August, 2008
Washington Watch
Inspection News and Views from the American Society of Home Inspectors



Special Report: ASHI Lobbying for You in Washington

RANDALL PENCE

More than ever, Washington, D.C., is bustling with activity that will affect every ASHI member in the country. Mortgage/foreclosure/housing issues are at the top of the government agenda. Lobbyists for the home sales industries are canvassing official Washington, advocating solutions that are tailored to benefit their particular industries.   

ASHI is fully engaged in this competitive environment. It is working behind the scenes to influence federal policies that will certainly affect the profitability and future business opportunities for home inspectors. ASHI is concentrating its strongest efforts on niche issues on which it can have the greatest impact. It is focusing its resources in ways designed to achieve maximum effect by leveraging its strategically cultivated relationships with stakeholder coalitions and with targeted government entities.

VFHCapitol2.jpg In late June, ASHI President Brion Grant joined Randall Pence of Capitol Hill Advocates, ASHI’s federal lobbyist, for a fast-paced series of lobbying meetings to help show the ASHI flag on Capitol Hill and in selected federal agencies — even in the executive office of the president. Photo: ASHI’s federal lobbyist Randall Pence (left) and ASHI President Brion Grant  (right) on the steps of the U.S. Capitol.


By reading this narrative, you may join ASHI on a lobbying expedition through the key corridors of power in the nation’s Capitol, corridors that most citizens rarely see.

As you peer through the government veil, bear in mind that leaders in government have no practical experience with home inspection; they need ASHI’s expert input to craft intelligent legislation and regulations affecting home inspection. ASHI is happy to fulfill this advisory role. But ASHI’s overriding mission is advocacy: promoting the home inspection profession and lobbying to protect the interests of ASHI members.

Day one of the two-day meeting schedule

U.S. Senate, Capitol Hill; June 24, a.m.:  

VFHSen-Kyl.jpg Representing ASHI, Grant and Pence hike through the halls of the U.S. Senate office buildings, paying constituent visits to the offices of several senators, including the two candidates for president. ASHI makes constituent visits with staff for Sen. Richard Durbin (D-IL) and Sen. Jon Kyl (R-AZ), as well as Sen. Barack Obama and Sen. John McCain. Photo: ASHI President Brion Grant  (right) meets with Sen. Jon Kyl
(R-AZ)  in the U.S. Senate to increase awareness of ASHI’s policy positions  regarding key home inspection issues.


ASHI briefs senate staff on its policy positions regarding several key issues that affect business opportunities for home inspectors, most notably: 

  1. The mortgage/foreclosure crisis and proposed remedies that ASHI supports or opposes
  2. HR4776 — the Consumer Protection Home Inspection Act, a bill offered by ASHI
  3. ASHI concerns about a RESPA* proposal for “packaging” of settlement services
  4. A possible IRS “Tax Gap” plan to force clients to withhold consultants’ income tax
  5. ASHI support for a temporary home purchase tax credit to stimulate home sales
  6. ASHI support for a more reliable “safe harbor” version of the home office deduction
  7. ASHI support for affordable health insurance for small business/the self-employed

ASHI makes the political point that the association has nearly 6,000 members across the United States, with members in most congressional districts; that home inspection is a form of consumer protection, and it should be regarded favorably in that light; that the home inspector may be the only home sales professional acting on behalf of the homebuyer; that the home inspector’s independence and freedom to offer frank reports are important and should not be compromised.

During the course of the morning constituent visits, ASHI hears a theme that recurs throughout the day: Many of the misunderstandings that exist in the marketplace today about home inspection also exist among policymakers. There is a clear continual need to educate new lawmakers and staff that home inspections are voluntary rather than mandatory, that home inspections do not happen automatically, that home inspectors provide unique services and loyalty to homebuyers that other home sales professionals cannot provide, and more.

Notably, several congressional staff mention in passing that they have bought homes using home inspectors, that they benefited from the home inspection, and they would never buy a home without a home inspector on their side.

Chief Counsel for Economic Regulation & Banking, Office of Advocacy, Small Business Administration (SBA), 2:30 p.m.:  
The SBA Office of Advocacy exists to protect, strengthen and represent small businesses within the federal government’s legislative and rule-making processes. ASHI aims to amplify its message by persuading the SBA to adopt ASHI views in SBA communications to Congress and the agencies. 

The SBA recently submitted comments regarding the Department of Housing and Urban Development’s RESPA proposal with concerns that echo ASHI’s warnings about “packaging” of settlement services. ASHI argues that packaging could create conflict-of-interest pressures for home inspectors. The SBA’s concerns were based on the notion that packaging by large settlement firms would displace small local settlement services firms — a purely economic argument. But ASHI offered the SBA an additional consumer protection argument: Packaging could force home inspectors to sacrifice their loyalty to the homebuyer in order to secure future business income from packagers. If this is true, then the packaging proposal could actually hurt homebuyers rather than help them (it is assumed that packaging would lower settlement costs to homebuyers).

In addition, ASHI mentions it has requested that HUD add a question line in the proposed new HUD-1 and Good Faith Estimate (GFE) documents asking homebuyers if they choose to obtain a home inspection. The purpose of the question line is to prompt homebuyers to consider a home inspection as soon as possible.

SBA counsel is intrigued with both ASHI arguments and is clearly interested in using them.    

Further, ASHI mentions its support for HR4776, the Consumer Protection Home Inspection Act, which would require HUD to upgrade its housing counseling programs to include specific details about home inspection and the advisability of obtaining a home inspection. SBA counsel seems persuaded by the concept. At ASHI’s request, counsel agrees to “run the traps” on HR4776 to see if the office might be inclined to offer behind-the-scenes support, though the office rarely does so publicly on legislation. Counsel asks fervently that ASHI keep SBA apprised of its actions regarding HR4776.

In closing the meeting, ASHI advises the Office of Advocacy to monitor for proposals from the IRS/Treasury to reduce the “Tax Gap” by requiring clients of contractors to file reporting forms (1099s) and worse, to withhold a portion of the fees paid for tax withholding. Such a proposal would have a terrible impact on home inspection firms, yet there are quiet indications that the IRS would like to implement such a policy to raise revenues without increasing taxes.

U.S. House Financial Services Committee staff, Capitol Hill; 3:15 p.m.:  
ASHI meets with House Financial Services Committee staff responsible for housing legislation that is referred to the committee. ASHI seeks to discuss details, merits and prospects for HR4776. Committee staff grill ASHI intensely about the details of the bill and how it might fit with existing HUD counseling programs. But in the end, staff seem generally satisfied with ASHI’s answers and sympathetic to the intent of the bill. HR4776 would direct HUD to train its counselors to dispel common misunderstandings among homebuyers regarding home inspections — misunderstandings that prevent homebuyers from obtaining home inspections.

ASHI describes HR4776 as a low- or no-cost, non-controversial, straightforward remedy that does not require a massive new bureaucracy to implement it. ASHI requests that the committee consider whether the bill might be suitable for expedited action as an amendment to a larger must-pass bill later in the session. ASHI further offers to provide a witness and testimony in case the committee wishes to hold a hearing on HR4776. ASHI informs committee staff that it has sought SBA Office of Advocacy support for the bill, and will be seeking HUD and White House support soon.

Committee staff ask ASHI to check with certain interest groups in Washington, D.C., to determine whether there may be opposition to the bill and report these findings to the committee for further discussion.

In closing the meeting, ASHI mentions its two RESPA issues regarding packaging and the HUD-1 and GFE question lines, and suggests that the committee keep these issues in mind if it holds oversight hearings on RESPA. ASHI also mentions its work with a coalition to seek a temporary homebuyer tax credit for purchasing a home to motivate buyers to return to the realty market.
This snapshot of ASHI’s lobbying efforts on the Hill will continue in next month’s ASHI Reporter, with a report on the meetings that took place on the second day of ASHI President Grant’s visit to Washington on behalf of ASHI members.

Members received the full special report in July’s The Inspector e-newsletter. If you are a member of ASHI, you should know that you have a Washington lobbyist looking out for your interests in Washington, D.C.

Read more next month.