This is an archived article that was published on sltrib.com in 2006, and information in the article may be outdated. It is provided only for personal research purposes and may not be reprinted.
Utah's Realtors are a case study of the political power of money.
At one time a nonentity in state politics, the Utah Association of Realtors has become an undeniable force in state elections and lawmaking over the past decade. And cash appears to be key to the group's success.
Seven years ago, the Realtors reported a zero balance in their political action committee (PAC). This year, with a slush fund awash in more than $730,000, the Realtors have so far shoveled $325,000 into an election in which half the state Senate and the entire House are before voters. That's more than any other Utah PAC.
Realtor executives say they are doing the same thing any active PAC would do: using old-fashioned political strategy to shape their own destiny. But some allege the Realtors are buying the state's lawmaking body - even if indirectly. And rank-and-file Utahns are suffering the consequences.
"Obviously Realtors, like other special interest groups, contribute huge sums of money because it works," says Tony Musci, director of Common Cause of Utah. "The political game is one of give and take. Too often, the debate is driven by who has the most cash on hand."
In 1999, the Utah Association of Realtors was almost exclusively an industry organization, focused on its own professional standards and social network. The next year that changed, when the group hired staff dedicated to reviewing legislation, lobbying lawmakers and raising funds for the Realtors' PAC. In 2000, the association collected more than $22,000 - mostly small donations from individual Realtors.
Since then, the Realtors' election and lobbying fund has increased exponentially. So has the association's gauge of lawmaker cooperation on real-estate legislation.
Falling into line: Seven years ago, just 6 percent of Utah legislators got a perfect score from the Utah Association of Realtors. Last year, the Realtors gave two-thirds of lawmakers a 100 percent ranking. During the same seven-year spread, the number of state legislators who work in real estate trades and professions has increased by 25 percent. Now, one out of every five lawmakers makes a living in real estate.
Realtors' CEO Chris Kyler is unapologetic. During elections, a 16-member committee reviews every legislative race to determine where the Realtors' cash will go. So far this year, most of the money has bolstered Republican candidates. And then, when the legislative session starts, 50 Realtors meet weekly to review every bill, determining its impact on the industry and telling lawmakers the industry's position on each piece of legislation.
"Most of what we're doing is being an information source to the Legislature," says Kyler. "We want to make sure that they're not missing something or that there are not unintended consequences."
But the Realtors are doing more than educating lawmakers about the sanctity of private property. They have been credited with writing some of the most controversial legislation in recent years - to ease development and protect Realtors' bottom line.
What's good for industry: This year, Sen. Al Mansell, former president of the National Association of Realtors, sponsored two bills that local governments complained would gut local land-use planning. Those bills ultimately were amended.
But a year earlier, the Sandy Republican sponsored legislation that critics say is aimed at crippling discount real estate brokers and preserving Realtors' standard 6 percent sales commission. The bill defines a minimum "scope of services" that brokers have to provide to qualify. Bare-bones listings would not meet the standard.
"Did I feel a conflict of interest? No," Mansell was quoted in Governing magazine. "What I felt was a strong push by many of my colleagues."
Discount brokers and online real estate providers say the legislation was meant to curb their business and, ultimately, eliminate choices for homeowners who don't want to pay 6 percent.
Paul Tippets, co-founder of South Ogden-based Real Estate for 2, says his listings only increase as homeowners seek out lower commission rates. Real Estate for 2 commissions range from 2 percent to 5.5 percent.
"There are a lot of sellers out there who just can't afford 6 percent," Tippets says. He opposes the association's efforts to protect higher commissions. "We definitely want to take care of the client, but we also want to help save money."
Forsalebyowner.com Chief Operating Officer Colby Sambrotto says the legislation has discouraged some Realtors from working with his company. "It's become much more difficult to do," Sambrotto says. Still, the online listing service's numbers double each year - even in Utah.
Other states with similar legislation have faced anti-trust investigations from the Federal Trade Commission and the U.S. Justice Department.
Kyler says Utah's law has been misconstrued. He says it simply required brokers to respond to client questions, make offers when requested and be present at closing. "We don't care whether they work on commission, flat fee or what the commission is," Kyler says. "Every business model is acceptable. We are free-market people. We believe the free market yields the best product."
Profit or principle: Whether the Realtors are fighting for America's founding ideals or their own profits, their influence on Capitol Hill is undeniable, says House Minority Leader Ralph Becker.
"The scales are weighted very heavily for real-estate development in any debate before the Legislature," he says. "It's bound to have a significant effect on both what legislation is considered and the outcome of any legislation related to real-estate development."
Ultimately, Musci says, Utah voters have to decide if they're OK with the way their lawmakers vote on Realtor issues. "The Realtors want government out of real estate," Musci says. "If you agree with that, you like what the Realtors are doing. If you don't, you should be very concerned about the process."
Whatever Utah voters think, the Realtors plan to expand their influence even further. Their PAC reported a $608,000 balance as of Sept. 15.
"We're just beginning to do our part in the political process," Kyler says.