Government Affairs Update – Second Quarter of 2017

Massachusetts State House - Freedom Trail Site - Boston, Massachusetts, USA

The second quarter of 2017 has been busy for MAR Government Affairs. After a slow start, the legislature briefly picked up the pace before closing out the quarter focused almost entirely on the issues of marijuana and the state budget.

ANNUAL BUDGET
The budgeting process for fiscal year 2018 drew the interest of Realtors® when the Senate included two concerning provisions in its annual budget. First, the Senate included a section that would have expanded the room occupancy tax that hotels charge guests, to the rental of private homes for less than 90 days. Under this proposal, homeowners would be required to comply with onerous business regulations and administrative burdens that were never intended for the average homeowner. A home is not a hotel and a homeowner who leases her cottage for a week or even a day would be required to abide by the requirements as detailed in the Senate proposal.

The Senate also included a provision that would have increased the Community Preservation Act surcharge on recording fees from $20 to $45 per document, resulting in an increase of hundreds of dollars. This would have further exacerbated the inequitable manner of funding the CPA with recording fee surcharges. In effect, purchasers of homes and other properties are paying to fund the CPA, which provides benefits to the entire community.

We are happy to report that, because of MAR’s advocacy on these issues, the budget compromise agreed to by the House and Senate does not contain either of these proposals. It is important to note, however, that both proposals still exist as separate legislation and are currently working their way through the legislative process.

ROOM OCCUPANCY
In addition to addressing the proposed room occupancy tax provision in the Senate budget, the Joint Committee on Financial Services also held three hearings on a different bill that would tax short term rentals at varying tax rates. Realtors® from across the Commonwealth testified at hearings in Lenox, Barnstable, and Boston on the impact that such a tax would have on homeowners who only occasionally rent their homes. This will continue to be a big issue as the legislature heads towards an August recess. Thank you to all of the Realtors® that showed up to testify at the hearings.

H.O.M.E. BILL HEARING
The legislature held two hearings on An Act improving housing opportunities and the Massachusetts economy, the H.O.M.E. Bill. President Paul Yorkis, MAR Legislative & Regulatory Counsel, Justin Davidson and representatives from the Greater Boston Real Estate Board testified first before the Joint Committee on Municipalities and Regional Government and highlighted some of the key provisions of the bill that would aid in the production of much needed housing in Massachusetts. Just a few weeks later, President Yorkis, Government Affairs Committee Chair Steve Medeiros, and MAR Past President Corinne Fitzgerald testified before the Joint Committee on Community Development and Small Business, once again advocating for the passage of the H.O.M.E Bill.

TRANSFER TAX
On June 13th MAR General Counsel and Director of Government Affairs, Michael McDonagh testified before the Joint Committee on Revenue in opposition to proposals to create a transfer tax on the sale of real estate. Transfer taxes would create an entrance or exit fee to homeownership and would have serious implications for the Massachusetts housing economy. These taxes single out home buyers and sellers and raise the bottom line price of many homes by thousands of dollars.

TITLE 5 WORK GROUP
President Yorkis continued to represent Realtors® at the Department of Environmental Protection’s Title 5 Stakeholder meetings. The purpose of the meetings is to have outside experts and interested parties that represent a variety of interests and viewpoints provide advice to MassDEP on what modifications should be considered.

LEAD PAINT
In June, the Governor’s Lead Paint Advisory Commission met to discuss proposed changes to the lead regulations in the Commonwealth. The proposed amendments are intended to improve organization, clarify regulatory requirements, rescind unnecessary or outdated requirements, and implement a standard for lead poisoning and a blood lead level of concern used by the CDC and most states. Of note to those in the deleading field, they also propose to remove the deleading standard for a small number of surfaces, specifically some surfaces currently considered “accessible/mouthable”, which could substantially reduce deleading costs.

NAR MID YEAR
In May, thousands of Realtors® attended the 2017 Realtors® Legislative Meetings and Trade Expo in Washington, D.C. It has never been more important for Realtors® to remain engaged in advocacy initiatives and have our unified message and voice heard on Capitol Hill. As long as Realtors® continue to remain steadfast in working together, great strides will be made to protect the American Dream of property ownership and the real estate industry. This year Realtors® met with members of Congress to discuss tax reform, flood insurance, and protecting sustainable homeownership.

BOARD OF REGISTRATION
At its May 10th meeting, the Board of Registration of Real Estate Brokers and Salespersons once again discussed the use of the new Massachusetts Mandatory Real Estate Licensee-Consumer Relationship Disclosure form. MAR had requested clarification regarding use of the old form once the new form was released. The Board confirmed that there will be a two-year grace period before any action would be taken against agents using the old form during a transaction. Despite the approved grace period, MAR still strongly suggests that all agents use the new form released by the Board in January of this year.

MARGARET C. CARLSON REALTOR® DAY ON BEACON HILL
Over 400 Massachusetts Realtor® -members traveled to the State House on Wednesday June 14th to participate in the 32nd annual Realtor® Day on Beacon Hill. The annual lobbying day gave Realtors® the opportunity to discuss with their legislators the key issues that impact consumers, housing and the economy. State Senator Karen Spilka (D – Ashland), Chair of the Senate Ways & Means Committee, provided the 2017 keynote address. Thank you to all who attended.

2017 PRIVATE PROPERTY RIGHTS AWARD
Kevin Sears of Springfield was awarded the 2017 Private Property Rights Award at Realtor® Day on Beacon Hill on June 14th. The award is given to Massachusetts Realtors® whose outstanding efforts in advocacy have helped the Association achieve its objectives of increased access to homeownership and preservation of private property rights. Congratulations to Kevin.

HOUSING PRODUCTION HEARING
Proponents of efforts to increase housing production in Massachusetts crowded the hearing room at the State House on June 20th when the Joint Committee on Housing held a hearing on bills relative to production. President Yorkis delivered testimony that not only emphasized the housing supply shortage but also highlighted the revenue to the state and municipalities that goes along with housing production.

The Impact of Recreational Marijuana on Real Estate

Large Indoor Marijuana Commercial Growing Operation With Fans, Greenhouse, Equipment For Growing High Quality Herb. Cannabis Field Growing For Legal Recreational Use in Washington State
Large Indoor Marijuana Commercial Growing Operation

On November 8th 2016 Ballot Question #4, which will allow for the recreational use of marijuana, was passed by Massachusetts voters in a fairly wide margin of 54% to 46%. Under the new law, the use of marijuana for recreational purposes will be legal starting on December 15, 2016. However, the sale of the drug from regulated retail stores will not be permitted until the beginning of 2018. So how will this new law impact real estate? Here are a few considerations to keep in mind, but watch for more information from MAR on this issue in the coming weeks and months.

The first thing to consider is that although legal under state law, marijuana remains a Schedule 1 illegal substance under federal law. Up until this point the federal government has taken the position that it will not enforce federal law in those states that permit recreational marijuana usage. However, there is no guarantee that they will keep this position in the future as more and more states change their laws to allow for the use of marijuana.

How will the legalization of recreational marijuana affect landlord-tenant relationships and the rights of each party? As written, the law will allow for landlords to prohibit the smoking of marijuana on their property, but owners should be sure to check the language of their lease agreements to make sure the issue is covered. Just as a landlord may prohibit smoking of cigarettes in an apartment, they may also prohibit smoking of marijuana.

How will the new law affect residential transactions? Similar to the laws in Colorado and other states, the law will permit residents to cultivate a certain amount of the drug in their homes for personal use. This could potentially impact the homeowners insurance policy if there is a loss due to issues related to water damage, electrical fires and mold issues.

When listing a home where cultivation is occurring, it is prudent to have a conversation with the seller prior to any showings or open house. A seller should consider removing or relocating equipment during the listing period.

Finally, the new law provides cities and towns with some ability to regulate or prohibit the sale of marijuana at retail locations within their community.

It is likely that additional regulations will be enacted and changes to the law itself may be made by the legislature before 2018. This will hopefully provide some additional time to clarify some of the issues that relate directly to the real estate industry.

MAR & GBREB Testify in Support of H.O.M.E Bill | The Wednesday Word

homebilltestifiersOn October 20th, MAR President Corinne Fitzgerald, MAR Vice President of Government Affairs Paul Yorkis, and David Wluka of Wluka Real Estate joined representatives from the Greater Boston Real Estate Board to testify in support of the H.O.M.E. Bill before the Joint Committee on Community Development and Small Businesses at the Massachusetts State House.

S119 An Act improving housing opportunities and the Massachusetts economy, filed on behalf of the Massachusetts Association of REALTORS® and the Greater Boston Real Estate Board by Senator Michael Rodrigues (D-Westport), would make changes to Massachusetts zoning laws that would help remove barriers to housing production, keep future homeowners in the state and strengthen the Massachusetts economy.

“The production of new housing is what we need for Massachusetts to remain competitive in the region, the country and the world,” said 2015 MAR President Corinne Fitzgerald, broker-owner of FITZGERALD Real Estate in Greenfield. “We live in a great state that people want to live in, but the cost of housing is making it more and more difficult to stay here or move here. The H.O.M.E. Bill will remove the barriers that are holding back our ability to produce the housing we need.”

“The H.O.M.E. Bill seeks to meet our state’s housing needs, in turn strengthening the economy and retaining valuable human capital in Massachusetts,” said State Senator Michael J. Rodrigues (D-Westport). “This bill offers a multifaceted approach to easing the Commonwealth’s housing shortage, reducing red tape, streamlining the housing production process, and encouraging smart growth. It will make Massachusetts an even better place to live and work.”

Some Provisions of the H.O.M.E. Bill Include:

  • Smart growth by requiring that cluster development be allowed by right in residential zoning districts, at the density permitted in the underlying zoning district.
  • Multifamily housing construction by requiring that cities and towns permit multifamily development by right on at least 1.5% of the community’s developable land area that is suitable for multifamily residential.
  • Affordable in-fill housing by requiring that accessory dwelling units (“ADUs”), sometimes referred to as in-law apartments, be permitted by right in all single-family residential zoning districts.
  • Easing the burden on property owners to obtain dimensional relief for minor improvements by creating a two-tiered variance approach.
  • Replacing the super majority vote requirements for variances and special permits with a simple majority standard.
  • Creating consistent wetlands requirements by restoring uniformity across Massachusetts by prohibiting local wetlands requirements in most cases.
  • Creating consistent sewage disposal requirements by establishing a DEP review and approval process of local sewage disposal systems regulations to ensure they are scientifically-based restrictions, necessary to protect unusual local resources and do not conflict with Title V.

To read more about the H.O.M.E. Bill check out The MAR Report or MAR Government Affairs page. For more on the hearing, read the full press release.

(Please note: This blog post was prepared by MAR Legal Staff: Michael McDonagh, General Counsel; Ashley Stolba, Associate Counsel; Justin Davidson, Legislative & Regulatory Counsel; and Christine Howe, Public Policy and Finance Coordinator)

The Wednesday Word: Call for Action – Stop Patent Trolls!

REALTORcalltoaction

This week the U.S. House of Representatives is scheduled to vote on H.R. 9 – The Innovation Act of 2015, which would increase protections to the real estate industry from frivolous lawsuits brought by patent trolls. This important legislation would close loopholes in our legal system that currently allow Patent Trolls to target REALTORS® for using common business technologies like dropdown menus, search functions on websites, or scan-to-email technologies found in every office scanner.

On Monday, July 12th, the National Association of REALTORS® launched a Call for Action and is asking all REALTORS® to contact their Members of Congress and urge them to support H.R. 9 – The Innovation Act.

If you have not yet responded to this CFA, please visit the Call for Action webpage to do so. As of today, over 1,350 of our members have contacted their Member of Congress to urge them to support this legislation. For up to date response rates, please visit the Realtor Action Center.

To learn more about Patent Trolls, please watch this brief video. You can also visit  the Patent Page on NAR’s website. Please also read the letter that was sent to the Massachusetts delegation on behalf of the Massachusetts Association of REALTORS®.

Contact your U.S. Representative and urge them to support H.R. 9, the Innovation Act

(Please note: This blog post was prepared by MAR Legal Staff: Michael McDonagh, General Counsel; Ashley Stolba, Associate Counsel; and Justin Davidson, Legislative & Regulatory Counsel. Edited by Christine Howe, Public Policy and Finance Coordinator)

The Wednesday Word: Internet Speed, Home Values, and The Last Mile

It is no surprise that in the 21st century, connectivity to the internet impacts many facets of the economy. Because a fast internet connection is growing in importance, it is beginning to affect home values as well.

In “Study: Speedy Internet Boosts Home Values,” NAR’s REALTOR® Magazine discusses the impact of the lack of high speed internet on home values. The lack of high speed internet is a widespread issue that affects the entire country, especially in rural communities. The article states that “the impact with Internet speeds and home sales are often found to be most significant in rural areas where Internet speeds tend to show more fluctuations”. Because internet is a determining factor for homebuyers, this lack of connectivity is affecting the values of homes and even how some agents list homes.

This internet issue is particularly important in Western Massachusetts where underserved communities are still without high speed access. To try to tackle this issue local officials are trying to push for their own high speed networks. In a project dubbed “The Last Mile” the Massachusetts Broadband Institute has secured funding and engaged outside entities to bring high speed internet to the western part of the state. The Baker-Polito administration’s Fiscal Year 2016 (FY16) capital budget includes an allocation of $19M to The Last Mile project.

Overall, the impact of Internet speeds is growing in the 21st century and is something for not only homebuyers but REALTORS® listing properties to consider. MAR leaders plan to meet with key state official to discuss ways in which the Association and REALTORS® can be helpful in ensuring the expansion of high speed internet to the underserved parts of the state.

Read the full article from REALTOR® Magazine.

Learn more about “The Last Mile” outreach and review the Baker-Polito administration’s capital budget.

(Please note: This blog post was prepared by MAR Legal Staff: Michael McDonagh, General Counsel; Ashley Stolba, Associate Counsel; and Justin Davidson, Legislative & Regulatory Counsel. Edited by Christine Howe, Public Policy and Finance Coordinator)

REALTOR® Association Testify on Behalf of Massachusetts Homeowners at Two Separate State House Hearings Today

mikecorinnehearings
MAR General Counsel Mike McDonagh and MAR President Corinne Fitzgerald testify in two hearings at the State House.

It will be a busy day for the volunteer leaders of MAR as they will be appearing today before two separate hearings at the Massachusetts State House. The outcome of these proposed bills could both negatively impact home values in two separate ways.

The first hearing is in support of Senate 1521, An Act relative to discharge of indebtedness of principal residence from gross income. This bill would bring relief for homeowners who are forgiven some portion of mortgage debt and greatly assist homeowners in avoiding foreclosure. Currently, a seller who goes through the short sale process, would be required to pay tax on the phantom income (the portion of mortgage debt that has been forgiven by the lender), even though no cash has changed hands.

REALTOR® volunteer leadership will also testify in OPPOSITION to Senate 1761 “An Act relative to home energy efficiency.” This bill would require mandatory energy audits and an energy rating at or prior to the transfer of property. Not only would this requirement disrupt sales and have a negative impact on the Massachusetts housing economy, but also stigmatize older and historic homes causing a substantial decline in value.

To see a list of MAR’s 2015 legislative priorities, click here.

Read the entire press release.