Santa Cruz Real Estate – Let’s Talk Politics!

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In case you hadn’t noticed, it’s election season. Change is in the air – of course, it might all just get blown away and we’ll be back to the same-ol’, same-ol’ we’ve come to know and love for generations.

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I got a nice e-mail from my friends at the California Association of Realtors today. It seems they want to put a stop to AB 2678, which would require “energy audits” every time a property is sold, to make sure that it is energy efficient. Maybe that sounds like a good idea to you – heck, who is against energy efficiency?

The question isn’t if we want our homes to be energy efficient. The question is, what is the best way to achieve that? There are all kinds of blog entries and articles on the internet discussing the pros and cons of this. Naturally, the C.A.R. is opposed to any such legislation. Here is what they have to say:

AB 2678 will require a state agency to set up a process to require point-of-sale energy efficiency audits that will cost up to $400 and ultimately will require point-of-sale energy efficiency retrofits that may cost THOUSANDS of dollars. While C.A.R. has no objection to increasing energy efficiency, AB 2678 will be both dangerous to the real estate market and grossly ineffective. Here’s why AB 2678 is a bad idea:

-AB 2678 will hurt your business. Heaping costly requirements on all sales will slow every residential AND commercial transaction, further weakening the real estate market and the economy.

-Point-of-sale approaches take too long. Research shows that only 22% of the properties most in need of energy efficiency retrofits will actually be sold by 2020. AB 2678 will be grossly ineffective in achieving its goals.

-AB 2678 will hurt housing affordability. The mandatory audit and retrofit requirements ultimately created could add THOUSANDS of dollars to every transaction. And every $1,000 increase in the price of a home disqualifies 26,600 families from owning.

Good points, good points. Personally, even though I’m a dues-paying member, I don’t fall for the C.A.R. argument hook, line, and sinker on every issue. There are many costs incurred by sellers and buyers in the purchase of real property – why not add this one to the list? It sure would be a boon to window and insulation salesmen. Might they be the folks who have sponsored this legislation? I’d be interested to see where the PAC money behind this one came from.

Now, there’s not much you can do about AB 2678 aside from writing your state representative. Maybe have a picnic lunch up at the Capitol in Sacramento while holding up a placard, pro or con. But there are a couple of measures on the ballot you might want to know about, Proposition 98 and 99.

To be honest, I haven’t studied either one of these in great detail, but they are both nominally about eminent domain. But the topic did come up at our office meeting this morning. It seems that Proposition 98 has a sneaky back-door to abolish rent control:

The provisions of this Act shall become effective on the day following the election

(“effective date”); except that any statute, charter provision, ordinance, or

regulation by a public agency enacted prior to January 1,2007, that limits the price

a rental property owner may charge a tenant to occupy a residential rental unit

(“unit”) or mobile home space (“space”) may remain in effect as to such unit or

space after the effective date for so long as, but only so long as, at least one of the

tenants of such unit or space as of the effective date (“qualified tenant”) continues

to live in such unit or space as his or her principal place of residence.

Those dirty dogs! I’m conflicted about rent control, personally – in an ideal world, it wouldn’t be necessary or desirable, but the fact is, this world is far from idea, and rent control does have its place – this is much better left up to individual localities, I think, rather than having some kind of sneaky tactics to get the voters to approve getting rid of rent control this way. So I’m going to have to say No on Proposition 98.

Proposition 99, on the other hand, sounds like a good one. It stops the government from using Eminent Domain to take property from people so that it can be sold to, say, Wal-Mart so they can “enhance the economic development of a community” or some such. I’m all for enhancing economic development, but private property rights are a fundamental part of the American system, and this bill just seems plain anti-American. Or it seems patently American, if you’re from that point of view. So it’s looking like I’m Yes on 99.

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