Poised for Revolution
Poised for Revolution
It’s not unusual for REALTORS® to go the extra mile for their clients. Whether it’s arranging child care for out-of-town buyers, orchestrating last-minute repairs, or renting a truck after a moving company suddenly bails, you do what it takes to get the deal done.
So who’s looking out for your needs?
That question weighs heavily on the mind of 2017 National Association of REALTORS® President William E. (Bill) Brown of Alamo, Calif., and it’s driving his education and legislative priorities this year.
Brown doesn’t mince words. “My focus as president of NAR is on helping REALTORS® make money and to retain and even enhance the rights of property owners,” he says.
At the same time, he has lofty expectations of his fellow REALTORS®. “To excel in this profession, you have to love the business and be committed to increasing your knowledge base,” he says.
And you must think long-term. “As real estate professionals, we are busy finding and completing transactions. Too often, many of us don’t use our time or resources to plan for the future,” he says. “We don’t have a company pension. We’re independent contractors. We all need a sustainable financial plan to carry us through slower years and into retirement.”
Brown has spent his career working in multifamily real estate sales and investing. He remains an active investor and he wonders why more members don’t make real estate part of their financial plan.
According to NAR data, just over 30 percent of REALTORS® own investment properties. Brown would like to see that figure grow substantially. He’s championing a new NAR course on real estate investing, which debuted at the REALTORS® Conference & Expo in November. The eight-hour course includes strategies to help members secure their own financial future and smart practices for working with investor clients. An online version of the class will be available this spring.
Forging Ahead Without Fear
Brown is also thinking about the future of the organization. In the 20 years that the internet has been part of our life and work, REALTORS® have retained a central role in most real estate transactions. Yet pundits continue to warn about existential threats to the industry. The appropriate response is neither complacency nor worry, Brown says, but action. Appropriately, he has made the 1968 Beatles’ anthem “Revolution” his yearlong theme.
“I don’t mean revolution in the sense of a war or upheaval,” he told a ballroom of REALTORS® gathered for a leadership summit he hosted in Chicago over the summer, “but revolution in the sense of progress.”
With technological and demographic shifts upending the old ways of reaching consumers and doing business, Brown and his leadership team are calling on members to forge ahead boldly. “We’re living in a time of discovery, change, improvement, and disruption, and we can’t be held back by fear,” he says.
NAR’s support of Project Upstream, he says, is the kind of bold initiative he’s talking about. The new data entry platform will give brokers unprecedented control over the management and distribution of listing data. “It’s the first time brokers as a group asked us for something,” Brown says. “And it will be a system that will benefit every NAR member.”
He notes that support for innovations like Upstream has been a hallmark of NAR under the leadership of CEO Dale Stinton. Stinton retires at the end of this year after 36 years with NAR, the last 12 as chief executive. The search for a replacement is underway, but Brown says he’s thrilled to have Stinton’s steady, experienced hand at the helm through 2017.
It’s likely to be an interesting year. With a new Congress and administration in Washington, NAR expects an active legislative and regulatory agenda. Brown is adamant about protecting tax deductions for residential mortgage interest and property taxes—for primary and secondary homes—and preserving the 1031 like-kind exchange. “We have to make it clear that [the 1031] is not a tax break for the rich.” Brown points out that the majority of participants in these transactions are mom-and-pop investors selling and trading into properties with from four to 20 units.
His other big priority: shoring up homeownership rates, which dipped below 63 percent in 2016, a 50-year low. “People still believe in homeownership, but some may be scared off by the lending hurdles. Others are discouraged by the low inventory,” he says. “We have to find solutions because we know homeownership—responsible homeownership—is good for the country and for our communities.”
With Brown’s encouragement, NAR Chief Economist Lawrence Yun is teaming up this year with academic researchers at the University of California, Berkeley, to develop studies that support the role that homeownership plays in building robust communities and the economy as a whole.
In addition, the federal government’s role in supporting mortgage giants Fannie Mae and Freddie Mac must be ensured, Brown notes. “Without it, there wouldn’t be capital available for 30-year financing at reasonable interest rates.”
A Commercial Path
A career in real estate was practically a foregone conclusion for Brown, whose father, William H. Brown, ran a residential brokerage in Oakland, Calif. Brown worked part-time in his father’s office through high school. At Santa Clara University, he studied business and was a tight end on the football team. After graduation, he took off with some friends for Washington, D.C.—supporting himself as a bouncer and “having the time of my life”—before returning home several months later to join the brokerage full time.
The year was 1976. “I sold homes for six months,” Brown says, and then another side of the business grabbed his attention, when he got his first commercial listing for an 11-unit building in Oakland.
His personal passion for real estate investing met some early resistance from his father, who thought Brown was being a little too aggressive. But father and son eventually found their groove. In 2000, Brown and his brother, Kevin, persuaded their dad to join them in purchasing a 29-unit apartment building in Oakland. The cost was about $70,000 per unit (just over $2 million). “Kevin and I were responsible for rehabbing the building, and it eventually tripled Dad’s cash flow from the building he traded into the deal,” he recalls. All three reaped the benefits of that investment for eight years until Brown’s dad passed away in 2008. Bill and Kevin sold the building in 2015 for $7 million and traded into two properties.
Brown works with institutional and private capital investors and, in recent years, has focused on finding opportunities in Portland, Ore., where economic conditions are more favorable for investors than in his home state. “I had to leave the rent-control environment in California,” says Brown, raising an issue that has stirred his activism since the start of his career. In fact, a local rent-control proposal sparked his initial involvement in organized real estate at the local level and began his long-time involvement with the California Association of REALTORS®. He served as CAR president in 2008. “Rent control isn’t the way to solve the affordability problem,” he says. “It’s like putting a Band-Aid on a gunshot wound. The solution is to find ways to build more housing.”
While he sees a role for government to support healthy housing markets, he opposes regulation that drives up costs to the point where developers won’t produce needed housing. He cites the recent introduction of impact fees on new residential developments in Oakland that will run as high as $24,000 per unit over the next few years. “If the requirements are too high, it will screw up the metrics for developers,” he says.
Powerful Role Models: Mom and Dad
The new president has never been one to flinch when facing long odds, and he cites the high expectations set by his parents as ongoing inspiration for him and Kevin. Today Kevin, 61, runs Better Homes Realty and a property management company in the same space acquired by their father in 1979. Kevin is also an active association leader, having served as California association president in 2014. He’s currently chair of NAR’s Conventional Financing and Policy Committee. “Early on, Bill persuaded me about how important it is to get involved in association work,” Kevin says.
Brown describes their success-driven parents as “two of the smartest people I have ever met.” They were both loving but strong-willed. When William and Fannie, a nurse who continued to work while earning her Ph.D. in education, were ready for a bigger home for their growing family in the 1950s, they found an available lot to build on in the Oakland Hills neighborhood, near Piedmont. The problem was that the deed contained a restrictive covenant prohibiting the sale of the land to blacks or Chinese. Brown’s parents were undaunted. “It was a foreclosure, so the seller just wanted the money,” he says.
At age seven, Brown began attending the nearby Catholic school, Corpus Christi. He was the school’s first and, at the time, only black student. “Someone has to do it,” Brown recalled his mother telling him. “And it’ll make you tougher.” After an inauspicious beginning that included a racial slur from a classmate on his first day, everyone eventually became friends. “We even started a rock band in 5th grade,” he says. “It took years for me to realize how radical my being there really was, but I think it really proves how, if given a chance, people will accept, come together, and excel in a different environment.”
Corpus Christi Church remains Brown’s spiritual home and today has a far more diverse congregation and student body. The Rev. Leo Edgerly, who is African-American, arrived at the church in 1999 and formed a friendship with Brown and his family. Asked to describe Brown, Edgerly recalls the words of poet William Wordsworth: “The child is the father of the man.” Brown, Edgerly says, is the product of his parents’ teachings about personal responsibility, morals, and dignity.
Get to know all of NAR’s 2017 leaders at leadership.realtor.
Kevin Brown offers another perspective on his brother as a natural-born risk-taker. As boys, there was a time the two of them, along with a group of friends, spotted a rope swing hanging over a ravine in their neighborhood. “Bill was the one who ran toward it and jumped on the swing,” he says. “And when it snapped, he rolled down the hill, dusted himself off, and got up. It didn’t rattle him. He has always believed you don’t get anywhere in life without taking on some risk.”
Second-time Home Buyer
Brown recently took another leap. Last spring, he and his wife Heather closed on a Tuscan-style home in the San Francisco–East Bay suburb of Alamo. The experience put them in touch at the most visceral level with what many consumers, and their agents, are experiencing these days. “We looked for two years, visited dozens of houses, and wrote three offers on houses we didn’t get,” says Brown.
Naturally, the Browns were indebted to REALTOR® Barry Zwahlen, who remained steadfast through the ups and downs, even resorting to old-school door-knocking at one point in search of potential sellers. Zwahlen, for his part, was thrilled to get the Browns to the closing table. “They were terrific clients,” says Zwahlen, a broker-associate with J. Rockcliff, REALTORS®, in nearby Danville, Calif. “We respected each other throughout the process. Bill is a ‘no b.s.,’ make-it-happen kind of person.”
During a sunny September tour through their new place, Bill and Heather exhibited the delight and relief that comes with settling into a stylish new home after an arduous search. The couple will be even more elated when the cavernous rectangle that’s been carved into the hilly backyard takes shape as an infinity pool. “It will be ready by summer,” he sighs, barely masking his impatience at the slow pace of the backyard construction project.
Brown had lived in his prior home in the Oakland Hills for 36 years and was joined there by Heather and her son, Cole, then 9, when the couple married in 2007. He first met Heather Benson, who is also a REALTOR®, in the early 2000s during legislative meetings of the California Association of REALTORS® in Sacramento. Something clicked between them when they met again at an RPAC meeting in Washington. “We talked on the phone every day after that,” recalls Heather, who lived in southern California at the time.
In 2007, Heather also happened to be president of the North San Diego Association of REALTORS®. Her year of regularly commuting nearly 500 miles to serve her local board, she quips, was nearly as harried as being married to an NAR president.
Heather describes her husband as “ethical, efficient, and absolutely loyal.” A case in point: When his beloved Oakland Raiders moved to Los Angeles from 1982 to 1994, Brown religiously commuted to L.A. to continue attending their home games. She also marveled at how easily he took on the role of a stepparent to Cole, who is now a junior at San Diego State University. “He totally embraced it. He’s a real family guy,” she says.
His loyalty extends to his REALTOR® family, too. For the year ahead, count on having a president who is intensely focused on how to help you thrive in your business today—and far into the future.