April 1, 2019

Real estate agents ramp-up political activism as state economy, housing market flounder

Photos | Contributed
Photos | Contributed
New Haven Realtor Michael Barbaro, (left) immediate past president of Connecticut Realtors, moderated a televised gubernatorial debate last fall between GOP nominee Bob Stefanowski (center) and eventual Democratic winner Ned Lamont.
Anchorwoman Kristi Olds in Connecticut Realtorsí recently created TV studio housed in CTRís headquarters at 111 Founderís Plaza in East Hartford.
Candace Adams, CEO, Berkshire Hathaway Home Services of New England
Dan Keune, President, CTR

When you think of your local Realtor, what comes to mind?

A friendly face looking to connect buyers to their dream home or help sellers trade their real estate for a smaller or larger dwelling?

That's still the main job of Connecticut's shrinking corps of residential real estate brokers, but they have been much more active recently in another role: politics.

Alarmed over the state's lackluster economic growth and sluggish housing market since the Great Recession, Connecticut Realtors (CTR), this state's largest professional association of real estate agents, has ramped up its lobbying efforts at the state Capitol in recent years as it tries to stake a larger role in shaping fiscal and economic policy.

The group's stepped-up efforts at influencing state government culminated last fall when, for the first time some agents can recall, it backed a candidate for governor — GOP nominee Bob Stefanowski — while also pouring hundreds of thousands of dollars into a political action committee to support him.

Meantime, Realtors in the last two years have nearly doubled the amount they've spent on lobbying in Hartford and at state agencies, records show. They've also launched their own online news network, warning members about policies that could hurt the industry.

Organizations that stick their nose deeply into politics do so at their own risk, and now that Democrat Ned Lamont is governor, some question whether CTR made a smart choice backing a candidate for the state's highest office.

Many groups, including the Connecticut Business & Industry Association, the state's largest business lobby, purposefully avoid endorsing a gubernatorial candidate knowing they may have to eventually work with someone they don't necessarily agree with.

Roy Occhiogrosso, a former political advisor to Gov. Dannel P. Malloy, said CTR's political activism stands outside the norm for their industry.

"I don't think I've ever seen it before,'' said Occhiogrosso, who is now managing director in Hartford of Global Strategy Group, a consulting and PR firm. "The problem with making a bet is sometimes you lose.''

Indeed, choosing the wrong side can have consequences. In his two-year, $43 billion budget, Lamont has proposed several tax hikes that would hit the state's homebuying industry particularly hard, including taxing real estate commissions and other related services and increasing the conveyance tax on high-end homes.

Realtors say they fret those tax proposals. The rancor, too, has exposed a split among Realtors in the state, some of whom privately and publicly say they disagree with CTR's decision to ramp up its political engagement.

"I was opposed to it,'' said Candace Adams, CEO of Berkshire Hathaway Home Services of New England. Her unit has more than 1,900 agents/brokers and is part of the sprawling U.S. agent/broker network overseen by billionaire Warren Buffett's Berkshire Hathaway investment vehicle.

"I don't believe we should endorse a [gubernatorial] candidate,'' Adams said. "I think we should have allowed our members to vote accordingly.''

Adams isn't planning to end her CTR membership, however, she said the episode has stoked her fires to become an advocate more on issues vital to realty agents and their customers.

New Haven broker Michael Barbaro, CTR's immediate past president, moderated a CTR-produced, televised gubernatorial debate that aired before last November's election. He said Connecticut Realtors' political engagement dates back decades. CTR says it endorsed 127 candidates in the state's General Assembly and congressional races last November.

"We were looking for someone who could work with us to improve Connecticut,'' Barbaro said.

Lamont spokesperson Maribel La Luz, in an email, said the governor shares Realtors' economic concerns for the state and is working diligently to address them.

Housing market blues

Connecticut Realtors have every reason to be concerned about the state's economy and housing market, which suffered a major blow during the 2007-2008 financial crisis, leading to a wave of foreclosures and a movement of more people renting rather than buying.

Also, the state's population has shrunk in recent years, meaning there are now fewer potential homebuyers and sellers. The state's high cost of living is also an issue, made all the worse by two large tax increases since 2010 and the threat of tolls and other tax hikes being considered at the state Capitol this year as lawmakers look to close a $3 billion-plus deficit over the next two years.

Indeed, while the number of Connecticut homes sold has crept up in recent years, prices have been stuck in neutral. In 2008, the median sale price of a single-family home sold in this state was $267,500, according to Boston publisher The Warren Group. Last year, the median home sale price was $258,000.

Meantime, home values nationwide have grown 43 percent. Declining home values, too, directly impact agents' revenue and income, since they typically collect an average of 3 to 5 percent commission per property sold.

The number of licensed realty brokers in this state has also steadily declined, falling 15.5 percent since 2010, according to the Department of Consumer Protection.

Lobbying and activism

In the wake of the state's sluggish economy, Connecticut Realtors have stepped up their political activism.

Evidence of that has been on display both publicly and privately. For example:

• In the 2017-18 reporting period, CTR spent $524,666 on lobbying, according to Office of State Ethics data, which was up 69 percent from the previous two-year period. So far in 2019, the group has spent $34,383.30 on lobbying in Hartford.

• In 2014, the association hired James Heckman, the longtime top lobbyist and aide to former state banking Commissioner Howard Pitkin, to be its government-affairs director.

• In 2017, CTR paid UConn women's basketball legend Geno Auriemma to join some 2,300 Realtors for a legislative rally outside the state Capitol, at which the coach bashed the state's fiscal condition and called for pro-growth policies.

Perhaps the biggest political statement CTR has ever made came in 2018. Prior to last fall's election, the body hosted a televised gubernatorial debate at the Shubert Theatre in New Haven, moderated by Barbaro and attended by a raucous crowd of real estate agents, some of whom carried signs that read, "Give Us a CT to Sell."

Then, about a month later it endorsed a full slate of candidates for statewide and congressional offices, most notably backing Stefanowiski for governor. It also spent over $500,000 for media services in support of Stefanowski's campaign.

CTR says it has routinely backed candidates in state and local races, but not the governor's race. However, Realtors' leadership says their concern for the state's economic and fiscal climate deepened in recent years, which led them to support a gubernatorial candidate they thought would best help the economy.

Realtors' endorsements weren't strictly based on party affiliation. They backed a number of Democrats.

In addition, 11 candidates CRT supported also happened to be Realtors. Most of them won their respective races.

CTR-TV launched

One of the more creative ways Realtors are trying to get their voices heard and spread information to members is through the launch of a new online news network, CTR-TV.

The lobby airs its views in a series of streamed online videos, called "5 in 5." One March 11 installment features anchor Kristi Olds sitting in a plush news studio urging CAR members to reach out to their state lawmakers "to oppose any new real estate taxes.''

In particular, they've taken aim at Lamont's proposals to apply the state's 6.35 percent sales tax to real estate services and increase the seller's conveyance tax for properties over $800,000. It's estimated those measures alone would generate $118 million in additional tax revenues over the next two years.

Realtors have also launched online an ad campaign to oppose those policies.

Vernon Realtor and CTR President Dan Keune said the group's video-streaming feature "ensures a timely way to bring information to both our Realtor members and the public." One clip features Keune telling a group of Realtors, "We are gearing up for what we think will be the most difficult legislative session we've ever seen.''

In an email, Keune said state leaders "may not realize the staggering amount of homeowner equity and home values that would be removed with the proposed and massive new taxes to home sellers and real estate transactions. CTR can't support harming real estate owners."

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