I need to explain homeownership to the National Association of Realtors. For one, it isn’t just about tax breaks.
That doesn’t mean I am in favor of the current tax bill proposal. I just think people should know more about homeownership, and that NAR should take a closer look at what I consider to be a bigger problem: the fact that there are many dues-paying Realtors who are being negatively affected by our dysfunctional health insurance system.
The emails from NAR and from my local associations have been coming fast and furious. They warn about “tax hikes for the middle class.” The subject lines in the emails are twisted and misleading about harm to middle-class families.
Subject lines claim that the middle class and homeownership are under attack. That almost makes sense if you believe the only reason to own a home is to get a tax deduction, and if that is the case, you need to have a large income and to own an expensive home to get the deduction.
When I responded to the emails with facts and figures, the senders supply more misleading information and accuse me of not being in favor of homeownership.
I am totally in favor of homeownership, and I know that owning a home is a way to build wealth, and for the middle class, it has been one of the only ways to build wealth.
It is possible to be in favor of homeownership, against the proposed tax system — and also see that there’s more going on here.
A complex tax system
The middle class is an undefined group. Realtors often toss around figures like $50,000-$200,000 to define the “middle class,” though those numbers seem to vary based on one’s location. Yet according to 2014 stats by PEW Research Center, about 95 percent of Americans bank under $161,000 per year — 90 percent are under the $114,000 mark.
I find the math all very confusing, but we need to remember that NAR leadership, lobbyists and management are probably all in that top 5 percent.
The NAR propaganda tells us that the tax breaks some homeowners get make homes more affordable. The idea of affordability, in this case, is a half-truth. The homes still cost as much, and the same income level is needed to qualify for a mortgage.
Those who cannot afford to buy a home are not helped by the tax advantages, and those who can afford a home and can itemize might pay less federal income tax.
Even with the tax deductions in place, homeownership has reached a 50-year low, and it isn’t because the wealthy have stopped buying homes. Some point to racial inequality as a reason for the drop. I am not sure if NAR is going to take that one on.
A more pressing problem
While NAR fights for tax breaks for the wealthy or at least the not-so-middle class, NAR members struggle under the weight of huge health insurance payments. Health insurance has become one of the biggest rip-offs of our time. Insurance companies have come between us and our healthcare providers.
Individuals get to pay a huge amount of money for the same insurance that members of groups get for less. When I add up all that I pay for my very expensive yet crappy bronze plan and divide it by services that I receive, my flu shot ends up costing about $3,000.
I know several Realtors who do not have health insurance. Most make enough money that they can cover the monthly payment but would rather pay the fine. I am not sure if I will buy health insurance in 2018. I can pay for it, but I hate the idea of sending more money to the insurance company.
You would think that an organization like NAR with so many self-employed members would take more of an interest in health insurance and maybe start a campaign about the impact of high health insurance costs on middle-class families.
There is so much more to homeownership than tax incentives, and I think NAR should be made aware of that. I am concerned that the propaganda will backfire, and if the tax breaks go away, people will believe homeownership is a bad investment.
The value in homeownership
As a homeowner myself, my family is paying about 450 percent less a month on housing than we would be spending if we rented a similar house in the same neighborhood. Our home gives us stability and a little security. It is an asset that has appreciated in value over time.
I look forward to hosting many more Thanksgiving dinners in our home, and I look forward to putting up the Christmas tree for years to come.
My children come home for holidays, birthdays and family celebrations. We have had graduations parties in our yard, and there are pictures of our daughter and her prom date standing in front of the lilac bush; the very same lilac bushes the kids gave me one Mother’s Day and then planted so that when I look out the kitchen window I can see them.
If homeowners lose tax breaks associated with homeownership, we can still promote homeownership and sell real estate. I would be happy to help NAR build a campaign to promote homeownership that’s not based on tax breaks.
After all, there’s no place like home.
Teresa Boardman is a Realtor and broker/owner of Boardman Realty in St. Paul. She is also the founder of StPaulRealEstateBlog.com.
