It was my pleasure this week to represent Pennsylvania Realtors® in our nation’s capital.
PAR President-elect Todd Umbenhauer, PAR’s new CEO Mike McGee, PAR Public Policy staff members Derenda Updegrave and Elizabeth Hensil and I met with our congressional lawmakers to discuss some of the National Association of Realtors® federal legislative priorities this year.
We were pleased to meet with Sen. Bob Casey and U.S. Reps. Lou Barletta, Brendan Boyle, Matt Cartwright, Ryan Costello, Charlie Dent, Brian Fitzpatrick, Mike Kelly, Tom Marino, Patrick Meehan, Scott Perry, Keith Rothfus, Bill Shuster, Lloyd Smucker and G.T. Thompson.
One of their top priorities is the reauthorization of the National Flood Insurance Program, which is set to expire at the end of September.
Without the NFIP, millions of home and small business owners will not be able to obtain a mortgage or insurance to protect their properties against the most expensive and common natural disaster in the U.S. – flooding.
NAR supports reauthorizing and gradually strengthening the NFIP so it’s sustainable over the long run. In addition, NAR believes in providing federal assistance to high-risk property owners, including guaranteed loans, grants and buyouts in order to build higher and keep NFIP rates affordable. NAR is also supportive of the development of private market options would offer comparable flood insurance coverage at lower costs.
Lastly, NAR also is advocating for more granularly pricing NFIP policies to better reflect the property’s specific risk and improving flood map accuracy so fewer property owners have to file expensive appeals.
We explained some of the flood insurance issues that homeowners have experienced and how this affects the real estate industry in Pennsylvania. We’re grateful to PAR members sharing these stories. Pennsylvania ranks 12th in the nation in policies through the NFIP. In addition, the commonwealth ranks fifth in the nation in flood claims.
NAR continues to work with the agencies and staff involved with the NFIP and has reported that we’ll continue to see rising rates as the NFIP moves to actuarial rates as they manage the risk of the program.
We also talked to our congressmen about proposed tax reform initiatives. Specifically, we expressed concern with one aspect of the House Republican Tax Reform Blueprint, which could have unintended consequences for homeowners.
The plan calls for the standard deduction to be nearly doubled from its current levels and includes the repeal of the deduction for state and local taxes paid, as well as the elimination of most other itemized deductions. Either of these changes alone would marginalize the value of the current-law tax incentives for owning a home.
NAR predicts these changes could create devastating problems for the real estate industry. First, the impact on first-time homebuyers could be enormous, because the current-law tax incentives make the crucial difference for many to be able to afford to become a homeowner. Second, the reduction of the mortgage interest and real property tax deductions would likely cause a significant plunge in the value of all houses.
NAR estimates that with these changes, less than 5 percent of filers will itemize and be able to take advantage of the mortgage interest deduction, which has been available for more than 100 years.
We stressed that losing the benefits of the mortgage interest deduction and state/local tax deductions is really a detriment to Pennsylvania homeowners due to the amount many are paying in our state.
And lastly, we discussed the importance of Fannie Mae and Freddie Mac. It’s anticipated that legislation will be introduced to restructure these government-sponsored enterprises.
NAR supports restructuring the second mortgage market to ensure a reliable and affordable source of mortgage capital for consumers. They have multiple recommendations to help ensure that reforms create a strong, efficient financing environment. These recommendations can be read in their entity online.
I’m looking forward to hearing the progress NAR has made during NAR’s Legislative Meetings in May.