federal government could be doing a lot more to increase the supply of housing. We need to work to increase supply, but the right mix of supply. Jeff: How could we encourage builders to create homes in the $500,000 range instead of higher? Katie: By using tax credits and separating purchase of the home structure from the ground lease. Also, there is a larger question here about the degree to which our country has used the housing market as a substitute for retirement savings. And seniors are carrying more and more debt into later life. Jeff: What can Congress do to help landlords when renters’ rent has been forgiven? Katie: Under proposed legislation called the Landlord Certainty Act, government could step in and make some or all of the rent payments. Jeff: How can we contact you in your office? Katie: Call 949-668-6600. Our office can help with anything involving a federal agency.
Names in the News
Sheriff Don Barnes Talks About The New Era of Public Safety
Steve: This pandemic has diminished revenues. What innovative solutions might you implement? Don: We are looking at return on investment and plan to make a $10 million reduction in budget. Steve: How do you respond to demonstrations? Don: We hold First Amendment protections in high regard and are there to support the right to be heard. Once a gathering transitions into criminal activity, we need to take action.
Photo by Marion Butterfield
On July 24, the South Orange County Economic Coalition presented a program titled “The New Era of Public Safety: An Essential Dialogue with Sheriff Don Barnes.” Asking the questions was South Orange County Economic Coalition Chair Steve LaMotte.
Steve LaMotte, Chapter Executive Officer for the Building Industry Association of Southern California – Orange County Chapter (BIA/OC) and Chair of the South Orange County Economic Coalition
Steve: In these difficult times, what can the public do to support the Orange County Sheriff’s Department? Don: Simply say, “Thank you for your service.” We are all on the same team. We are one community—inclusive of everybody, not exclusive of anybody.
Names in the News is intended to be primarily a place where REALTOR® and Affiliate members of Orange County REALTORS® can share both personal and professional news—about births (of children or grandchildren), graduations, weddings, anniversaries, accomplishments, awards, and other milestones— with one another. If you have news to share, email it to Orange County REALTORS® Writer and Editor Sherri Butterfield at Sherri@ocrealtors.org.
Photo by Marion Butterfield
Steve: What are your concerns going forward? Don: Right now, my primary concern is continuity of commerce. We need to get the economy back up and running in a healthy way. The biggest threat is the split-roll initiative. If it is approved by the voters, it will decimate the mom-and-pop brick-and-mortar businesses in Orange County. Don Barnes, Orange County Sheriff
“We are all on the same team. We are one community— inclusive of everybody, not exclusive of anybody.” —Don Barnes
OC REALTOR®
SEPTEMBER | OCTOBER 2020
17
THE ORANGE COUNTY HOUSING UPDATE
JUST WA ITING Although the housing market is hot, not every seller finds success.
By Steven Thomas
REPORTSONHOUSING.COM
After a potential buyer tours the home, the sellers return and wonder whether the buyer liked it enough to bring an offer. After all, the market is incredibly hot, right? Yet, there is no offer. Showing after showing, day after day, week after week, there are no offers. Moreover, after three months of market exposure, the number of showings has trickled down to only two or three a week.
Photos: www.istockphoto.com/ shironosov
The ink is still wet. A homeowner has just signed the contracts that will allow the For Sale sign to be hammered into the front yard. Excitement is in the air. This is the initial step toward finding a new home and creating a new beginning. The house has been cleaned from top to bottom, new flowers and a fresh layer of mulch accent the landscape, every light has been turned on, scented candles burn, and the homeowners are ready for potential buyers to explore their personal residence.
18
SEPTEMBER | OCTOBER 2020
OC REALTORÂŽ
THE ORANGE COUNTY HOUSING UPDATE
What is going on? Once again, sellers are in control of the housing market. Multiple offers are generated almost instantaneously after hammering in the For Sale sign. Homes fly off the market in the blink of an eye. Frustrated buyers must cut back their expectations after writing offer after offer with no success. It feels like housing is unstoppable despite the COVID-19 pandemic, yet not every seller finds success. The market is currently sizzling hot with an overall Expected Market Time (the time between signing the listing contract and opening escrow) at the start of August of 41 days, the hottest market since 2013 (see Figure 1). However, many sellers are unable to sell. Incredibly, 36 percent of all currently active listings have been exposed to the market for more than two months.
Figure 1. Expected Market Time. The market is currently sizzling hot. The overall Expected Market Time (the time between the signing the listing contract and opening escrow) at the start of August was 41 days, making this the hottest Seller’s Market since 2013. Sitting on the market for more than 60 days is to be expected in the luxury ranges, but plenty of sellers are having trouble selling in the lower ranges as well. Between 23 and 35 percent of all homes priced below $1 million have been listed for sale for more than two months and are still waiting for the right buyer to bring an acceptable offer to purchase. For homes priced above $1.5 million, nearly 50 percent of all listings have been marketed for more than 60 days (see Figure 2).
Figure 2. Sitting on the Market. Sitting on the market for more than 60 days is to be expected in the luxury ranges, but plenty of sellers are having trouble selling in the lower ranges as well. Even in this hot Seller’s Market, between 23 and 35 percent of all homes priced below $1 million have been listed for sale for more than two months.
OC REALTOR®
SEPTEMBER | OCTOBER 2020
19
THE ORANGE COUNTY HOUSING UPDATE
There is a definite allure to anything that is brand new, and homes are no different. Brand-new homes have all the latest bells and whistles, reflect the latest trends, and have that “new car smell.” Buyers gravitate toward anything that has the look and feel of a model home. Homes that have been totally redone are very appealing. If the price is right, the closer a home looks to model perfect, the faster it will fly off the market. Unfortunately, not every home looks like a model.
If a home does not have the look and feel of a model home, that fact must be considered when determining its Fair Market Value. A home’s Fair Market Value is based on its location, age, condition, and improvements. Homeowners can do nothing to change the location and age of a home; both are a given. However, they can address the condition and amenities. To fetch top dollar, a homeowner who has lived in a house for years must be willing to make an investment in updating and taking care of deferred maintenance so that buyers can visualize moving in right away. Buyers are willing to pay a premium for homes that are turnkey. If sellers address deferred maintenance, their home will sell more quickly, and they will net more money. Graphics by Ivan Salmeron
There has been an evolution in home buying. Back in the 1970s, 1980s, and 1990s, buyers were able to visualize the potential in a home and were willing to apply a bit of “elbow grease” to repair and update a residence if necessary. That simply is not true today. Chip and Joanna Gaines’s popular television show Fixer Upper and countless other shows about fixing up, remodeling, and selling homes have revolutionized the real estate industry. As a result, today’s buyers expect to purchase a home that looks like a model.
So many homes are dated and need cosmetic repairs. Scuffed walls, scratched floors, stained carpet, popcorn ceilings, original door and bathroom hardware, outdated light fixtures, and ceramic tile kitchens make homes feel used and worn out. Even a ten-year-old remodel may have a lot of wear and tear. Add a little pet damage, and it is no wonder that many sellers have a hard time selling, even in a hot market.
“
Buyers gravitate toward anything that has the look and feel of a model home.
”
20
SEPTEMBER | OCTOBER 2020
OC REALTOR®
Photos: www.istockphoto.com/ LOUOATES
If the market is so hot, why are so many homes just sitting on the market without success? The logical answer is price. Price a home too high, and it simply does not sell. But in most instances, price is only part of the problem.
THE ORANGE COUNTY HOUSING UPDATE
If a seller does not address deferred maintenance, then the price of the home must be adjusted accordingly. Buyers subtract a lot more than it costs to take care of the deferred maintenance. It is very inconvenient and time-consuming for buyers to tackle repairs after the close of escrow. It makes sense that a seller with deferred maintenance ultimately nets less money in the sale of a home. Warning to Sellers: Price is the most important factor in successfully selling. Overprice a home in a sizzling hot seller’s market, and you will not find success. Instead, your home will sit on the market, and you will waste valuable market time.
“
Buyers subtract a lot more than it costs to take care of the deferred maintenance.”
Steven Thomas has a degree in quantitative economics and decision sciences from the University of California, San Diego, and more than twenty years of experience in real estate. His bimonthly Orange County Housing Report is available by subscription and provides housing market analysis that is easy to understand and useful in setting the expectations of both buyers and sellers. His website is www.ReportsOnHousing.com.
OC REALTOR®
SEPTEMBER | OCTOBER 2020
21
FAIR HOUSING
EVERY MONTH SHOULD BE
FAIR HOUSING MONTH: An Interview with
Bob Taylor The Chief Executive Officer for the Grosse Point Board of REALTORS® wants to make fair housing and civil rights competencies a requirement for local Associations through Core Standards.
By Sabrina Blair
Director of Communications
22
SEPTEMBER | OCTOBER 2020
OC REALTOR®
FAIR HOUSING Bob Taylor is the Chief Executive Officer (Association Executive) for the Grosse Pointe Board of REALTORS®, a local Association in Michigan with more than 1,300 members. Bob became a licensed REALTOR® in 1974, served as President of Michigan REALTORS® in 2010, and joined Grosse Pointe Board of REALTORS® as Association Executive in 2014. Currently, he sits on the Fair Housing Policy Committee for the National Association of REALTORS® and is spearheading a campaign to require local Associations to address fair housing.
What does fair housing mean to you? I used to think that fair housing meant people— regardless of how they looked, spoke, dressed, talked, or where they were from, or what religion they followed, if any—could buy a home and live where they wanted if they qualified. Then, I came to realize that, for some, the inability to qualify was the result of years and years of unfair practices that systematically made some less able to qualify than others. For example, I knew there had been something called redlining. What I did not know was that it was a system developed by our government during the 1930s which said that, when a neighborhood had a 15 percent African-American population, it was considered a highloan-risk area. So now, for me, fair housing means finding ways to undo more than one hundred years of unfair housing. I have always envisioned myself as a problem solver, but I have no idea how you undo more than one hundred years of bad policy. Finding a solution for this problem is made even more difficult when most people who look like me do not think we are part of the problem.
What has led you to campaign for the National Association of REALTORS® to make fair housing and civil rights competencies a requirement for local Associations through Core Standards? It is my opinion that the issues of fair housing, civil rights, and inclusion are not where they are today because we have too few laws or regulations. They are where they are today because we have chosen to rely on laws to make the difference instead of requiring us to be the difference. I became a REALTOR® in 1974 and have actively participated as a volunteer ever since. Not once did I ever go to a local or state meeting and hear anyone mention fair housing until I took the At Home with Diversity certification class in the mid-1990s. After that, fair housing was something you discussed in April when you attended a half-day program one day during the month—kind of like going to church on Easter and calling yourself a Christian. Well, about a decade later the phrase “silence is acceptance” suddenly made sense to me. I do not recall anything specific that made that happen. It just did. When it did, I found it very bothersome that REALTORS® considered April to be Fair Housing Month, because every month should be Fair Housing Month. When I became an Association Executive (AE) in 2014, I began putting that philosophy into practice. It was a slow start, however. Our membership looked mostly like me and was not comfortable even discussing the topic.
OC REALTOR®
SEPTEMBER | OCTOBER 2020
23
FAIR HOUSING First, we established a Fair Housing Committee. Next, we planned an annual Fair Housing event and started presenting the At Home with Diversity certification class annually. Eventually. we made Fair Housing, Diversity, and Inclusion a regular topic at all four of our yearly general membership meetings. As expected, we got some resistance from people who said they were uncomfortable talking about the subject. Those comments have now stopped, either because people are no longer uncomfortable as it relates to the subject or because they at least know they are on the wrong side of the issue.
“I have always envisioned myself as a problem solver, but I have no idea how you undo more than one hundred years of bad policy.” Then, the Newsday article about Long Island hit last year. (Editor’s Note: Newsday won an award for its 2019 series titled “Long Island Divided.”) The information was sent to our Extended Leadership Team the next day, our brokers the day after, and it was reproduced in our November Board of Directors packet as an agenda item. Everyone who read the article realized the importance of all we had done over the past five years and how much more remained to be done. This led me to consider that gradually introducing the members to something they had never talked about openly before might have helped. I then considered that perhaps if these same baby steps were taken by other local and state Associations because they were part of Core Standards, something might change. The need to do so was confirmed when I mentioned it in a meeting and a State AE said, “We don’t need to do that; it is already in Core Standards.” That person was referring to the two or three references to the topic in Core Standards out of a couple dozen and you only needed to pick two. The reality is that you could be Core Standards– compliant and never have to touch the subject.
24
SEPTEMBER | OCTOBER 2020
OC REALTOR®
What are your Association and your members doing to address fair housing? In a letter to the leadership of the Association Executives Council and the Core Standards Committee, I sent the following list of questions to start this much-needed conversation: » 1. Do you have a Fair Housing Committee? » 2. Do you belong to fair housing–related organizations (NAACP, Fair Housing Center, etc.)?
» 11. Did you provide NAR’s At Home with Diversity (AHWD) course? » 12. Did you provide NAR’s Leading with Diversity Workshop?
» 3. Do you have a program that promotes fair housing to your members?
» 13. Do you have specific resources budgeted for fair housing support?
» 4. Do you present fair housing–related information at membership meetings?
» 14. Do you provide fair housing–related information to media outlets?
» 5. Do you participate in fair housing–related events/ programs outside your Association?
» 15. Is there a Fair Housing Component in your Strategic Plan?
» 6. Do you promote/discuss fair housing–related issues outside your membership? » 7. Have you used REALTOR® Party grants in predominately minority populated areas? » 8. Do you provide resources to your members for reporting fair housing–related issues? » 9. Do you provide resources to the public for reporting fair housing– related issues? » 10. How do you promote NAR’s Action, Culture, Training (ACT) Initiative?
» 16. Are you associated with an organization that provides/promotes service animals for those with disabilities? » 17. Do you partner with or have membership in the National Association of Hispanic Real Estate Professionals (NAHREP), the Asian Real Estate Association of America (AREAA), the National Association of Real Estate Brokers (NAREB), or the National Association of Gay & Lesbian Real Estate Professionals (NAGLREP)?
We do all these things as much as we can annually at no out-ofpocket expense to the Association.
FAIR HOUSING
What would you recommend other Associations and their REALTOR® members do to address and further the cause of fair housing? First, it has become obvious to me that before you can discuss solutions, you have to admit there is a problem and that if you look like me, most likely you are part of that problem—not because you are a bad person, but because you are unaware of the history that brings us to where we are today. Second, make fair housing, civil rights, and inclusion part of who you are, which is not unique to this issue. Anything you want to champion must be part of who you are; otherwise, you are kidding yourself and others, and eventually either they will figure it out or you will quit.
Fourth, believe that one person—or one Association— can make a difference. In my forty-six years of involvement within NAR, I have truly seen one person, without title or position, start a chain of events that impacted all of us within NAR and every American who owns real estate, but that is a story for another time. I want to conclude by thanking your Association Executive, Dave Stefanides, for reaching out to me on this topic after I had posted the list of seventeen things (on page 24) to my fellow AEs on a NAR Association Executive forum. I also need to mention two people whom your readers do not know. The first is E’toile Libbett. E’toile is someone with whom I have always been able to have a safe conversation about race. The second is Ursel Mayo. Ursel never lets me forget I am part of the problem, but she has always been my close friend. You need people like these in your life to keep you on the right track and to keep you from giving up.
Third, the issue of fair housing, civil rights, and inclusion starts—regardless of all the different ways we use to pretend that we are different from “them”—with you.
“
Believe that
one person— or one Association —can make a difference.”
OC REALTOR®
SEPTEMBER | OCTOBER 2020
25
Register for classes at www.ocrealtors.org/calendar
ELECTION 2020
28
SEPTEMBER | OCTOBER 2020
OC REALTOR®
ELECTION 2020
ELECTION 2020:
WHY YOU SHOULD CARE— AND VOTE! By Sherri Butterfield
You should care who is elected in November because local, state, and federal laws affect you, your community, and your quality of life.
Graphics by Ivan Salmeron
You should care who is elected to your local City Council because cities are responsible for providing a number of critical services, including emergency medical response, fire protection, law enforcement, sidewalk and street maintenance, traffic control, and trash and recycling collection. Council members decide how often, how quickly, and how well these services are delivered. You should care who is elected to the California Legislature because members of the state Senate and Assembly enact laws about everything from reusable plastic bags to state income tax and decide how to apportion state education funds and how much to spend on highspeed rail. You should care who is elected to Congress because the federal government controls lending practices, the mortgage interest rate, and the mortgage interest deduction. Thus, federal laws have a strong influence on housing availability and affordability.
OC REALTORÂŽ
SEPTEMBER | OCTOBER 2020
29
ELECTION 2020
Register. The last day to register for the November 3 Presidential General Election is fifteen days before that election. Your registration must be submitted electronically by October 19 or postmarked no later than this date. To check your registration status or to register, visit the website maintained by the Orange County Registrar of voters at ocvote.com. Learn about the propositions. Twelve ballot measures were certified to appear on the ballot for the November 3 election. These ballot measures are designated Propositions 14 through 25 and involve affirmative action, bail for suspects awaiting trial, bonds for a state stem cell research institute, consumer privacy protection, independent contractor definition, law enforcement, physicians on-site at dialysis centers, property taxes (both inheritance rules and split roll), rent control, and voting rights (for seventeen-year-olds and for convicted felons on parole). To learn more about these propositions, read the State Voter Information Guide or visit the website maintained by the California Secretary of State at sos.ca.gov. Learn about the candidates. Read the Candidates’ Statements of Qualifications in the Official Voter Guide and visit the websites maintained by the candidates. Orange County REALTORS® does not endorse candidates; however, every two years, the trustees of its Political Affairs and Elections Committee conduct interviews with political candidates. Based on these interviews—and on a questionnaire that each new candidate is asked to fill out—these trustees identify candidates who support the ideals of private property rights, free enterprise, and responsible government and whose positions on real estate–related issues qualify them as REALTOR® friendly.
30
SEPTEMBER | OCTOBER 2020
OC REALTOR®
Watch for a mailer from Orange County REALTORS®. Because this September/October issue OC REALTOR® went to press before all the candidates had been interviewed, information about REALTOR®-friendly candidates will be mailed directly to you in October. Vote. This year, every active, registered voter will be sent a ballot. You can vote at home and drop off or mail in your marked, signed ballot, or you can vote in person at a voting center. The deadline for the Registrar of Voters to receive a vote-by-mail ballot in person is November 3, 2020, at 8:00 p.m. Your mailed, voted ballot will count only if the identification envelope is signed, dated, and postmarked no later than November 3 and is received no later than November 6, at 8:00 p.m. Track your ballot. Sign up at WheresMyBallot.sos.ca.gov to receive automatic email, text, or voice notifications regarding when your ballot has been sent out, processed, and counted.
# GO
VO TE
Graphics by Ivan Salmeron
If real estate is your profession, politics is your business. Elected officials at the city, state, and federal level make decisions about real estate that range from the mundane to the monumental and include open house sign size and placement, land use and zoning, business licensing requirements, point-of-sale mandates, property tax assessments, lending practices, flood insurance availability, mortgage interest rates, and the mortgage interest deduction. Thus, electing candidates who understand real estate and care about propertyrelated issues is an important means of protecting your livelihood and your business.
ELECTION 2020
HOW DO YOU
VOTE SAFELY
DURING A
PANDEMIC?
This year, you can mark your ballot at home, either drop it off or mail it in, and track its progress electronically to determine when it has been received, processed, and counted. By Michelle McCann
With an election coming on November 3 and the COVID-19 pandemic continuing, voting safety is on everyone’s mind! For democracy to function smoothly, people must be able to cast ballots for the candidates and ballot measures of their choice; however, practicing social distancing, both while standing in line to vote and while marking ballots at the polls, could be a challenge.
You Can Vote at Home If you are a registered voter, your ballot will arrive by mail with return postage prepaid. You can mark and mail your ballot without ever leaving home.
Ballots Will Be Mailed Photo by SDI Productions
Under the circumstances, California Secretary of State Alex Padilla says that mail-in ballots are the safest option. And California Governor Gavin Newsom has signed an executive order to ensure that every active, registered voter will be sent a ballot no later than twenty-nine days before the election. If you are uncertain about your registration status, you can verify it, register (if you have not already done so), or re-register (if you have moved or your address has changed) at ocvote.com.
OC REALTORÂŽ
SEPTEMBER | OCTOBER 2020
31
ELECTION 2020
Election Calendar September 24 – October 13, 2020 State Voter Information Guides and County Voter Information Guides are mailed directly to registered voters.
October 5 Ballot drop-off locations open
October 19 Deadline. Last day to register to vote in the General Election
October 20 – November 3
You Can Mail in or Drop off Your Ballot You can also mail your marked ballot at any U.S. Post Office or any U.S. Postal Service mailbox, place your ballot in a designated ballot drop box, or deliver your ballot to a voting center. Ballot drop boxes will be available between October 6 and November 3. And you can look up the location of the ballot drop box nearest your home or office at ocvote.com.
You Can Vote in Person If you prefer, you can still vote in person at a voting center, but in-person voting operations will be limited this year. Beginning the Saturday before election day, counties must open a minimum of one in-person voting location for every ten thousand registered voters. In-person voting locations will provide services like replacement ballots, same-day voter registration, language assistance with ballots, disability assistance with voting, and more. Voting center locations will be listed at ocvote.com.
You Can Track Your Ballot A new tool called “Where’s My Ballot” is being rolled out this year. It will allow voters to track their ballots to see when they have been sent out, processed, and counted. You can sign up at WheresMyBallot.sos.ca.gov to receive automatic email, text, or voice notifications regarding your ballot. 32
SEPTEMBER | OCTOBER 2020
OC REALTOR®
Conditional voter registration period. During the period fourteen days before an Election Day and including Election Day, an individual can go to the office of his or her county elections official to conditionally register to vote and to vote a provisional ballot. October 24 Select vote centers open
October 31 Additional vote centers open
November 3 Election Day. Polls will be open from 7:00 a.m. to 8:00 p.m.
November 3 Deadline for the Registrar of Voters to receive a vote-by-mail ballot in person is November 3, 2020, at 8:00 p.m. A mailed, voted ballot will count only if the identification envelope is signed, dated, and postmarked no later than Election Day, November 3, and it is received no later than three days after Election Day, November 6, at 8:00 p.m.
December 3 Deadline. County election officials must complete the canvass of official returns, certify the results, and submit a report of these results to the Board of Supervisors no later than this date.
January 4, 2021 Elected county officers take office at noon on the first Monday after January 1 succeeding their election. For additional information, visit the website maintained by the Orange County Registrar of Voters at ocvote.com.
WILL THE
VOTERS
ELECTION 2020
NEW HOUSING DEVELOPMENT IN NOVEMBER? If approved by voters, Proposition 21 will allow local governments to impose rent control, which will discourage new development and exacerbate California’s affordable housing shortage.
If a poison causes a disease, the obvious cure has to be even more poison, right? To most of us, that prescription sounds insane—but it is a fair description of California’s approach to addressing the disease that is the state’s affordable housing shortage. Because much of the existing shortage is caused by government interference with the housing market, the solution, some people reason, must be even more government meddling. That certainly seems to be the theory behind the misleadingly titled “Rental Affordability Act” appearing on California’s November ballot. This latest misguided scheme, which would allow cities to enact rent control caps on most homes at least fifteen years old, will only worsen the affordable housing crisis. Why is affordable housing such a problem in California? There are many reasons, including restrictive zoning laws, environmental restrictions and other regulatory burdens, punishing impact fees, and NIMBY opposition from other landowners.
When it comes to building "newa par tments, one
disincenti ve looms above all others: rent control.
”
But when it comes to building new apartments, one disincentive looms above all others: rent control. Rent control first arose in California in the 1970s in response to changing residential demographics. With a scarcity of affordable single-family homes, more Californians moved into apartments. That, in turn, led to a shortage of apartments. With the supply low and the demand high, rents correspondingly rose. In response, liberal enclaves like Santa Monica and San Francisco imposed rent control schemes. The impact on housing supplies was predictable: Builders feared losing money in rent-controlled jurisdictions, so they took their business and investment elsewhere. In 1995, the Legislature stepped in to limit the damage by passing the bi-partisan Costa-Hawkins Rental Housing Act. That law prohibited cities from imposing rent control on single-family homes and condominiums. Most important, newly built apartment buildings would be free from rent control. Moreover, once an existing tenant vacated a rent-controlled apartment, the rent could be reset to match market conditions. While too many other restrictions remained in place to fully address the housing shortage, it did help. More new apartments were built once developers knew they would be free from rent control. OC REALTOR®
SEPTEMBER | OCTOBER 2020
33
ELECTION 2020 Until now, that is. In 2018, a group of activists tried to use a ballot measure to toss Costa-Hawkins and allow rent control to be imposed throughout the state. Fortunately, that proposal lost overwhelmingly, with 62 percent of California voters rejecting this new rent control scheme.
And the Rental Affordability Act, if passed in November, will have precisely the same effect. We are all familiar with the old saying that “the definition of insanity is doing the same thing over and over again and expecting different results.” There is no better illustration of that principle than this latest effort to dress up failed rent control schemes as a solution to the affordable housing crisis.
Now the same activists are back with a slightly scaledback version. Once again, they want to toss CostaHawkins and make rent control safe for ambitious politicians. If they get away with it this time, it will make California’s housing crisis much worse than it already is.
Here’s hoping voters get the message and reject this poisonous ballot initiative, so we can focus on solutions that will actually improve the situation, like changes to zoning laws and regulatory reform that will allow for more new construction.
Economists are in near-universal agreement on rent control: In a 2012 survey of professional economists, 98 percent agreed that rent control does not work. By making housing shortages worse, rent control forces prices higher. Any benefit to those living in rent-controlled apartments is more than offset by higher housing costs for everyone else. Even leftleaning economist Paul Krugman warns of the perils of rent control, calling it “predictable” that in a rentcontrolled environment there will be “sky-high rents on uncontrolled apartments, because desperate renters have nowhere to go—and the absence of new apartment construction, despite those high rents, because landlords fear that controls will be extended.”
James S. Burling is Pacific Legal Foundation’s vice president of litigation and principal attorney in PLF’s Property Rights Practice Group. He has been with PLF since 1983, and his cases involve regulatory takings, environmental and land use regulations, and eminent domain. His article was originally published in the Morning Docket emailed by Pacific Legal Foundation on Friday, July 10, 2020, and is being reprinted here with permission.
“In a 2 012 survey of profe ssional economists, 98 percent agreed that rent control does not wor k. By making housing shortages worse, rent control forces prices higher.” A recent study of San Francisco, where older apartments are largely free from the effects of Costa-Hawkins, found that rent control failed to keep costs low and, instead, resulted in a net loss of affordable housing units. Again, this was predictable: When prices of any good are forced below the market price, the demand for the price-controlled good increases, while the incentive to supply that good decreases. A shortage develops.
34
SEPTEMBER | OCTOBER 2020
OC REALTOR®
ELECTION 2020
SPLIT-ROLL INITIATIVE
WILL NOT
DELIVER
PROMISED TAX REVENUES
Instead, it will sharply increase personnel and administrative costs, which will absorb any additional property tax revenue for years to come, leaving little for “schools and communities.”
When it comes to assessing homes or businesses, there is not a Democratic or Republican way. County Assessors administer California’s property tax system’s complex laws and regulations fairly and equitably. We try to ignore the political consequences of our actions. Sometimes our assessments result in increases in property taxes. Other times, we lower property taxes to reflect declining real estate values. As residents and taxpayers, we care about adequate funding for our schools and local government, as well as the adverse impacts higher taxes can have on businesses and residents. But as property tax administrators, our duties require us to be subjectmatter experts objectively overseeing a complex system that involves tracking every parcel of property in our counties that ultimately leads to a property tax bill. However, when an initiative threatens the stability of our entire property tax system, we are compelled to speak
36
SEPTEMBER | OCTOBER 2020
OC REALTOR®
out. We have joined the California Assessors’ Association (CAA) in opposing the Split-Roll Initiative on November’s statewide ballot, commonly referred to as the Schools and Communities First Initiative (Proposition 15). If approved by voters, this proposition “splits” the property tax roll, requiring that businesses, farm production, and residential properties be assessed differently. As a Democrat and a Republican, we do not always agree on politics, but we strongly agree that this ballot initiative, as written, simply cannot be implemented by January 1, 2022. Today, property taxes for both residential and business properties are calculated based on 1 percent of the property value at acquisition, or when there is new construction. Annual property tax increases are capped at 2 percent. The cap limits property tax increases when property values rise.
ELECTION 2020 The proposition will not generate a net increase in revenue for many years, if at all, not in months as promised. Between now and then, it will create administrative chaos for property tax administrators. An independent and impartial analysis prepared for the California Assessors’ Association concluded that the implementation cost would reach $1 billion during the first three years, with no guarantee it will generate a fraction of the promised $12.5 billion in annual new property tax revenue, or that the state Legislature will approve the millions of dollars to recruit and train hundreds of new senior appraisers. For decades, the state government has failed to pay its fair share to fund property tax administration in California. Assessors have no confidence that it will do so now. The requirement to reassess commercial properties to market value every three years will cause an estimated twelve-fold increase in reassessments annually, dramatically impacting assessor’s ability to provide essential services to all taxpayers, including residential homeowners. An independent, nonpartisan analysis prepared for the San Bernardino Assessor-Recorder’s office projects the assessor will need to double its current budget by 2023. The report does not include additional staffing for the reassessment of farms, including dairy, barn, production facilities, or wineries.
Under this new scheme, assessors would be required to reassess commercial and industrial properties to market value at least every three years. The proponents project assessors will add $1.2 trillion in new assessed value virtually overnight. There is no light switch to make that happen. It is simply not possible. Collectively, the two of us have more than thirty years of experience serving as county assessors for Santa Clara County and San Bernardino County. We represent politically diverse communities in different parts of the state. We have joined other assessors in concluding that a split-roll initiative, as written, would be not just challenging to implement, it would be impossible. If the proponents behind this initiative seek to generate tax revenue to immediately “plug” local government budget shortfalls due to COVID-19, this measure will not do it. Nor should schools count on new revenue in 2022 for their budgets.
A similar analysis for Santa Clara County found that the additional cost for the county finance agency, county legal counsel, and the assessment appeals board may increase by 36 percent. In November, we hope voters seriously consider the costs and administrative challenges of the split-roll ballot measure and join us in voting No. Larry Stone is the Santa Clara County Assessor and is a registered Democrat. Bob Dutton is the San Bernardino County Assessor-Recorder-County Clerk and is a registered Republican. Their article was originally published in the San Jose Mercury News on Sunday, June 29, 2020, and can be accessed online at https://www.mercurynews. com/2020/06/28/opinion-costly-split-roll-initiativewont-deliver-promised-revenues/#comments. It is being reprinted here with the permission of the authors.
OC REALTOR®
SEPTEMBER | OCTOBER 2020
37
Photos: www.istockphoto.com/ LeoPatrizi
REALTOR® SAFETY
IN A TIME OF By Sherri Butterfield On December 31, 2019, China informed the World Health Organization (WHO) about a suspicious cluster of pneumonia cases in Wuhan, a large city in Hubei Province. One week later, a new type of coronavirus was identified as the cause of this disease. On February 11, WHO named the disease COVID-19, an acronym for coronavirus disease 2019. Within two weeks, instances of COVID-19 were identified in Europe, Iran, South Korea, Italy, and subSaharan Africa. On February 29, the first COVID-19 death occurred in the United Sates. By March 11, WHO was terming the health situation a pandemic. And on March 16, the White House issued socialdistancing guidelines. By late March, real estate had been classified as an “essential industry” in California, which meant that property could be bought and sold, but REALTORS® had to find new ways to conduct their business. Open houses and property showings, in-person meetings and signings, and final walk-throughs had to be reinvented. In early articles about COVID-19, readers were told that the disease was spread primarily by touch and that the best protection against it was to wash hands carefully and often, wear gloves, and clean frequently touched surfaces like countertops, doorknobs, handles, keypads, phones, and railings with disinfectant. More recently, it has become clear that the virus is spread on moisture droplets that are released when people exhale, cough, sneeze, speak, sing, or shout. According to an article published in the peer-reviewed journal Physics of Fluids, when not blocked by a mask, these droplets can travel as far as eight feet in still air.
38
SEPTEMBER | OCTOBER 2020
OC REALTOR®
Wearing a mask reduces the size of the droplet clouds that are released and diminishes the distance the droplets can travel to as little as eight inches. In these ways, it may curb the spread of the disease; therefore, wearing masks is now recommended as an additional precaution people can take to limit their own exposure to COVID-19 and to avoid spreading this disease to others.
Adjust your mask so that it fits snugly over your cheeks
REALTORÂŽ SAFETY
How to Wear and Care for Your Mask
Levels of Risk Associated with Common Activities
Because COVID-19 is spread on water droplets, one of the most effective things you can do to slow its spread is to wear a surgical mask. To be effective, the Centers for Disease Control (CDC) recommends that the mask cover both your nose and mouth so that it creates a barrier between you and potential contaminants in the environment. If worn properly, a surgical mask helps block large-particle droplets, splashes, sprays, or splatter that may contain bacteria or viruses, preventing them from reaching your nose and mouth.
No matter what precautions you take, there is some risk associated with the activities in which you engage. Below is a chart on which are shown some common activities and the level of risk associated with each one.
When putting on your mask, adjust it so that it fits snugly over your cheeks, tucks under the lower rims of your glasses (if you wear glasses), and is pulled down under your chin. When it is time to remove the mask, avoid touching the front surface and, instead, hold the mask by the ends or straps. After each use, discard disposable paper masks and wash cloth masks with soap or laundry detergent in the warmest water the fabric will allow. To discard used surgical masks safely, place them in a plastic bag, and put the bag in the trash. Wash your hands after handling used masks.
2
1 Opening the mail
Getting a takeout meal from a restaurant
2
2 Pumping gasoline
Playing tennis
2
3 Going camping
and is pulled down under your chin.
Grocery shopping
3
3 Going for a walk, run, or bike ride
Playing golf
CONTINUED ON
40
pg.
OC REALTORÂŽ
SEPTEMBER | OCTOBER 2020
39
REALTOR® SAFETY CONTINUED FROM
4
4
4
4
pg.39
Levels of Risk Associated with Common Activities
Staying at a hotel for two nights
4
Sitting in a doctor’s waiting room
5
Spending an hour at a playground
5
This list was compiled by the Texas Medical Association (TMA) and the TMA Committee on Infectious Diseases, who assumed that participants in the listed activities were doing what they could to limit infection by following recently issued guidelines and recommended safety protocols. It is intended to help you choose activities wisely during this COVID-19 pandemic.
40
Eating at a restaurant (outside)
5
Having dinner at someone else’s house
6
Attending a backyard barbecue
6
LE
STY
Going to a beach
6
Shopping at a mall
6 Swimming in a public pool
Disclaimer:
5
4 Walking in a busy downtown area
Going to a library or museum
7
7 Visiting an elderly relative at home
7 Attending a wedding or funeral
7
Traveling by airplane
Hugging or shaking hands
SEPTEMBER | OCTOBER 2020
Attending a large music concert
OC REALTOR®
7
7
Eating at a buffet
7 Playing football
8 Working out at a gym
9 Going to a game in a sports stadium
Eating in a restaurant (inside)
Playing basketball
8
8
Working a week in an office building
Going to a hair salon or barbershop
7
7
8
Sending kids to school, camp, or day care
Attending a religious service with 500 people
Going to a movie theater
9 Going to a bar
REALTOR® SAFETY
By Marissa Hughes
OC REALTOR®
SEPTEMBER | OCTOBER 2020
41
Even during the COVID-19 pandemic, real estate transactions are moving forward, and that is good news! But how can you follow safety guidelines while doing business so that your clients feel comfortable? Below are some steps you can take to ensure that sellers still want to list their homes with you and that your buyers are still comfortable buying.
1. Stock Up on Protective Equipment When possible, show property virtually, but have a plan ready if prospective buyers want an in-person tour. Stock the property in advance with hand sanitizer, disinfecting wipes, and face masks in case someone shows up without these items. You can purchase face masks, gloves, booties, and disinfecting wipes from Orange County REALTORS® by phone at either 949-586-6800 or 714-375-9313, or online at www.ocrealtors.org/shop, and arrange to pick up your purchases curbside at either the Fountain Valley or the Laguna Hills office.
2. Prepare the Property for Showings Before scheduled showings, post the Posted Rules for Entry (C.A.R. Form PRE) at the entrance to the property so that they are clearly visible. Immediately before a scheduled showing, open the doors and windows (weather permitting) to introduce fresh air. Also, open all interior doors, turn on lights, and open cabinets to minimize the number of doorknobs, handles, light switches, and other surfaces clients will need to touch. Between scheduled showings, clean shown properties thoroughly and disinfect frequently touched surfaces (i.e., doors and doorknobs, cabinet handles, switches, lock boxes, and the like). To view the most recent guidelines, visit C.A.R.’s COVID-19 website at www.carcovidupdates.org/faq-showings.
42
SEPTEMBER | OCTOBER 2020
OC REALTOR®
Graphics by Ivan Salmeron
REALTOR® SAFETY
“When possible, show property virtually, but have a plan ready if prospective buyers want an in-person tour.”
REALTOR® SAFETY
3. Have the Property Entry Advisory and Declaration Signed Every person entering the property—including appraisers, clients, contractors, inspectors, repairmen, stagers, and even buyer’s agents—must sign the Coronavirus Property Entry Advisory and Declaration (PEAD) and deliver it electronically to the listing agent in advance of the visit. The California Regional Multiple Listing Service (CRMLS) has partnered with Glide to create a guided workflow to make it easier to create, send, and manage PEAD forms. Now, you can create compliant PEAD forms from the listing page with one click and request signatures via DocuSign or Digital Ink. Graphics by Ivan Salmeron
“Between scheduled showings, clean shown properties thoroughly and disinfect frequently touched surfaces.”
This workflow allows you to deliver individualized PEAD forms automatically to the listing agent in addition to collecting and organizing PEAD forms for all your listings using a unique link you can share via the Multiple Listing Service, your website, email, or text. To learn more about how to use Glide within CRMLS for PEAD forms, visit www.ocrealtors.org/glide-pead.
For Up-to-Date Information Please note that this article is not an exhaustive list of the steps you must take to show property safely during the COVID-19 pandemic. Guidelines for real estate transactions and businesses were being discussed, reviewed, and revised while this issue of OC REALTOR® was being prepared for publication. To be certain that you are familiar with and are following the most up-to-date guidelines, review the Guidance for Real Estate Transactions provided by the California Department of Public Health and Cal/OSHA at covid19.ca.gov or visit the California Association of REALTORS® (C.A.R.) COVID-19 website at www.carcovidupdates.org.
OC REALTOR®
SEPTEMBER | OCTOBER 2020
43
44
SEPTEMBER | OCTOBER 2020
OC REALTOR®
AFFILIATES IN ACTION
AFFILIATES HELP EDUCATE Reem
Peter
KurdMisto
NEW
“G” Giammarinaro
Mike
Cindy
Barnett
Luckett
REALTOR® Mike
Bella
Grambow
Samel
MEMBERS
Kerri
Carrie
Finch
Ybarra
Joe
Pierce
IN JULY Because of the limitations placed on group gatherings during the COVID-19 pandemic, Orange County REALTORS® is offering its regular New REALTOR® Orientations online.
46
SEPTEMBER | OCTOBER 2020
A special thank you to the following Affiliates who provided short video clips to help educate the new REALTOR® members who joined Orange County REALTORS® in July: Affiliate South Chair Joe Pierce, Iron Key Escrow; Affiliate South Co-Chair Reem KurdMisto, National Pacific Lending; Affiliate North Chair Kerri Finch, J&J Coastal Lending; Affiliate North Co-Chair Mike Grambow, American Pacific Mortgage; Mike Barnett, Real Property Management; Peter "G" Giammarinaro, The Termite Guy; Cindy Luckett, HomeTeam Inspection Service of Southwest OC; Bella Samel, J&J Coastal Lending; and Carrie Ybarra, 7c Escrow.
OC REALTOR®
Way to Go! Sherri, How exciting that the magazine has won an award! Way to go! Loved your article about Nancy. We really got to know her more from that! Thanks.
Photos: www.istockphoto.com/ TaceRouda
Graphics by Ivan Salmeron
MENTIONS
EDITOR’S NOTE: Rita’s email is about the recognition that the September/October 2019 issue of OC REALTOR® received during the 68th Annual Maggie Awards in late April 2019 (see the related article on page 14 in the July/ August 2020 issue of OC REALTOR®) and about the tribute to Nancy Hunt that appeared on pages 16–17 in that same issue.
Rita Tayenaka Coast to Canyon Real Estate
Thank You! Sherri (and Team Communications), I wanted to thank you for working with me on the “Navigating Your Risks” articles and to let you know that the Department of Real Estate decided to share/post the entire set. The Department’s post reads, “Check out this three-part series from OC REALTOR© called 'Navigating Your Risks' featuring an interview with DRE’s own Veronica Kilpatrick. https://dre.ca.gov/newsroom/news.html." Thanks again, and have a great day! Tiffany Gardner Wood Risk Manager, Orange County REALTORS®
EDITOR’S NOTE: During the Orange County REALTORS® RExpo in September 2019, Tiffany had an opportunity to interview Veronica Kilpatrick, who was representing the Department of Real Estate (DRE) at that event. Veronica, who has been with the DRE since 2007, serves as the District Manager and Southern California Government, Public Interest, and Law Enforcement Liaison. In this capacity, she is responsible for supporting the Department’s mission to safeguard and promote the public interests in real estate matters through licensure, regulation, education, and enforcement in this geographical jurisdiction. During the interview, Veronica answered questions about real estate advertising, Department audits, and discipline removal. Tiffany turned Veronica’s answers into a three-part series titled “Navigating Your Risks.” The first article, titled “Real Estate Advertising,” was published in the November/ December 2019 issue of OC REALTOR® on pages 42–45. The second article, titled “Audits,” was published in the January/ February 2020 issue on pages 36–39, and the third article, titled “Removing Disciplinary Action from the Public Record,” was published in the July/August 2020 issue on pages 26–29.
CALL FOR MENTIONS Media postings and emails intended for possible publication in this magazine should be sent either to Director of Communications Sabrina Blair at Sabrina@ocrealtors.org or to Writer and Editor Sherri Butterfield at Sherri@ocrealtors.org. All written material may be edited for content, length, or style and may appear either online or in print. Emails become the property of Orange County REALTORS®. Although some may be answered, none will be returned. OC REALTOR®
SEPTEMBER | OCTOBER 2020
47
READERS WRITE
48
SEPTEMBER | OCTOBER 2020
OC REALTOR®