Propositions 1A through 1E were soundly defeated by voters, leaving only 1F victorious. 1F’s passage fits perfectly into this voting pattern, as it had to do with limiting the Legislators access to pay increases in deficit years. It isn’t hard to define the voters’ message, they want Sacramento to make sacrifices in order to balance the budget, just like they have had to do in their own homes.

Across America the average family has made multiple sacrifices the last 18 months in order to make ends meet. Some decided to turn off their expensive HD cable, others agreed not to eat out and most cut back drastically on consumer spending.  Very few have been unaffected by the recent financial situation. Even in what can be considered the lavish state of California, people are reeling with lost equity in homes, reduced access to credit and mounting bills because of layoffs. Financial analysts are saying the market will start to round the corner this year, but not soon enough for voters to approve California’s complicated and highly political budget plan on yesterday’s ballot.

The ballot measures were a result of budget negotiations done earlier this year between the Republican Governor and the Democratic majority party leaders. The Big 5, as they are often called, are made up of the Governor, the Assembly and Senate majority leaders and the minority party leaders from both houses. This is the group that put forward the series of propositions voters decided on last night.  1A-1E would have raised significant money for the General Fund, set aside dedicated education monies for the 2011-2012 fiscal year and generally changed how the budget process is done in California.  Now, the Big 5 are headed back to the table to attempt a new budget under the June 30^th deadline.

With the state now facing an estimated $21 billion dollar deficit, a lot of decisions have to be made. None of them will be politically easy. Whether or not the Governor makes good on his promise to lay off thousands of state employees is yet to be seen.  State officials have indicated deep cuts will be necessary to education, public safety and social programs. Politicians do however, have one thing on their side as they head into negotiations, they know without a doubt what the voters have asked them to do.

Gov presented on numerous legal topics affecting agents in the field and briefed the membership on new laws impacting transactions, homeownership and general real estate practices. For those unable to attend, a video of the presentation is now available for viewing (approx 2hr). 

Gov Hutchinson is Assistant General Counsel and Staff Vice President of the CALIFORNIA ASSOCIATION OF REALTORS®. He has been with C.A.R. since 1985 and manages C.A.R.’s Member Legal Services Program in Los Angeles. Gov advises REALTORS® through the “Hotline” on all aspects of real estate law and trains and supervises other “Hotline” attorneys. Received his Bachelor’s degree in History from Princeton University and his Juris Doctorate from the University of Pennsylvania. Gov has written for CALIFORNIA REAL ESTATE magazine, co-authored C.A.R’s continuing education courses and is a master instructor for the Education Division of C.A.R. with certification from the Department of Real Estate. He also regularly speaks to Associations/Board of REALTORS®, affiliated trade associations, city and county bar associations and major real estate firms. He is also a member of the Real Property Law Sections of the American, California and Los Angeles County Bar Associations.

California is changing. Californian’s typically take the role nationally of being the facilitators of change. Whether its race, religion, sexual orientation, politics or the environment, California typically leads the way – for better or for worse. Unfortunately, as we continue to evolve, governments have begun adopting onerous policies or mandates in an effort to achieve desired results and achievements without fully vetting the long term cost or impacts of the adopted policies. The lack of thorough analysis and forethought of consequences has left many of us confounded. There appear to be workable solutions readily available and awaiting implementation without the need for additional bureaucracy.

So, what’s the solution? Cities are driving agendas that demand a change in the way business, real estate and development are done within their boundaries. It is imperative that we engage ourselves in this process and provide the essential data and analysis needed for proper decision making and if necessary, policy change. But unfortunately this isn’t always enough. How do we adequately address local government concerns while maintaining proper boundaries in regards to our interests?

Providing incentives as a primary tool to facilitate change seems like a straightforward concept. It’s simple in its implementation and does not restrict or impose detrimental policy changes. In most instances, it actually provides a more efficient vehicle for delivery of the proposed solution. By incorporating incentives, you provide for the opportunity of voluntary gifting of the desired service. At the very core of this approach lies the true key to its success. It’s simply human nature to work progressively towards a goal when there is a benefit in achieving it. On the other hand, mandates for performance are generic and when doled out they usually elicit the minimum output. The private business sector exceeds in the areas of creativity and service delivery. So why not let business do what it does best? Providing incentives is the way to achieve success. We all want projects that will benefit our communities and this certainly seems like a better use of resources than a set of mandates that only half helps everyone.

The city of Monterey recently adopted a new set of Green Building Regulations. All new construction and remodels, both commercial and residential will be subject to either the Leadership in Energy and Environmental Design (LEED for commercial) or the Build It Green (BIG for residential) standards with subsequent adherence to an adopted green point rating system. The new regulations will be phased in over a year with the first year being voluntary, incentivising adherence to the new policy with such things as: expedited permitting, flexibility in setbacks and receiving priority inspections. The incentives approach certainly makes the new level of reg’s somewhat more palatable, but what happens after the year long phase-in sunsets? All projects will require the new green standards and the incentives either disappear or lose their benefit altogether. The imagined panacea now has the potential to negatively impact the overall intent of those who originally conceived and subsequently adopted the policy. I’m sure you can imagine the desire of some to circumvent the new requirements only to pursue improvements void of the appropriate permitting process.

This is certainly not a judgment on either the LEED’s or Build it Green programs. Both have proven to be beneficial and have delivered levels of success in achieving energy efficiency and environmental benefit. This is however an opportunity to evaluate the level of success prior to the mandatory green building standards taking effect a year from now.

Recently, it seems like every product and company out there is jumping on the “green” bandwagon. With all of the feel-good promotional ads and new green products out there, it can be hard to differentiate between what may be “green plated” and what is truly a sustainable, environmentally – friendly product. Marketers are smart and understand that “green is the new black.” So buyers seeking true environmentally sound products must be smarter.

First off, the expectations of “going green” and the focus of one’s efforts on changing lifestyle behaviors and patterns to accommodate this choice need to be reigned in somewhat. There are very few 100% green products available on the market – contrary to what some may want you to believe. Many products are sustainable in some ways, and not so sustainable in others. Chances are, you’ll need to decide what green attributes are most important to you. Is it recycled? Is it durable? What is its’ carbon footprint all the way down to the production process? These are just some of the choices you have in front of you.

The topic of green building and residential energy efficiency has gone far beyond just the environmental community – becoming not only a relevant issue among mainstream building industry professionals, but an imperative discussion to be had in the real estate business. One of the most common concerns being: the true costs and benefits associated with “going green”.

Many California based builders have stated that the costs associated with green building have traditionally been prohibitive – resulting in expenses 10-20 percent more than that of traditional construction. However, many green advocates claim that the costs are negligible when compared to the value recaptured through water and energy savings, health benefits and environmental impacts.

Roundtable discussions are taking place across the state with Realtors® and industry professionals to strategize and conceptualize a reasonable approach to implementing an incentive based energy efficiency methodology in existing residential communities. While the task is certainly daunting, it is somewhat comforting to know that many energy efficient measures can be undertaken on a meager to modest budget with efficiency returns more than making up for the initial investment made.

One such group, “Step Up to Green”, is made up of local professionals throughout Monterey County. From municipal staff, sustainability professionals, water experts, local business owners and more, the brain trust behind the “Step Up to Green” program is certainly robust. The incentive based platform focuses on what homeowners can do to achieve energy efficiency. The common-sense approach is attainable, and with adequate public support, a viable program producing tangible results could be seen sometime early next year.

The environmental impacts of residency in Monterey County are being studied, evaluated, researched and tested by both industry advocates and environmental policy groups. As the global climate change debate continues – it will be imperative for our industry to be on the front lines of these discussions. A voluntary, pro-active approach on our behalf will undoubtedly serve as a long term benefit in this dynamic endeavor. While residential energy efficiency standards certainly aren’t the requirement today in most areas, it is understood by most that it will be in the near future. Our efforts to lead the way in research and best practices today will certainly help to achieve realistic, achievable, science derived solutions for the future.

Here at MCAR we are taking both the green movement and the interests of our membership seriously. We will continue to engage you all in the process and elicit response and feedback in our continuing “green endeavors’. I look forward to updating you all in the near future.

While the green benefits associated with any given product are certainly noted and appreciated, there are implicit environmental costs directly related to the production of these products and materials that should be taken into consideration when performing a true environmental analysis. I challenge you take a few minutes to do a little research before making up your mind one way or the other on a given green product or energy efficiency strategy.