TAMPA, Fla. — After five years of post-boom gloom, especially here in Florida, the real-estate industry is using this week's Republican convention to flex its political muscles.
The lobbying offensive comes as the industry begins to worry that the mortgage-interest deduction may be targeted as part of potential changes to the tax code.
There are only a few big sources of potential revenue in any deal to cut tax rates and limit deductions in order to reduce the federal budget deficit, as Republican presidential nominee Mitt Romney has pledged to do. With the deduction standing out as one of the biggest pots of potential cash, the real-estate industry is seeking to convince politicians there will be negative consequences for targeting it.
"By most estimates there can't be a robust recovery until real estate recovers," Jeffrey DeBoer, president of the Real Estate Roundtable, an umbrella organization for real-estate trade groups, said at an industry event here this week. "Housing itself represents about a third of Americans' wealth."
The Real Estate Roundtable event on Tuesday featured remarks from co-chairs of the Senate and House Real Estate caucuses — Sen. Johnny Isakson, R-Ga., and Rep. Mike Turner, R-Ohio, — and gave representatives of various industry trade groups a chance to pose questions to them. (A similar event is planned next week in Charlotte with Democratic lawmakers.)
"You've got to speak out," Isakson told the audience of industry officials Tuesday, "because we are right now in a regulatory recession in housing. The number-one road to recovery is residential and commercial real estate."
Turner added: "We are in a position in Washington where the regulatory process is as out of control as the spending."
Both commercial and residential lenders decried the impact of rules in Dodd-Frank that will require banks that issue mortgage-backed securities to retain some of the risk on their own balance sheets.
In the residential sphere, Dodd-Frank provides an exception to the risk-retention rules for a class of high-quality loans known as qualified residential mortgages. But industry officials and many members of Congress argue that an initial proposal from regulators drew that exception too narrowly, limiting it to borrowers who make down payments of 20% or more.
Isakson argued Tuesday that the risk-retention rules in Dodd-Frank have been disastrous.
"There should be a down payment, but 5% is enough," he said. "So my message is: Let's not throw out the baby with the bathwater."
In an interview after the event, Isakson expressed pessimism about the chances that regulators will loosen the qualified residential mortgage standards in a significant way.
"I'm not hearing anything, which leads me to suspect they're waiting for the election to be over, and they're going to come right back and try and pass what they tried to get ratified before," Isakson said. "I'm hoping that the voters will speak out in this election. We're trying to get ourselves back to reasonable regulation."
But the event was just one part of the industry's strategy to show its political strength.
In a series of ads in Tampa this week, the National Association of Home Builders has been trying to send a message about the real estate industry's clout to convention-goers.
"The road to the White House will be a driveway," read one ad, which appeared in a special Tampa edition of The Hill. "Housing = Jobs."
In big letters, the ad cited polling research that found that 68% of voters would be less likely to vote for a candidate who proposed eliminating the mortgage interest deduction.
While Romney has vowed to maintain the deduction, he reportedly has also told donors that he would limit its application on second homes, and he would also limit the deduction for state and local property taxes.
The Republican Party platform, released Tuesday, did not contain language that was included in the party's 2008 platform about the value of preserving the mortgage interest deduction.
The decision to exclude that language reportedly came after former Sen. Jim Talent, a Romney adviser, argued that specific provisions on the tax code would get in the way of a budget deal.
On other issues, the GOP platform provides stronger support for the mortgage industry.
For example, it endorses the idea that lenders who originate so-called qualified mortgages should get a legal safe harbor from litigation. That issue is currently the subject of a behind-the-scenes fight between mortgage lenders and consumer groups.
In addition, the Republican platform states that the Federal Housing Administration is crowding out the private sector and must be downsized to help only specific classes of borrowers, such as first-time homebuyers.
The GOP platform, which devotes more than twice as many words to housing policy as either party's platform did four years ago, expresses opposition to the use of taxpayer dollars for principal write-downs, a position that has support in the mortgage industry.
And while the Republican platform states that "Homeownership expands personal liberty, builds communities, and helps Americans create wealth," it adds that "public policy must be balanced to reflect the needs of Americans who choose to rent."
The GOP platform places sizable blame for the struggles of the housing market on the Obama Administration. "The response of the current administration has done little to improve, and much to worsen, the situation," it states.
On the convention floor, similar sentiments could be heard from members of the Florida delegation. Home prices in the Sunshine State have fallen 43% in the last five years, according to data from Zillow.com, though prices have ticked up slightly in the last year.
"It's like when you pull off a Band-Aid. You can pull it off really slow, and that's basically what Obama has said," said Richard DeNapoli, who is chairman of the Broward County Republican Party and a member of the state's Real Estate Commission. "And that has caused very slow growth."
Frank Messana, a Realtor in Coral Springs who is also a delegate to the convention, said: "Since 2008, every time the federal government tries to step in and fix the housing market, they make it worse."
But Messana is probably not the best example for the argument that the Obama administration's housing policies have failed. A condominium that Messana bought for $95,000 is now worth just $28,000, but he recently got a mortgage modification.
"I'm one of the few that got one," he said.