18 Oct Ep. 28 Martina Johnson, S.L.A.R. Government Affairs Director-Amendment 4
In this episode Adam and co-host Matt Simon talk to Martina Johnson about her role as the St. Louis Association of Realtors Government Affairs Director. They discuss why Missourians should vote yes on amendment 4, landlord discrimination against sources of income, new H.U.D. guidelines, and much more.
Email questions to Podcast@HermannLondon.com
0:49 Adam introduces Martina Johnson, the Goverment Affairs Director for the St. Louis Association of Realtors
0:59 Adam introduces Matt Simon, commerical Realtor at Hermann London
1:34 December 6th is the Hermann London Business Planning Retreat
1:40 December 8th is the St. Louis Association of Realtors Holiday Open House Party
2:32 October 20th is RPAC-Toberfest at Kirkwood Station Brewery from 4:30-6:30
3:13 October 24th is the Xplode Tech Conference at River City Casino
4:11 November 10th is the St. Louis Association of Realtors Installation of Barry Upchurch
5:21 Why does the St. Louis Association of Realtors need a government affairs director
7:05 Call 314-576-0033 and ask for Martina if you are having a real estate issue in your municipality
8:33 Why should Realtors donate to the Realtors Political Action Committee (RPAC)
10:30 Who should Realtors vote for in the upcoming election
12:34 Why should people vote YES on AMENDMENT 4
20:43 Can landlords & property managers discriminate against sources of income like section 8
26:24 New HUD guidelines on background checks
33:58 City of St. Louis public nuisance code changes
38:09 Security deposits musts be held in a separate trust account
40:16 What’s the best way for Realtors and brokers to stay informed with government affairs
42:02 Changes to commercial real estate
43:00 Who lives under Martina’s roof
43:55 Where is Martina her best
44:15 What is Martina’s favorite blog
45:11 What is Martina’s guilty pleasure
46:12 Who is Martina’s mentor and how has she thanked them
Adam-Welcome to St. Louis Realtor Podcast live from the rooftop of the Hermann London Real Estate Group in beautiful downtown Maplewood, Missouri! Today is October 18th and this is our 28th podcast. We’ve got some very special guests with us today. We’ve got Martina Johnson from St. Louis Realtors, and what is your official title?
Martina-I’m officially the government affairs director.
Adam-And Mr. Simon! Everyone knows Matt Simon.
Matt-How are you doing!
Adam-He’s our commercial expert but you also know about governmental affairs and an economist.
Matt-I’m a jack of all trades.
Adam-Are we going to talk about your newly listed haunted house?
Matt-I don’t know if the listing agent would appreciate that. I’m sure she prefers qualified buyers coming by and not just lookie-loos.
Adam-December 6th we have the company business planning retreat. December 8th the St. Louis Realtors have their holiday open house party. I’ve been the past 6 years and it is always a good time. Are all St. Louis Association of Realtors members welcome?
Martina-Everyone is invited and there will be an open bar, free food, and vendors you can buy gifts from. It’s a great chance to meet people in your industry.
Adam-The leaders of our industry will be there and you can hobnob. I love going because I get to meet the leaders and other high-performing Realtors. I get to shake their hand and say, “Nice to meet you. I’ve done 3 deals with you over the years and we’ve never actually met”. RPAC-Toberfest is coming up.
Martina-It is this Thursday and it is our last RPAC event of the year. I think we will get into RPAC later but it is the Realtors Political Action Committee. It is only $15 to come to this happy hour and if you invest $15 you actually become an RPAC participant which is a big deal to us. Come out to Kirkwood Station Brewery from 4:30 to 6:30. There will be free drink tickets and appetizers and you get to support a great cause that really helps your business.
Adam-I know when we brought our new CEO into the St. Louis Realtors about 2 years ago he was excited about this thing called The Xplode Conference which is all about technology.
Martina-I don’t think we’ve had Xplode before John Gormley came on board. It’s at River City Casino and you do have to preregister through EventBrite. It should be a great event and there are lots of national speakers and it will focus on technology and how to improve your business.
Adam-My ears just perked up when you said it’s at the casino. Any other events?
Martina-Our installation is coming up on November 10th for our 2017 president, Barry Upchurch with Upchurch Realty. This will be our 140th anniversary for St. Louis Realtors. We’ve been around longer than the Nation Association of Realtors.
Adam-Barry Upchurch is going to be the new president and he is an awesome guy. He has been every other position that you can be and he’s a CPA and an attorney. I like talking to him. We have a lot to talk about and Martina is a database of information. You probably know a lot about each municipality’s rules and laws all the way up to the national stuff. We of course want to talk about this big amendment but I wanted to open with by asking why do the St. Louis Realtors employ someone like you and why do Realtors care about what’s going on with the government?
Martina-Full disclosure, I am your registered lobbyist here in the St. Louis city/country region and various jurisdictions. Different government officials create laws that might not help the real estate business and might make it harder to sell homes and close deals. I advocate on behalf of reasonable sign ordinances, inspection ordinances, occupancy permits, and anything that would affect your business as a Realtor. We are making to make sure the government and municipal codes are not prohibiting you from being able to sell a home.
Adam-If someone is coming up with a rule you would go talk to the mayor and explain why it’s a bad law?
Martina-Each municipality usually publishes their agenda in emails and send it out to different groups so I subscribe to them and monitor them. We do have 90 municipalities in St. Louis county alone so it can be hard to stay on top of them all so if you do have an issue be sure to contact me at 314-576-0033. Then I’ll go talk to the city counsel and talk to their planning and zoning or whoever is originating the idea and figure out what they are trying to solve and try to compromise so there is a win-win for the officials and the real-estate industry.
Adam-This stuff doesn’t just help Realtors, in theory it helps the community and the consumers by making home ownership affordable.
Martina-Realtors are our members and a lot of issues we have involve rental properties but we are working to make sure home-ownership stays affordable.
Adam-This is political season because of all the presidential stuff but you are also involved in RPAC. I’m a donor but why should Realtors help RPAC?
Martina-I can go in and talk to different officials and let them know we have an issue with a problem but I’m only one person. RPAC has over 2,000 members invested of the 7,000 in the St. Louis area and it shows those officials that they care about Realtor issues. RPAC has our local PAC at the association that is managed by a board of trustees and they choose what candidates to support in an election. This helps us build relationships with elected officials who are open to Realtor ideas and open to talking to us when something might affect our industry.
Adam-Which presidential candidate is better for the Realtors?
Martina-No comment. I can only speak to local and statewide issues. Our RPAC is bound. We can give up to statewide races. The highest level we can give up to is the governor or treasurer. We can’t give to our U.S. congressman or senators.
Adam-Are there Realtor candidates we should consider voting for in the next election?
Martina-There are a couple new local members that are going to be members of the Missouri state legislature. Derek Greier lives in Chesterfield and works for Duke Homes. Derek is going to be the new state rep in district 100. He won his Republican primary in August and we anticipate him winning his general in November. Gena Evans is rep elect in district 99 which is the Valley Park area. She ran as a Republican in a typically Republican held seat so we anticipate she will win her general. Those are 2 people that RPAC supported and their first campaigns were successful. It’s awesome to have Realtors in office.
Adam-I’m impressed that you have this memorized. Let’s jump into amendment 4 and we are supposed to vote yes on 4.
Martina-Amendment 4 is huge initiative that is heavily backed by Missouri Realtors. We actually went through the petitioning process to get it on the ballot and collected over 300,000 signatures. It’s a constitutional amendment that will ban taxes on services in Missouri. Right now you pay taxes on goods and services but you don’t pay it on services or labor. This is important to Realtors because essentially everything but the house is a service. The aggregate sales tax in St. Louis is at 9.6% so imagine that the consumer had to pay another 9.6% tax on your commission.
Matt-Other services are affected like legal accounting.
Martina-It covers everything like haircuts, manicures, auto work, attorneys, CPAs, day-care, and maybe even rent. It is a broad amendment and that’s the reason for it. We are looking to protect all consumers and service related providers.
Adam-You figured out that there was someone out there that wanted to tax services and you went out and got this thing on the ballot.
Martina-People ask why such a drastic step to prevent something from happening. The reason is because the last 7 legislative sessions in Missouri there have been a version of sales taxes on services introduced. One year a version got enough votes to get passed out of the Missouri house and had a senate hearing so we feel like that is too close for comfort. There has been a lot of discussion about changing the tax system in Missouri to a fair tax which would eliminate income tax but would replace it with more sales taxes so we are looking to leave our tax system the same but also protect it.
Matt-Missouri is not the only state that is looking at this. Illinois and Oklahoma have also passed measures to enact taxes on the services. It’s good that you are being proactive.
Martina-Illinois and Oklahoma have looked at enacting it. North Carolina and Washington state have already as well. They went into affect. If you interested you can look up their Department of Revenue sites and you can see what is now taxable under their new laws.
Adam-Would I pay more or would my clients have to pay?
Martina-Our amendment doesn’t touch the income tax, it just prevents the sales tax from being enacted. Either you as a Realtor would have to pay that on your commission or you would have to adjust it lower so the consumer could incorporate that cost. It’s not clear who would pay it but it would have to be collected.
Adam-How would they even know how much the tax should be? This could be billions of dollars?
Martina-They don’t. This is a revenue neutral amendment because we don’t know what it could be preventing in the future. It could be preventing an unbelievable amount of money from being collected. It protects people who may not have the income to pay.
Matt-It effect low income people disproportionately.
Martina-It doesn’t effect taxes existing goods and services.
Adam-Is the RPAC the only ones heading this up?
Martina-We have a huge statewide coalition. Missouri Realtors did the bulk of the work with the petitioning but we have the National Federation of Independent Businesses and trial attorneys and Bankers Association. There are about 50 members on it. I’ve talked to several local chambers of commerce. I’m going to Chesterfield’s commerce tomorrow.
Adam-It’s sickening to think about this. It effects my doctor, attorney, and plumber.
Martina-You do need to vote yes to prevent the tax. Vote FOR amendment 4 to prevent sales taxes on services.
Adam-When are we voting on this?
Martina-November 8th. Please come out to vote no matter how you feel about what’s on the top of the ticket.
Matt-I voted 2 weeks ago via absentee. The Missouri constitution amendments will effect your life.
Adam-We do a lot of property management and leasing here at Hermann London and I think I read an article saying they added a protected class to gender, religion, marital preference, and race. Have you heard about the new one called sources of income?
Martina-The city passed a bill in 2015 that added sources of income to their city code so you can’t discriminate based on sources of income which is essential housing choice vouchers or section 8. You can’t have a blanket policy that you do not accept housing choice vouchers. You should still have the option to work with HUD. A tenant will go through their screening and will get a certain amount on their voucher and they go look for a residence and once they contact the landlord HUD has to come and do their own occupancy inspection and HUD says they will give X amount for the unit. There should be no problem if HUD is offering less than what you are offering that unit for but you can’t say that you won’t even go through the process. There are some advantages to taking that voucher because you know the rent is coming every month.
Adam-…via the tax-payers.
Martina-It is a little bit of a different process. You could probably tell me better since you actually practice it.
Adam-I actually don’t know because we accept section 8 housing vouchers but we don’t currently manage any section 8 properties. I know a lot of our owners don’t necessarily want to deal with a government program like that. We do get people calling and asking if we take section 8 and we say of course, we accept all sources of income. I see people out there saying no all the time but maybe they don’t know the rules.
Martina-I may have to check but I believe it is only in the city. I can come back on a later episode and let you know for sure. The St. Louis Association of Realtors supports fair housing and we teach classes. We like to remain neutral and non-discriminatory as far as your sources of income.
Adam-You also couldn’t discriminate against someone who makes their money off of legal gambling at a casino.
Martina-I think I read having no discrimination against sources of income actually started in New York because people didn’t want to rent to attorneys.
Matt-They didn’t want to get sued.
Martina-If you don’t like what someone does for a living you can’t discriminate against them.
Adam-Someone once told me that Catholic hospitals were closing down because they were being forced to do abortions. We could be forced to have a criminal living there even if we didn’t want to deal with criminals.
Martina-A good thing about the housing program is that they do vet their own tenants so that could be a cost saving measure for the landlord.
Adam-Al Capone went to jail for tax evasion not the crimes he committed. We don’t have to take a drug dealer because their income isn’t legal. You mentioned there are also some new HUD guidelines on background checks.
Martina-There have been some new guidelines which are not regulations. They are looking to eliminate blanket background checks because somebody might have a felony they committed 30 years ago and they have had records of good tenancy for decades. HUD is looking to protect portions of the population through this guideline. They recommend looking for only convictions and not arrests and only go back 7 years. They also recommend looking at mitigating circumstances like age and whether it affected the property and residents.
Adam-Hermann London Property Management doesn’t have any official policies about who we accept. We get each owner involved in that. The only policy we have is that the people have 3 times the income over the rent.
Matt-Where can we find those recommendations?
Martina-I heard this all through the National Association of Realtors so go to Realtor.org. The other guideline has to do with crime-free housing ordinances which says what different municipalities need to do to remain compliant and to continue to receive HUD funding like community development block grant programs. I was in Florissant regarding a crime free ordinance program last week advocating against it. The Realtors had a hand on changing the bill but ultimately we were disappointed.
Matt-Is this in regards to having 3 criminal calls in a year and the investors losing their ability to rent?
Martina-Yes. They’ve had a rental license in their code since 1997. Now they are going back and making changes to the code by replacing it with a more powerful one. It’s very burden-shifting to the landlord and they shouldn’t be responsible for the tenants to that degree. It says things like any act of a felony by the owner, tenant, or guest on the property or the city could cause a license suspension.
Matt-They don’t understand that they are discouraging outside investors from bringing money into the neighborhood.
Adam-Don’t you have to live near too?
Martina-Either the property owner, manager, or a registered agent has to live within 50 miles. We got it changed to registered agent to make it a little bit better. Within an hour is also okay. The other thing that was unfortunate is that the utilities must be on. You can risk losing your license if the tenant doesn’t pay the utilities and you get a notice if they haven’t been on for 2 months and then you have 14 days to fix it.
Adam-What’s their goal?
Martina-They are hoping to bolster their property values. We did explain to them that instead of eliminating crime it’s keeping investors away.
Matt-Will a victim of domestic violence avoid calling the authorities?
Martina-The city of St. Louis has a public nuisance code that they are suggesting adding edits to. I went to the public safety committee meeting at city hall and they are adding a special carve out for victims of domestic violence and making it so a police call doesn’t count as a strike towards that property or a summons for a problem hearing on that property. Thank you to Alderwoman Green for sponsoring the bill.
Adam-In Florissant it seems like they want the landlord to stop by once a week to check on the property and do extreme background checks. No one wants that.
Martina-You can’t even do that because there are limitations on background checks. I think the tenant is due their privacy and right to live on the property. It’s an unfortunate ordinance. We will have to see what happens next.
Matt-I don’t think it will be long before it gets challenged.
Adam-I think we tried to challenge Feguson a few years ago on some sort of similar rule.
Martina-That was before my time but we’ve been in a lawsuit with Ferguson over a similar licensing scheme for a long time. We did challenge the St. Louis country ordinances. The county one mandated evictions in certain cases. A big problem is a lot of these don’t allow due process which involves a notice and a hearing and that is something that is not allowed for the landlord or the tenant in Florissant and St. Louis County.
Matt-From what I understand the ACLU is challenging them because of that.
Martina-Yes, along with the Equal Housing Opportunity Counsel which is a tenants advocacy group. We have a very broad coalition. Usually when the real estate side and the tenant advocacy side are both on the same side of an issue that means it needs to be rethought out. We will see what happens.
Adam-You mentioned state laws on security deposits which I feel good about since we already follow this law.
Martina-Another change in landlord world is that there was a bill passed in the state legislature that now requires you to hold any security deposits in a separate trust account. You can’t just throw it into the operational account of your business. That is the tenant’s money until you go back through the inspection.
Matt-I wasn’t aware that wasn’t a law. We’ve been doing that since day one.
Adam-Maybe only property managers had to do it before and property owners didn’t have to before?
Martina-All realtors are expected to do that. When you sell a property you have to have somebody else’s money in escrow. This is just extending that to anyone that rents property. It is a best practice in case you as a property manager gets sued and all of your assets get wiped out which will lead to 30 small claims from all your tenants.
Adam-That’s interesting to me because as a property management company we do have a separate accounts but we don’t necessarily require that we are the ones that have to hold onto those deposits. We do sometimes allow the owner to hold onto the deposit. I wonder if we should be making sure that they know that they need to keep it in a separate account. When they tell me they are going to hold onto it I think they are spending it and then coming up with it later.
Martina-I would anticipate that during the next legislative session that there will be follow up legislation to clarify some of those things like whether the owner holds it versus the property manager or if the owner is out of state since it is a state law.
Matt-What’s the best way to keep informed on these evolving situations with government affairs?
Martina-I do publish an article every quarter in our magazine called Realtor Report or as things come up I will do a facts sheet. I’m also very active on twitter if you want to follow me @STLRealtorGAD and it is only for work. I only tweet policy or occasionally if the weather is nice I’ll tweet a pretty picture of city hall. I’ll live tweet city counsel meetings and bills we are working on. That is probably the most up to date way to be informed. We are getting a new website at STLRealtors.com so once that is up I’ll start putting more content up on there.
Matt-Can people get involved personally in the issues?
Martina-I think they might have just closed committee applications but if you are really interested call or email me. We do have an advocacy committee at the association. We have our own PAC committee. The best ways to get involved is to serve on a committee.
Adam-Any other changes coming up, especially on commercial real estate?
Martina-Tax reform is going to be a big issue nationally and the National Association of Realtors is very committed to protected 1031 exchanges and like kind exchanges for commercial. We will keep an eye on other bills but I haven’t had a lot of issues as of late.
Matt-No news is good news.
Martina-That is the truth in this industry.
Adam-I’m just going to jump into my 5 questions. Who lives under your roof?
Martina-I do actually rent. It’s fine. I’m advocating for myself sometimes.
Adam-We always say that we help people make smart decisions in real estate and that doesn’t necessarily mean you have to buy.
Matt-We are seeing a larger trend in rentals with the younger generation.
Adam-As a property investor I don’t mind renters.
Martina-Under my roof is myself and my wonderful roommate Kelly who is thankfully 5 foot 10 inches so she reach the top cabinets and change the light bulbs.
Adam-I think that’s the only reason my fiance Molly keeps me around and to open jars. Where are you your best?
Martina-I don’t know
Matt-You are pretty good on the fly answering questions about governmental affairs.
Martina-I guess I’ll take that.
Adam-Do you have a favorite blog or podcast?
Martina-I’ve already gotten in trouble because I don’t listen to any podcasts.
Adam-Do you read any blogs?
Martina-I do read that NextSTL.com blog. It’s pretty good. They do jump the gun on stories sometimes and then the project people come back and say that is not really happening.
Adam-He was one of our first guests.
Matt-They do a good job.
Martina-I love the comments section of that blog. I love the comment section of anything online. I like watching people get into fights.
Adam-Those comment sections can come back to bite you, just check out what happened to Ken Bone.
Adam-What is your guilty pleasure?
Adam-Do you watch Million Dollar Listing?
Martina-I love every reality TV show on Bravo. You can ask me some random questions on the fly about that.
Matt-That’s when she is at her best.
Adam-I’ve been training people and I was bringing up stuff about Million Dollar Listing: Los Angeles and one person had no idea what I was talking about. I told them that they need to start watching the show.
Matt-It’s not real.
Adam-Do you think they are not actually selling these properties?
Matt-It’s a very well made show.
Adam-Who is your mentor and how have you thanked them?
Martina-The person who used to have my roll, Maureen, was very very helpful and is essential to why I do this right now. She left to have her first baby a year ago and that’s how I was lucky enough to get this opportunity. We live in the same neighborhood and that’s how we stay in touch. Recently I thanked her by buying her daughter a St. Louis Blues outfit from a vendor at Holiday Open House last year.
Matt-When is that again?
Martina-December 8th. Celeste Rueter who is now the executive director at the Home Builder’s Association was an awesome mentor. I’ve been very lucky to work under two very strong and capable women in public policy.
Adam-If you have any questions submit them to PODCAST@HermannLondon.com. Take care!