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Malkasian: Realtors' association head reflects on 36 years of lobbying

By Brian E. Clark
For WisBusiness.com

After eight years in the political wilderness, the Wisconsin Realtors Association has re-emerged as a major player on the state’s political scene.

Headed by Bill Malkasian for more than three decades, the group was often at odds with former Gov. Jim Doyle. But the association backed Scott Walker in the 2010 governor’s race against Milwaukee Mayor Tom Barrett.

Malkasian, who's leaving the WRA for a position with the national association, said his group backed Doyle opponents and suffered for it during Doyle's two terms.

“We didn’t support him, and we didn’t get very much," Malkasian mused.

"We were probably on the outside in his eight years than we were on the inside. It wasn’t personal, but he didn’t like what the organization did at election time. And people who know politics know that if you go against somebody, you either have to try to make it up or sit on the sidelines and we pretty much sat on the sidelines.”

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Things are different now. Earlier this year, the WRA scored a major coup when it successfully pushed to overturn wind energy rules that the group thought would be detrimental to state property values.

Now Malkasian, a 59-year-old Wisconsin native, is taking his political acumen to the National Association of Realtors. He will remain in Madison and, come October, become a vice president for political strategic planning, leading a nationwide based initiative on political and legislative engagement at the federal, state and local levels of government.

The new head of the WRA will be Michael Theo, who has been vice president for legal and public affairs for the WRA since 1985.

In a wide-ranging interview, Malkasian bemoaned the increasingly partisan state of Wisconsin politics. But he said Wisconsin real estate values, compared to many other parts of the country, are holding up relatively well.

“Wisconsin certainly did not have the bubble effect that you saw in places like Las Vegas, Arizona, California and Florida,” he said. “We’ve had problems with foreclosures and price reductions on property, but not like in other parts of the country.”

Still, he said, it’s a buyer’s market with high numbers of homes for sale, sellers willing to negotiate and mortgage rates at 30-year lows. However, he noted, it’s become more difficult for many people to get a mortgage.

“If you have a good credit rating and… can make the mortgage payment, it’s a great time to buy,” said Malkasian, who traced the housing bubble to federal efforts by the Bush and Clinton administrations in the 1990s to make owning a home easier.

Malkasian said real estate remains a local marketplace. Homes in some Madison neighborhoods sell within days of being listed because of price, location and uniqueness of the property.

Conversely, he said he knows of condominiums in Madison that have been for sale for two years.

Malkasian said people are “dreaming” if they think that the real estate market will ever return to the heady days of 2005-2006.

That won’t happen because credit is much tighter, which means that many people won't be able to buy homes, he said. Secondly, pricing has leveled off and 10 to 15 percent appreciation on housing won’t happen, he added.

“Normal appreciation is 2 to 3 percent… but we certainly have a ways to go to get back to that point and where we are today,” he said. “Right now we are sort of trolling along the bottom in pricing. In time, as the economy gets better and the unemployment rate comes down, you’ll see normal in the market.”

Malkasian said abuse of loan and mortgage programs on the national level led to fraud.

“I don’t think Wisconsin lenders were the problem,” he said. “But now we are paying the price. What used to be local control is now federal control, so it’s sort of a one size fits all.''

Malkasian said he'd like to see the government “get out of the way” and let the market work.

Although he said it sounds “cruel,” Malkasian advocates eliminating programs that keep people in their houses if they can’t make payments.

“We need to find a way with dignity and grace to get those people out and get them into a rental situation so those properties can be sold,” he said. “As long as we have this glut of property, the market can’t normalize itself.”

He said the real estate industry is intrigued by a potential federal program that would allow investors to buy distressed homes for 50 or 60 cents on the dollar, turn them into rentals and get them off the market.

“When that happens, you’ll see appreciation of property again versus foreclosures that are happening,” he said. “So it’s a combination of ‘get out of the way’ and create an incentive for investors to come in and buy up some of this stuff.”

Malkasian said he thinks it will take three to five years for Wisconsin’s real estate market to return to equilibrium. For states like California, Nevada, Arizona and Florida, it could be 10 or 15 years, he added.

The long-time WRA leader said he's looking forward to his new post with the national association, which created a major political initiative this year by increasing member dues by $40 annually.

“The goal is to help state and local Realtor groups to become more effective in their political activities and their political involvement,” he said. The program will be rolled out in 2012 and last for five years.

He had planned to retire next year from the WRA and the group’s board had already selected Theo as his successor.

Malkasian, who joined the WRA at age 23 as its legislative director, said the organization has changed a great deal during his tenure. He took over at 27.

“So I’ve been here for 36 years.” he said. “We started with a staff of about 10 people and a budget of $700,000. Today our total budget, including all of our funds, is about $8 million. It’s been a heck of an evolution.”

He said the staff has grown to 30 and the organization has become “very sophisticated” about its lobbying and education efforts.

On the windmill siting controversy, Malkasian said his group has been meeting with legislators and environmental leaders, among others, to come up with new rules.

“We have no desire to stop something like that,” he said. “But from a private property rights standpoint, we didn’t think it was balanced. We thought it needed to be changed and was trying to be pushed through in the last months of the Doyle administration and we didn’t like that.”

He said the Realtors’ strategy under his leadership has not been “just to block and go away,” but work out a compromise “and make something happen.”

Malkasian said he believes the state of Wisconsin politics is more than a little bruised after the budget battles and recalls of recent months. He recalled the days of opponents getting together for a drink and to play cards after fighting on the Assembly or Senate floor.

“Today it’s much more brutal and ‘my way or the highway,’” he said.

That has created divides that will take a long time to heal, he predicted.

“From a special-interest standpoint, it’s very hard because you can’t do something unless you have both sides of the aisle,” he said. “If you are going to be in this business, you don’t burn bridges. So it’s a challenge.”

Malkasian said the last few months had been hard for him to experience on a personal basis. Malkasian declined to pick a favorite governor, though he said working with Republican Tommy Thomson for 16 years was “a lot of fun.” He also described Walker as “energetic” and called Tony Earl, a Democrat, a “dear friend, even though we fought with him on a lot of issues.''

“I think Walker is the eighth governor I’ve worked with,” he said. “I’ve seen it all and I don’t like the divisiveness. I want to get in there, get the job done and pass or defeat something and move on.”

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