Sunday, January 6, 2008

Series: Post #3 Meet THE MAN! The PAC Purse Strings and much more...

Christopher J. Kyler

Education: Chris Kyler received his Bachelor of Arts degree in political science from Brigham Young University, and his Juris Doctor degree from the J. Reuben Clark Law School. In law school Chris was designated a national member of the Order of Barristers for achieving excellence in courtroom advocacy. He is licensed to practice law in Utah and California. He is a member of the American Bar Association and the American Society of Association Executives.

Experience: Chris is not only a full-time lobbyist, but is also serving as General Counsel and CEO for the Utah Association of Realtors. In the Firm's government relations practice, Chris is responsible for creating and managing the legislative advocacy efforts of his clients, including legislative drafting, campaigning, fund-raising, PAC money disbursement, and lobbying. He is also a frequent speaker in meetings across Utah where he helps business leaders and their staff members better understand the legal and political.

Mr. Kyler is the head of the Utah Realtor Association. Just about every thing you will learn in the following article about Utah politics as it relates to the Real Estate business interests goes through him. He is the CEO and General Counsel and one apparently ultimately responsible and you will hear from him often in the feature article from the Governing Magazine/June 2006, which graciously consented to my reproduction of this excellent bit of copyrighted journalism, entitled:
Utah Association of Realtors

The real estate lobby is under serious competitive challenge, but no pressure group is better at bending legislatures to its will.

By Alan Greenblatt

During a hot market, it sometimes seems as if half the people you meet are thinking about getting a real estate license. But what do Realtors dream about doing next? If they live in Utah, they may be dreaming of a career in politics. Chris Kyler, CEO of the Utah Association of Realtors, sounds quite animated as he counts off the many members of his organization who hold high office in the state. "I've got people who are on county commissions, mayors, state senators," Kyler says."Our lieutenant governor was president of our state association about 20 years ago. Our people are involved in the parties, too. We've got precinct chairs and vice chairs and county delegates throughout the state." No fewer than 22 people who make their living in real estate also serve as members of the Utah legislature. Not surprisingly, Utah has some of the toughest real estate laws in the country--protecting both private property rights and the business interests of Realtors. When the Realtors hope to get favorable legislation passed, they know there is one legislator in particular who will lend a friendly ear. Al Mansell was president of the Utah Senate until he dropped his leadership role to serve a one-year term as president of the National Association of Realtors. Still in the Senate, Mansell has since sponsored bills avidly sought by his profession. The most important may have been a new law that clamps down on discount brokers who have undercut the larger commissions collected by Realtors. "Did I feel a conflict of interest?" Mansell says. "No, what I felt was a strong push by many of my colleagues."

Mansell's colleagues in the real estate business are capable of providing that strong push in every state in the nation. Realtors have their fights in Congress and at the local level, but much of their lobbying energy is spent in state capitals, which is where they are primarily regulated. Utah might have the most Realtors serving as legislators, but there are Realtors in virtually every legislative district in the country--and they make their presence felt.

There are other interest groups that can match them for geographic spread, such as teachers' unions and restaurant associations. And many other occupations are well represented in the corridors of legislative power. No one finds it unusual when a university administrator, for instance, chairs a committee that oversees her primary employer. But few lobbies can match the Realtors for numbers, financial wherewithal--and effectiveness. Whenever an issue involves the transfer of property--and that extends to fights over property taxes, roads, schools, utilities, water policy and a whole host of other questions--Realtors come out in force. "You're talking about guys who are on a first-name basis with a lot of legislators," says John Tuccillo, an industry consultant and former chief economist for the National Association of Realtors. "You're talking about access, and once you have access, you can make your point." Because their industry is now under more competitive pressure than at any time in recent history, Realtors have stepped up their game.

Utah is one of 10 states that have approved new laws or regulations over the past two years that require real estate agents to provide a minimum level of services. More states are likely to follow suit. These minimum-service bills pose a direct challenge to the discount brokers who have sprung up in large part on the Internet. The newcomers present a challenge to Realtors' traditional ability to charge 6 percent commissions on the sale of every home--now worth upwards of $10,000 per sale in most of the country. Web giants such as Google and have joined the parade of sites that are listing homes, leading some to predict that consumers will increasingly turn to the lower-cost options, making real estate agents obsolete, the way travel agents have become in the era of Internet airline bookings. "Their very profession is about to join the endangered species list," the authors of the popular book"Freakonomics" claimed recently in the New York Times.

But it might be too soon to bet on that scenario, and the reasons are the involvement of Realtors in the political process and the protections they have already crafted to stave off the threat. The many state rules governing their profession, including the newly created ones such as minimum-service requirements, serve as serious barriers to entry, helping Realtors preserve their control over the market.

In the opinion of critics, the rules mean both higher fees for Realtors and higher prices for houses. For Robert Lande, a professor at the University of Baltimore School of Law who is associated with the American Antitrust Institute, the new minimum-service laws are merely the latest phase in a permanent campaign by Realtors to keep a stranglehold on property transactions. "They've got a sweet deal,"Lande says. "You fix the rules of the game to insulate each member from hard competition." Most worrisome from the Realtors' point of view, their critics now include the Federal Trade Commission and the U.S. Department of Justice. Both of these federal agencies accuse Realtors of engaging in anti competitive practices, and have lobbied against the new state laws. "At a fundamental level, they reduce consumer choice," says John Read, a litigation section chief in Justice's antitrust division."There are a number of consumers who would like to save some money by not having to pay for mandated services that they're being forced to buy under these bills."

PICKETT'S LAW There's no disputing that discount brokers are out to change the rules of the game. Many of them will list a house for as little as $500 on a multiple-listing service (MLS)--the database of homes for sale that is the life's blood of the residential real estate industry. Often, that is all the discount broker will do. The homeowner is responsible for hosting the open house, fielding and negotiating bids, and handling all the paperwork. Some discounters will answer questions or perform a limited menu of services for set fees. But Realtors claim they still leave consumers, who don't understand just how complicated the process of selling property really is, exposed and unprotected. Like Mansell in Utah and several of the other sponsors of minimum-service bills, Texas state Representative Joe Pickett has worked in real estate. He says he was inspired to write his bill by his own experience and frustration in dealing with discounters who don't meet their customers' expectations. "It's been kind of a pet peeve of mine," Pickett says. "If you say you're a licensed real estate agent in the state of Texas, there ought to be a minimal number of things that you do." All Pickett's law does, he says, is protect unwary consumers. But the concern of the federal agencies is that state legislation, once passed, has the effect of shielding Realtors from antitrust complaints. "[Federal] antitrust law does not overrule state law or state agency regulation in most cases," says Norman Hawker, a business professor at Western Michigan University, who organized a symposium on real estate practices for the American Antitrust Institute last fall. "So you're seeing lobbying by Realtors to get laws in place that would probably be illegal if they were private agreements between them, like the full-service laws." The Department of Justice settled an antitrust case involving commission rebates with the Kentucky Real Estate Commission last year, but still has a suit pending against the National Association of Realtors, challenging the listing rules that Justice says hamper competition. The Realtors changed their rules in answer to the suit, but Justice then filed an amended complaint. It's unusual, though not unheard of, for federal agencies to involve themselves in the legislative debate over state laws. What is truly rare is for Realtors to face such heavy-hitting opposition. They have been engaged for years in a multimillion-dollar fight in Congress with mortgage bankers, who are seeking their own piece of the real estate action. But at the state level, there's almost never an adversary of much heft standing in opposition to Realtors. Ask lobbyists for the industry to name a time they failed to get their way and the only sound you hear may be a long pause. Chris Kyler has been with the Utah Association of Realtors during the state's last seven legislative sessions. "Of the bills that we've opposed since 1999, we've been able to defeat 100 percent of them," he says. "We either defeated all of them or we amended them so that it made our position neutral." The group's rate of success on bills it actively supported isn't quite as high, Kyler says, but it's still "well over 90 percent for seven years running."

Mach man says:

Sort of makes you pause to wonder just who is running our State, for what purpose and what can we do about it? Does it not?....

Stay tuned for more. I want you all to read and come to know what these people have been doing to any early discussions or preliminary proposals or draft bills in committee. I want you to wake up to the realities of the past ten years and why we have come to this sad overly taxed end.

Be patient. I will continue with this series and then toss in a few other informational goodies.


D-Bell, aka Minor Mach man


Jeremy said...

I think you're dead wrong in many of your complaints about "Truth In Taxation" and the changes you want to make in the process of assessing property in our state. If counties were to assess every parcel every year 99% of the problems faced this year in Utah's counties wouldn't have existed. Ensuring yearly reassessment is the legislative fix we need.

I think you're absolutely 100% right in calling out against the power our state has given Utah Association of Realtors. It really is disgusting.

The #1 fix that would make yearly re-appraisal of all parcels in the state cheaper and more accurate for our counties would be for Utah to get rid of its non-disclosure status for real estate transactions. This ill-conceived policy provides realtors with a near monopoly on market data and it creates an inherently unfair property taxation system. Non-disclosure will never be overturned while realtors maintain their current level of legislative power.

Thank you for posting this article...and even though I disagree with you on some topics I have to give you kudos on your great blog!

Minor Machman said...

Jeremy. Thank you for your honest response. On the full disclosure issue: assessors have the purchase price within a week whether you or I tell them or not. It comes through the "back door channels" of the MLS software which all assessors have access too. It only takes one assessor who is a member of the Realtors Association or a Broker's license to have it. So "Full disclosure" is in realty a non issue. Secondly, honest assessors will admit freely that "full or current market value" is impossible to appraise or assess. So why do we ask them to do the impossible? Why have a front loaded contentious tax system which penalizes homeowners for upkeep and improvements? If you really study the TNT system you see the insanity of it. About 46 other States already have. But appreciate your input very much. And thanks for the compliment.