Realtors Launch Blitz to Block GOP Tax Proposals

By Julie Bykowicz Features Dow Jones Newswires

The long-awaited House Republican tax legislation due out Thursday will touch off a lobbying frenzy as industries fight to preserve pet deductions. But the nation's real-estate agents already are veterans of the battle.

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After House Speaker Paul Ryan (R., Wis.) warned last year that he may not be able to fully save tax incentives they view as crucial to their industry, members of the National Association of Realtors started developing an action plan, the group's officials said.

Among their goals: preserving deductions for mortgage interest and property taxes, both of which GOP lawmakers have targeted as a way to pay for lowering certain tax rates.

The Realtors recently deployed personalized digital advertisements in every district of House Ways and Means Committee members asking constituents to remind the lawmakers not to "let tax reform become a tax increase for middle class homeowners."

The association will expand that effort to Senate Finance Committee members' states by the end of the week, the group's officials said. The 15-second online clips show images of families laughing and playing in front of tidy suburban houses.

Realtors are among the most influential advocacy groups because they are bipartisan, mostly single-minded and work for a valuable nationwide voting bloc: homeowners.

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Ohio Sen. Sherrod Brown, a Democrat on the Finance Committee, said the Realtors' lobbying effort is notable on Capitol Hill "because it's mostly not [from] Washington, and come from all parts of the country."

"The Realtors are small-business people, there are a lot of people in both parties, for a business group they are pretty diverse," Mr. Brown said. "They have a lot of individual personal relationships with a lot of members of Congress."

The National Association of Realtors has spent about $32 million on lobbying so far this year and is routinely a top-three federal lobbying spender, according to the nonpartisan Center for Responsive Politics.

Not only does the association have 25 registered lobbyists, according to federal lobbying records, but it has a membership of more than one million, many of whom respond to the association's calls to action.

"With the narrow margin of Republican control of the Senate, a group like that may have an awful lot of leverage to shape what happens on taxes," said Jim Gould, an independent tax consultant and a lobbyist for most of the past 25 years.

Helping propel the real-estate industry's approach: The last major tax rewrite, signed by President Ronald Reagan in 1986, ended the ability for home developers to deduct real estate losses against other income. The industry later argued that helped lead to a cooler housing market.

"They were the ground-zero industry attacked in 1986, and a lot of people have long memories on that," said Mr. Gould, who was a Senate aide at the time and later chief counsel for the Senate Finance Committee.

President Donald Trump, himself a developer, made personal appeals to lawmakers. In a 1991 congressional hearing, he called the 1986 bill "an absolute catastrophe for the country, for the real-estate industry" and echoed that point in a 1999 opinion piece in The Wall Street Journal.

President Bill Clinton signed legislation restoring those tax breaks for active real-estate developers.

The National Association of Realtors is laboring to prevent history from repeating itself in a slightly different form.

It is using its heft to focus on preserving the mortgage interest and property tax deductions. The group is also concerned that doubling the standard deduction as proposed would make it less likely for homeowners to take advantage of those deductions, which incentivize homebuying and higher home prices because owners know they will pay less in taxes. That, in turn, benefits Realtors, who earn commissions from home transactions.

The influence campaign began in earnest in May, when the Realtors circulated a study favorable to their industry. It intensified in recent weeks, with not only the digital ads but a call to action for its members, which in just the past week deluged Capitol Hill with 105,000 emails, the group's officials said.

With Republicans aiming to speed tax legislation through the House by Thanksgiving and get it to Mr. Trump by the end of the year, "we didn't feel like we could wait," said National Association of Realtors Vice President Jamie Gregory.

The National Association of Home Builders announced last weekend that it would oppose the tax legislation as well, after months of expressing openness to changes in mortgage-interest deduction. Unlike the Realtors, the home builders benefit from both strong homeownership and rental markets.

Home Builders Chief Executive Jerry Howard said the group will be talking to the Realtors and other potential partners to join efforts. The builders' group said it is working on a social media effort to amplify its message and has other digital efforts ready to go when the bill is released.

"We're disappointed about the affect we think this will have on the middle class," Mr. Howard said. "And we are not giving up on the notion of getting tax credits back in."

--Natalie Andrews contributed to this article.

(END) Dow Jones Newswires

November 01, 2017 17:16 ET (21:16 GMT)