January, 2005
Washington Watch
Inspection News and Views from the American Society of Home Inspectors

2004 Elections Mean an Active 2005 for ASHI "Inside the Beltway"


It is difficult to say whether post-election calls for political harmony and moves to the center will have much real impact on either political party. Recent history indicates that positions tend to harden rather than soften. The majority party usually attempts to press its numerical advantage, and the minority fights as hard as ever to avoid being rolled.  

One major impact that may break some of the impasse on the Hill is a larger
voting majority in the Senate. The Senate distribution of 55-45 in favor of the GOP means that the majority will be several votes closer to being able to pass cloture petitions to end filibusters. Regard-less of which party is in the majority, it is easier from a parliamentary standpoint to thwart filibusters with a wider voting margin. Aside from the presidential outcome, this is likely the most important impact of the election. In all cases, we expect both parties to continue the drive to increase home ownership.  

The outcome of the 2004 elections will have a profound impact on the agenda of interest to the ASHI membership. The following are some of the key issues affecting the ASHI membership that we expect in the coming 109th Congress and second Bush Administration.

Leadership at HUD: At this writing, the White House is announcing Cabinet changes. While HUD Secretary Alphonso Jackson was widely viewed as a transitional leader allowing previous Secretary Mel Martinez to run for the Senate in Florida, there is word that the White House is happy with how Secretary Jackson has handled delicate issues like Section 8 cuts. At this time, it looks like Mr. Jackson may retain the top position at HUD, though this could change with any announcement from the White House.  

ASHI has enjoyed a very good audience with the HUD staff during the Bush Administration. We found the staff receptive to innovative ideas offered by ASHI to promote home inspections and clarify the distinction with appraisals. We believe that good dialogue will continue, and we look favorably on staff stability at HUD.     

Contacts with Housing Agencies Other than HUD: HUD is not the only federal agency that plays a major role in home sales issues. In an effort to expand upon the good success ASHI has seen in the last few years with its HUD contacts,
we’re looking to open new relationships with the Department of Veterans Affairs. Rural housing under the Department of Agriculture is another opportunity. ASHI can seek a synergistic effect among the agencies. Messages promoting voluntary home inspection in one agency can serve as precedent in other agencies.  

Leadership on Capitol Hill on Housing Issues: ASHI has put considerable time and effort into building relationships with key lawmakers affecting housing policy. In the coming weeks, both chambers will select leaders for the 109th Congress. The Society looks forward to working with the housing leaders on both sides of Capitol Hill, in a bipartisan fashion. ASHI will meet with key Housing Committee staff to talk about the legislative agenda and discuss ways to seek further support to expand government efforts to promote voluntary home inspections.   

Section 8 Housing Voucher Program: The Bush Administration has restricted HUD funding in the past and is expected to continue the trend as the president’s staff seeks ways to fund war efforts, anti-terrorism, and continue tax cuts.

However, there may be proposed changes to the Section 8 program that might interest the ASHI membership, changes that would alter eligibility for the program and redirect voucher holders toward purchasing homes. The apparent mechanism under consideration would be to encourage voucher recipients to apply their vouchers toward home purchase down payments.  This would be a controversial move certain to draw criticism from advocates for the homeless, but the White House may be able to muster the votes on the Hill to prevail in such an initiative.       

RESPA: ASHI expects HUD to take another run at RESPA reform. There is strong pressure from some groups inside the Beltway to put RESPA back on the table and push hard.    

ASHI should anticipate that bundling will be at issue in any RESPA reform proposal. ASHI’s view is that bundling would be a direct threat to the existing operation and independence of home inspectors, and their access to business.  

With the extra latitude of a second term, the Bush Administration may attempt to take the issue to its conclusion. Bundling has been thwarted successfully in the past with strong political pressure from the Hill, and we would anticipate another effort to mobilize the Hill to oppose bundling, and perhaps an entire reform proposal.  

There have been rumors floated regarding a stripped-down, less comprehensive and controversial version of RESPA reform than might not include bundling. This might alter ASHI’s view toward RESPA reform, but ASHI will withhold judgment and comment until HUD releases some authoritative statement of what such a policy would entail.

Association Health Plans (AHPs):  Legislation allowing AHPs did not pass in 2004, but gained substantially in cosponsorships. AHP legislation is quickly becoming a central issue for legislators who seek to help small business/self-employed individuals. AHP legislation would allow ASHI to bargain for more affordable health insurance and make it available to the membership. This legislation will be reintroduced in the 109th Congress, with President Bush’s support, in an effort to pass it into law. The new vote distribution in the Senate (the choke point for AHP bills) increases the chance for passage. The issue remains controversial, with heavy opposition from some in the insurance industry and from state insurance regulators who regard such a national approach as an infringement on state authority.  

FCC “No-Fax” Rule Interfering with Solicitation of Business: The FCC has further stayed implementation of this new rule, which would prohibit ASHI Members and Candidates from freely communicating their services to prospective clients. The rule is now stayed to June 2005. ASHI supports an outright repeal of the FCC rule or, failing that, legislation on the Hill to prevent implementation. We expect a bill to be introduced early to permanently stop the rule.

This is only a sampling of major factors affecting ASHI’s operations in Washington, D.C. next year. Others are certain to arise going forward. Thus, we look forward to an active year furthering ASHI membership’s interests and pursing a robust pro-home inspector agenda.

Congress Extends Prohibition on Banks Engaging in Realty

(Washington DC) — During Congress’ lame duck session to pass a massive appropriations bill to fund the federal government, both Houses included a provision that will continue the prohibition on financial institutions engaging in realty. The action extends the current prohibition for another year, through FY 2005.

ASHI supports the prohibition and applauds the action by Congress. The Society lobbied members of Congress in favor of the legislation. Further, ASHI issued a Legislative Alert earlier in the year, generating grassroots support for the extension.

Like several other groups that represent realty-related professionals, ASHI is very concerned that the entry of financial institutions into the realty field would greatly disrupt the existing realty business. This could damage the relationships on which home inspectors stake their businesses. If financial institutions were allowed to engage in realty, it is widely believed that they would use bundling of services broadly to cut transaction costs to the bare minimum and eliminate as many potential impediments to home sales as possible. ASHI anticipates that this would work a severe hardship on professional home inspectors, jeopardizing their independence and perhaps their livelihoods.    

ASHI’s view is that the existing realty arrangements are serving the country well, as is proven by the fact that America enjoys the highest homeownership rate in its history. Policy changes such as allowing financial institutions into realty are risky and unnecessary. 

The Society would have been even more pleased if the prohibition had been made permanent. Legislation had been introduced on both sides of Capitol Hill that would have instituted a permanent ban on banks in realty. Both bills received the support of many cosponsors, but the issue remains controversial and in the end the best likely result was the one-year extension.

ASHI expects the permanent ban language to be reintroduced when the new 109th Congress convenes in January. The controversy is expected to continue. The Department of the Treasury and the Federal Reserve have been on record for several years in favor of amending the Bank Holding Company Act of 1956 to define realty as financial in nature and thus a financial service activity. They do so with the strong support of the powerful financial services industry. The Fed and Treasury are expected to maintain that position and are expected to proceed if Congress does not act again to extend the existing prohibition in 2005.  

ASHI thanks the membership for their grassroots contacts with Capitol Hill in favor of the prohibition extension. The Society will continue to support a permanent extension to protect professional home inspectors in 2005.