Note: This article is a sidebar to this issue's feature story, "Town Shopping."
In the West these days, you can’t swing a dead cat without hitting a real estate professional directly in the noggin. Add the ancillary, pilot-fish occupations, such as mortgage brokers, lenders, appraisers, and home inspectors, and the numbers become truly staggering.
Consider these stats from the belly of the beast: In Eagle County, Colo., home to Vail, the nation’s largest ski area, there is one real estate professional for every 1.5 properties listed. In Breckenridge, home to the nation’s second-busiest ski area, nearly 30 real estate offices line Main Street alone — this, in a town of about 3,000 people. In the Yellow Pages for Eagle and Summit counties, listings under the various "real estate" headings take up 10 full pages.
And the saturation goes beyond the well-known real estate hotbeds. Silver City, N.M., population about 10,000, hosts almost 90 real estate agents. That number, according to the Grant County Board of Realtors, has doubled in five years. Around the region, the story repeats.
Still, "I am not convinced that real estate brokers are proliferating in a disproportionate way," says Thomas Power, an economics professor at the University of Montana. "I see more boutique stores and restaurants come and go across the West."
But it’s hard to deny that realtors and their pilot fish now dominate public offices and places of power in many Western boomtowns. Is all this any different from, say, northern Ohio 30 years ago, when a significant percentage of the public dialogue centered around the oil and chemical industries? No, but, remember: The Cuyahoga River once caught on fire.
Realtors rise to power
To become a lawyer, accountant or professor, you have to go back to school for a couple of years, spending tens of thousands of dollars, and you will likely be paying off student loans until your kids are ready for college. With real estate, the licensing and certification process takes only a few months and can be done online from anywhere, and it costs only about a thousand bucks. Then, you trade in your dusty Carhartts or your bartender’s apron for a clean pair of Dockers, and you’re good to go. You might not make it big, but, then again, you won’t make it big as a day-laborer, either.
"I got into it because I was tired of having to constantly weather the stress of impending layoffs at the copper mine where I’d worked for 16 years," says Silver City’s number-two real estate salesman, Billy Donnel. "I had a new wife at the time and was looking for a new start anyhow. Selling real estate was a perfect alternative, because I like dealing with people, and I believe that, all in all, the real estate boom here is benefiting the town."
Legions of others are following the same path to real estate sales. (The National Association of Realtors claims 1.2 million members, almost three times as many as it had in 1980.) From there, many have climbed into places of power.
In Frisco, Colo., where I live, the mayor sells real estate, two members of the Frisco Recreation, Open Space and Trails Committee sell real estate, and three members of the town’s Economic Development Advisory Committee are either directly or indirectly involved in the real estate business.
Sure, you can argue that, in ranching towns, a disproportionate number of elected officials are likely involved in ranching, and that, in rural communities, conflicts of interest are inevitable because of the relative shallowness of the electoral gene pool.
But as someone who serves on three municipal advisory committees, including the two referenced above, I can say unequivocally that a high percentage of the public dialogue — and consequently, public policy — centers around our sense of inflationary entitlement vis-à-vis the continually exploding real estate market.
Power leads to corruption
For evidence of this growing influence, look at newspapers, which depend heavily on ads from real estate purveyors. A daily paper near where I live recently prostrated itself in print in an embarrassing fashion because it had dared to speak badly of a specific real estate person — in a humor column, no less.
In Utah, the Salt Lake Tribune reports that real estate interests hold 22 of 104 seats in the state Legislature — more than any other business — thanks in part to the $295,000 that the Utah Association of Realtors spent on the 2004 elections. "The real estate agent/developers’ influence on the process is evident," the Tribune understated. Realtors recently helped draft a bill that would have effectively ended local land-use planning. That effort bit the dust, but several similar proposals are in the works.
The bill’s sponsor, former Senate President Al Mansell, is a former president of the National Association of Realtors, which wields substantial power in Washington, D.C. The largest trade organization in the country, the association claims an annual lobbying budget of $11 million. The group has done some downright generous work — it raised more than $1.5 million for Habitat for Humanity International’s tsunami rebuilding efforts, and sponsors minority homeownership programs, for example. At the same time, it has been one of the most vocal supporters of tax breaks that encourage real-estate investment and second-home buying and generally favor the wealthy over the working class.
The association has also aggressively opposed disclosure laws, which require real estate agents to make it clear to potential buyers that the agent represents the best interests of the seller, not the buyer, says Chris Eby, a Frisco, Colorado-based "buyer’s broker" who goes toe-to-toe with real estate agents. "I know and work with lot of listing agents who are honorable people," he says, "but, as a whole, it is a corrupt profession."
At least one economist, Steven D. Levitt of Freakonomics fame, argues that the Internet, with its increasing number of Web sites that link up buyers and sellers, will do to realtors what it it is already doing to travel agents and stockbrokers — render them virtually obsolete. That’s a point with which the National Association of Realtors, not surprisingly, disagrees.