Home Real Estate The Minneapolis Association of REALTORS Takes A Step into the Unknown

The Minneapolis Association of REALTORS Takes A Step into the Unknown

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From Star-Tribune’s article on the marriage amendment in Minnesota

Earlier today, I got a press release from the Minneapolis Area Association of REALTORS (r) (MAAR) about an official stance of the organization on a statewide ballot initiative:

Minneapolis Area Association of REALTORS® Opposes Minnesota Marriage Amendment Proposal

The Minneapolis Area Association of REALTORS® (MAAR) officially announces its opposition to the proposed state constitutional amendment defining recognized marriage as only between opposite-sex couples.

The Association’s position, adopted by the volunteer Board of Directors, is based on the amendment’s negative impact on equal access to housing and property rights in Minnesota. MAAR recognizes that a culture of openness and acceptance is vital to a healthy real estate industry, and overall economy, in the Twin Cities. Ultimately, the proposed amendment limiting the definition of marriage in Minnesota would enshrine an inherent unfairness and system of inequality, specifically related to housing and homeownership, into the Minnesota constitution.

MAAR has long lead the way on diversity and fair housing issues within the local and national real estate community. Most recently, the association, lead by a core group of volunteer leaders, championed changes to the National Association of REALTORS® Code of Ethics–Article 10 in 2010 and 2012 to add sexual orientation and gender identity to its list of protected classes. The Code of Ethics is the professional moral standard by which every REALTOR® pledges to conduct him/herself, and states that a REALTOR® shall not be party to any plan or agreement to discriminate against any person on these grounds.

“Our Association leadership believes this issue strikes at the heart of our organization’s commitment to fair housing, a strong code of ethics and equal opportunities for all,” said Mark Allen, Chief Executive Officer of MAAR. “The rights and privileges of homeownership extend beyond the actual sale of a home, and passage of this amendment would deepen the inequality of access to those rights for couples whose unions are not legally recognized.”

The Minneapolis Area Association of REALTORS® (MAAR) is a professional trade association that provides education, advocacy, and industry resources to nearly 7,000 local REALTORS® in Hennepin, Carver, Scott, McLeod and Sibley Counties.

I spoke with Julia Parenteau, the Government Affairs Director at MAAR, about this announcement because there’s something hitherto unseen here. While I personally support the policy of same sex marriage (as long as it is done legislatively, instead of by judicial fiat), the step into the unknown here is that of a REALTOR Association taking a position on a “social issue”.

There be some unknowns here, matey, yarrr.

Issue #1: What Is Outside the Purview of REALTOR Associations?

In this case, the Board of MAAR decided that there is enough of a connection — “nexus” in legalese — between same-sex marriage rights and housing and homeownership that it wanted to take a stand. The question is, if same-sex marriage is connected to housing and homeownership, is there anything that isn’t connected in some way?

This is the first issue I raised with Ms. Parenteau: is there is any limiting principle on what topics MAAR — and by extension, REALTOR Associations generally — would and would not get involved in.

The answer appears to be No, there is no limiting principle. In theory, an Association would only get involved in a political issue if there is a connection to housing. But she agreed that virtually any topic, any issue, and any policy can and does affect housing. Whether the connection is obvious (e.g., transfer fees for sales of real estate), less obvious (e.g., regional transportation programs, economic development, etc.), or even less obvious (e.g., same-sex marriage, illegal immigration, foreign wars, etc.), just about everything political and governmental can be connected to housing.

For example, she noted that MAAR declined to take a stance on the other ballot initiative in Minnesota, which has to do with Voter ID. But one can easily make the argument that requiring Voter ID might discourage certain disadvantaged minorities from moving into the area, resulting in lower demand for housing, or that requiring Voter ID would potentially discourage people from certain neighborhoods from voting, resulting in less political power, which then influences allocation of local or state funds to those neighborhoods, which then depressed home values.

What is apparent is that there really is no limit to topics that touch on housing. All is left to the discretion of the particular Association and its leadership.

Ms. Parenteau stated that in this case, the Board thoughtfully discussed the issue at some length, looking at it from a variety of angles, and decided that the nexus was enough to warrant an official stance. The Board made sure to speak with a number of members, communicated its thinking with a variety of stakeholders, and then chose to take this stance. Whether the Board would do the same in some future issue, of course, is unknown, and Ms. Parenteau declined to speculate. (And I don’t blame her for not speculating on such a possibly touchy topic.)

Nonetheless, by taking this step, it is clear that MAAR has set a precedent for other local and state Associations to get involved in issues that until now have been considered “social issues” and not really something with which a trade organization would concern itself.

The unique nature of the REALTOR Association, concerned with something as fundamental as housing, means that of all the various trade associations out there, it numbers among the few that could make the case for getting involved with just about any “social issue”. I can only think of two others who might be able to make the same nexus argument: American Bar Association and the American Medical Association.

Issue #2: Pragmatic Politics

The second issue is whether a REALTOR Association getting involved in issues normally not considered to be a “real estate issue” would help, hurt, or neither in its other lobbying efforts. Would legislators or citizens otherwise inclined to side with REALTORS on issues like transfer fees or tax status of real estate agents possibly decide to go the other way because REALTORS took a position on a “social issue”?

Ms. Parenteau, as a political professional, assured me that in the lobbying circles, politics is not personal: it is business. She did not feel that this move hurt MAAR’s ability to work with legislators or other interest groups on other issues, nor did she feel that it helped MAAR particularly. The effect will be neutral. It is common for the Association have a shouting match with a legislator on one issue, and then work together on a different one the next day.

Nonetheless, in prior situations, a REALTOR Association typically did not involve itself with controversial social issues. MAAR has in this case. Whether such a thing really would have no impact one way or the other, when passions run high on both sides of the issue, will be answered in the months and years to come.

For what it’s worth, MAAR did take the local political environment into account. Minnesota and more importantly, the Minneapolis-St. Paul region, are both bastions of progressive liberalism. Obama holds a comfortable 5.3% lead over Romney, for example, in the latest polling, and Obama carried Minnesota in 2008 with a 10.3% margin of victory over McCain. This particular stance may prove to be very popular in MAAR’s local area.

Issue #3: Conflict Between Associations

The third, and frankly the most interesting issue, is what this could mean for the structure of the local-state-national Association of REALTORS.

With the typical issues that a REALTOR Association gets involved in, there’s very little day light between Associations at any level. For example, there is no REALTOR Association anywhere in the country that I know of which supports transfer fees on home sales. There is no REALTOR Association that I know of which believes the mortgage interest deduction should be eliminated.

Even when there is some disagreement, the issues tend to be economic and therefore far less passionate than social issues. Whether to fund a light rail or not is not normally the stuff of huge rallies.

With this step, however, MAAR has taken an official stance on a controversial issue. There is bound to be disagreement even amongst REALTOR Associations on controversial social issues.

Question is, how are those conflicts to be resolved, if at all?

What I asked Ms. Parenteau was whether the Minnesota state association had any sort of process in place if there is a conflict amongst the local Associations. Suppose for a moment that St. Cloud Association of REALTORS, which lies in the 6th Congressional District represented by Michele Bachmann, decides that if MAAR is going to oppose the Marriage Amendment that it will support it. She was unaware of such a process.

From the State Association’s point of view, having local associations on the other side of an issue is probably not helpful when it goes to talk with state legislators. It’s hard to present a unified front when your own local associations are taking opposite positions. But according to Ms. Parenteau, there is no mechanism, procedure, or governing body that would resolve conflicts among the local Associations.

For that matter, there is no mechanism or procedure for NAR to resolve conflicts among the state Associations.

One can very easily imagine the California Association of REALTORS coming out in support of same-sex marriage, while the Alabama Association of REALTORS would oppose it. Until now, there has been little reason to think that either would come out with an official position on a “social issue”, but… things done changed.

One issue here is that the local/state/national structure of the REALTOR Associations is not a tightly unified structure. MAAR, for example, is not a subsidiary of the Minnesota Association; it is an independent entity that agrees to certain things, but it isn’t as if the Board of the Minnesota Association can simply overrule MAAR’s Board as a State legislature could overrule Minneapolis City Council.

If they haven’t scheduled time for it already, might I suggest to the good people of NAR that they might want to have a meeting in Orlando about the possibility of setting up some sort of adjudication/arbitration mechanism to resolve conflicts amongst state and local Associations on political issues like this?

Departing Thoughts

I need to run to a meeting, so will need to leave you all with some final thoughts but no answers (as is typical for me).

I believe that MAAR will either prove to be a pioneer or a pariah in taking this step. Either a whole lot of local and state REALTOR Associations will start taking positions on “social issues” connected to housing, or they will all resolutely refuse to get involved with anything that isn’t directly on point to real estate, transactions, and housing.

For example, I wonder what the Phoenix area REALTOR Associations think about Arizona’s anti-illegal immigration legislation, since that has a far more direct impact on housing, home values, and rental rates than does same-sex marriage.

I also wonder if this would have any impact on the membership. With political opinion as divided as it is today, and divided even more so on social issues than on any economic/pocketbook issues, MAAR’s move here will either be a brilliant one of uniting the membership closer together, or a disastrous one that could cause rifts within the membership. There is little doubt in my mind that no matter how much an Association can justify opposing abortion (“fewer babies means smaller houses, and fewer home sales”), if one were to do so, it would instantly lose a very large part of its membership — or at the very least provoke a real organizational leadership challenge.

Finally, I wonder if there really is such a thing as a too-distant nexus to housing. No matter how fervently one believes in a particular cause, and can establish a connection to housing, is there such a thing as “that ain’t a housing issue” for a REALTOR Association? If so, what is the principle that would govern whether an Association should or should not take a stance?

Your thoughts are particularly welcome on this one.

Gotta run.

-rsh

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Rob Hahn
Managing Partner of 7DS Associates, and the grand poobah of this here blog. Once called "a revolutionary in a really nice suit", people often wonder what I do for a living because I have the temerity to not talk about my clients and my work for clients. Suffice to say that I do strategy work for some of the largest organizations and companies in real estate, as well as some of the smallest startups and agent teams, but usually only on projects that interest me with big implications for reforming this wonderful, crazy, lovable yet frustrating real estate industry of ours.