Voters around the country did more than choose a president at the polls last week. They also voted yes or no on nearly 176 ballot questions in 38 states, according to Ballotpedia, an online collaborative encyclopedia sponsored by the Lucy Burns Institute, a Madison, Wis.-based nonprofit.
While high-profile referendums on social issues got most of the attention during the election season, other ballot questions dealt with land use, property taxes, infrastructure spending, and other issues affecting builders and real estate. Overall, the NAHB monitored 21 measures in 13 states this fall, including Alabama, Arizona, Florida, Louisiana, Maine, Michigan, New Mexico, Rhode Island, South Dakota, and Virginia.
One hot topic: property taxes. Florida voters had several such amendments on their ballot, which asked citizens to decide whether to give a break on property taxes to low-income seniors, disabled veterans, and spouses of military veterans, police, firefighters, and other first responders who died in the line of duty. All three of those passed, despite an estimated total cost of $45 million in the first three years, according to the League of Women Voters, who advocated against the tax breaks. But that price tag is low compared to the $1 billion estimated cost of a measure (Amendment 4) that would have limited the percentage that a real estate assessment could go up, prohibited a real estate assessment from increasing if the market value of the property had dropped, and provided a property tax break to first-time home buyers. Florida voters voted “no” on that measure, which many people had worried would erode the tax base for years to come.
Voters also considered similar issues in Arizona, which has one of the most complex property-tax systems in the country. Proposition 117, which passed last Tuesday, aimed to streamline that system and provide a little more predictability to tax-sensitive property owners and the governments who rely on those property taxes. As such, the Home Builders Association of Central Arizona saw the measure as a realistic compromise between pro-tax and anti-tax forces. “Both extremes create an unstable and difficult environment for the real estate industry in Arizona,” said Spencer Kamps, vice president of legislative affairs for the Phoenix-based HBA, who says many homeowners became frustrated by the constantly rising property tax bills of the boom. Going forward in 2015, Prop. 117 will limit the increase in a property’s assessed value to no more than 5%. The measure is believed to be a more moderate solution than other proposals to cap a locality’s tax rate, which many felt would hamstring local governments’ ability to raise revenue and support services in the long term.
In Virginia, voters decided they wanted to tighten restrictions on government, at least where eminent domain is involved. State residents approved a constitutional amendment that will make it even more difficult and expensive to seize privately owned land for public projects. Given that Virginia had already tightened its rules on such decisions after the controversial 2004 U.S. Supreme Court ruling in Kelo vs. the City of New London, such worry may have been excessive. “There’s not really any problem with eminent domain in Virginia,” said Mike Toalson, chief executive officer of the Richmond-based HBA of Virginia, which decided not to oppose Amendment 2 after the backers clarified a few key details. Among those details: a clarified definition of “public use” that included public utilities as well as local water and sewer authorities, the definition of “lost profits” and “lost access” for private property taken for public use, and the time frame for landowners to be eligible to receive financial payment for those damages. (Initially, the time period was open-ended, which opponents suggested could add up to staggering and unrealistic cost to governments who chose to use eminent domain; the updated version limits the time to one year, meaning property owners can’t expect compensation for the projected value of the land years into the future.)
Lastly, builders in Rhode Island are grateful for the passage of $25 million in affordable housing bonds, which was approved by 62% of voters. “We wanted this from a social standpoint and also from an economic standpoint,” explained John Marcantonio, executive director of the Rhode Island Builders Association. “Our builders used to do 2,600 single-family building permits a year. That declined to between 1,600 and 1,700 permits after the bust, and now it’s collapsed to 575 units a year, 60% of which are affordable housing.”
Those market dynamics are a radical change from the past, when affordable housing represented just 10% to 15% of Rhode Island home building activity. “What’s happened is that the cost structure [to build new homes in Rhode Island] has become so high that the traditional building industry is underwater,” Marcantonio said. “Most developers cannot build to our market unless they are doing very high-end, luxury custom homes or subsidized affordable housing, which communities are mandated
