The party is not over for NAR — ‘at least not yet’
A new report describes the political might of NAR, its lavish efforts to protect it, and risks to its future posed by the government — and its own actions.
Key points:
- NAR’s power is at risk from the DOJ’s examination of the association’s control over real estate data.
- Tens of millions of dollars are spent by NAR each election cycle to protect real estate interests.
- The story was produced by a nonprofit news entity launched earlier this year with a focus on the U.S. government.
A new investigation draws from thousands of documents as well as interviews with 20 current and former NAR staffers to paint a picture of the association as a powerful force facing snowballing threats that jeopardize its very existence.
The story is by NOTUS, a nonprofit, nonpartisan news organization launched in January with the goal of providing "honest reporting" about the United States government. And it provides a look at the industry and its influence from the Washington, D.C., perspective.
Unlike other coverage of the real estate industry, the report by NOTUS does not diminish the impact or influence of real estate agents, instead describing Realtors as "a dominant force in American life."
It provides details about Kenny Parcell's turbulent turn as NAR president before his resignation last August, as well as the lavish lengths the association has gone to in cementing its power as the nation's largest trade group.
That power is at risk, the authors argue, citing the NAR settlement as one reason, along with the fact that the Department of Justice is "examining the organization's control over real estate data, among other issues, according to people at NAR."
NAR's political reach — and what it takes to fuel it
The National Association of Realtors is one of the heaviest hitters in U.S. politics, the article explained, pointing to its annual revenue of more than $300 million.
NAR spends tens of millions of dollars every election cycle, on races from the school board to Congress. And it does so "through a dizzying array" of channels: political action committees (PACs), state and local real estate associations, and groups with "anonymous sounding" names like Alliance for a Better Pennsylvania.
The association works to protect the real estate profession as well as the health of the housing market and property owners' rights. It gives to Democratic and Republican politicians, the article states, while also pointing out notable alignments with Republican interests and $4 million in dark money donations to groups promoting GOP policies, according to the report.
Thousands of Realtors and their allies serve in public office, and the article says NAR supports them with money and training.
"The party is not over for the Realtors — at least not yet," the article states. "The association continues to press on in Washington, taking out ads in Politico Playbook and plowing ahead with its annual May fly-in for Realtors to meet with members of Congress. On Capitol Hill, lawmakers recently formed a Bipartisan Congressional Real Estate Caucus with support from NAR and others. But the organization's future has never been more in doubt."
NAR spokesperson Suzanne Bouhia told NOTUS that NAR proves its value with "industry leadership, innovative tools, educational opportunities, leading economic research, national property data, and other benefits."
Where else does the money go?
The article describes NAR as a place where "staff who had worked at cash-strapped nonprofits were now spending freely, renting out sports stadiums or an entire theme park at Universal Studios for members — especially those who made political donations."
And elected volunteer leaders pursued pet projects like planting more than 1.5 million trees to represent each member and the NAR's commitment to the Earth, or commissioning a song about Realtors, the article stated.
"The high-flying lifestyle — the trips abroad and robot-fueled ragers at the Fontainebleau — was ultimately funded largely by dues from regular, rank-and-file Realtors," the article stated. "Those Realtors are usually required by their brokerages to pay dues to their local, state and national Realtors' associations, and in exchange they get access to the MLS."
Will the DOJ diminish NAR?
The article suggests that the NAR settlement, the outcome of the DOJ's investigation, and a challenge from a new association "will drain NAR's largest source of cash — its Realtors."
People within NAR said the DOJ has been talking to Realtors about the MLS, and the article suggests that "breaking real estate associations' hold on the MLS could give a boost to home sellers who do not belong to their local association, like discount brokers and owners who sell themselves."
Why does that matter? Because most professionals — doctors or lawyers for example — don't need to be a member of an association to do their jobs.
"If Realtors have more options for what to do with their listings and what — if any — professional association to belong to, NAR's membership could plunge to levels more akin to the American Medical Association or the American Bar Association, crushing the organization as we know it," the article stated.