$40 political survival proposal – updated.

Many of you have commented on my earlier blog regarding the proposed $40 dues increase to fund the Realtor Political Survival Campaign. As you recall, that will be voted on in May at our annual meeting in DC. Yesterday we had a 1 1/2 hour webinar with NAR leadership discussing why the additional funding was necessary. At that time the possibility of putting the Public Awareness campaign on haitus for a couple years and using those funds for political purposes was presented as a sort of plan B. According to NAR stats however, that public awareness campaign is a great success – although most of you would just as soon it went away.

Anyway, for those of you opposed to an additional $40 hit on your dues, it appears your voices have been heard, Now you just need to make sure your local association and your NAR Directors are aware of your feelings.

From NAR President Ron Phipps:

To:        Local Board and State Association Presidents

This letter constitutes the official notice required by Article II, Section 10 of the Bylaws of the NATIONAL ASSOCIATION OF REALTORS® of a proposal to eliminate a previously approved membership assessment.

In May of 2010 the NAR Board of Directors approved an assessment of $35 per member for 2011-2013 to be used to continue the Public Awareness Campaign during those years.  The Finance Committee has now offered two alternative proposals regarding funding for the REALTOR® Party Political Survival Initiative.  One proposal eliminates the Public Awareness Campaign $35 Assessment for 2012 and 2013.  That proposal also increases NAR dues by $35 per year to fund the REALTOR® Party Political Survival Initiative.

The other proposal offered by the Finance Committee is being recommended by the NAR Executive Committee.  That proposal would increase NAR Dues by $40 per year to fund the REALTOR® Party Political Survival Initiative.  The Public Awareness Campaign $35 Assessment would remain in effect during 2012 and 2013.

Dues, membership assessments and amendments to membership assessments for the National Association are adopted by the Board of Directors of the National Association.  These issues will be coming before the Board of Directors at its meeting on May 14, 2011.

Sincerely,

Ron Phipps
2011 NAR President


Fannie & Freddie incentives for buyers & agents.

Fannie Offers Incentives for HomePath Properties
On April 11, 2011, Fannie Mae announced new buyer and selling agent incentives in connection with the sale of Fannie Mae-owned properties (HomePath properties).
A buyer of a HomePath property to be used as the buyer’s primary residence can receive up to 3.5% of the final sales price to be used toward closing costs.
A selling agent bonus is available in four states—California, Washington, Arizona, and Texas. In these four states, a bonus is being offered to selling agents who represent a buyer who will use the property as a primary residence. For properties in California and Washington, the selling agent bonus is $1,000. For properties in Arizona and Texas, the bonus is $500.
To qualify for either incentive, the buyer and, for properties in one of the four states, the selling agent must meet certain requirements, including the following. The buyer and selling agent incentive must be requested at the initial offer submission. The initial offer must be submitted on or after April 11, 2011, and the property sale must close on or before June 30, 2011. The buyer must use the property as a primary residence (auction, pool and investor sales are excluded). Check the HomePath website for more details. If you have questions, please CONTACT Jeff Lischer at 202-383-1117 or jlischer@realtors.org with any questions.


What a difference 5 years makes. Temecula/Murrieta Condo prices 2006 – 2011

Inspired by a post of Mirela Monte’s showing what a difference the past 5 years have made to ocean front condos in Myrtle Beach SC, I decided to see what had transpired locally. I mean, we were the foreclosure capitol of the country for awhile back in 2008 & 2009 and our prices dropped about 45% – 55% throughout the region for single family homes. They’re still down but have been stable to slightly higher the past two years and properties are selling well the past 3 years. But I hadn’t really taken a look specifically at condo’s for awhile. I probably won’t do it again for awhile either – weak stomach.

arboretum interiorcondo pond

So here is a comparison of condo prices in several of our better known communities:

Location            Size    Br/Ba            Q1 2006 (73 sold)        Q1 2011 (93 sold)    %

Arboretum          730    1/1                     $235,000                     $70,000        -70%

Madison              854    1/1                     $220,000                     $68,000        -69%

Bucaneer Bay       961    2/2                    $295,000                   $104,000        -65%

Anchor Bay       1,016    2/2.5                  $305,000                   $105,000        -65%

Madison            1,159    2/2                     $285,000                     $90,000        -68%

Arboretum        1,246    2/2                    $314,977                    $135,000        -57%

Pelican Bay        1,387    3/2.5                 $337,900                   $128,000        -62%

Socorro            1,508    3/2.5                  $345,000                   $133,600        -61%

Arboretum        1,745    3/2.5                  $365,000                   $175,000        -52%

All I can tell you for sure is that a lot of first-timers lost a lot of money during the past 5 years. BUT, if you’re in a position to buy into one right now, your timing couldn’t be better. There’s almost nowhere for these prices to go but up. The problem right now is that investors have been scooping these up as fast as they can so the ratio of owner occupied properties has dropped so far most first timers can no longer get FHA financing in these developments. But for an investor is there any question? You can generate a positive cash flow from day one, hold onto it for 3 – 5 years and turn a tidy little profit.


Cash-out now qualifies for Bail-Out. Sweet.

Too many people were being turned away because they had taken cash out of their equity. So now you can enjoy that nice vacation, drive a nice car and still get federal bail-out money. Sweet!

Mortgage aid offered to those who cashed out equity
The California Housing Finance Agency announced this week that people who cashed out equity on their home now are eligible for three of the four “Keep Your Home California” programs.

MAKING SENSE OF THE STORY

  • Keep Your Home California is a state-run program funded with $2 billion from the U.S. Treasury’s Hardest Hit Fund.  It is designed to help low- and moderate-income people who are unemployed or owe more than their home is worth pay their mortgage.
  • There are four individual programs that fall under Keep Your Home California.  Eligible homeowners can get up to $50,000 in assistance from one or more of the four programs combined.
  • Under the new rules, people who took equity out of their homes will be eligible for the unemployment mortgage assistance, mortgage reinstatement assistance, and transition assistance programs if they meet all the other program requirements.  Homeowners who cashed out equity will continue to be ineligible for the principal reduction program.
  • When the program first started, homeowners who had tapped the equity in their homes were ineligible for the programs.  CalHFA decided to include these homeowners due to the large number of homeowners who were being turned away for assistance.
  • Under the program revisions, homeowners who originated mortgages after Jan. 1, 2009 also are eligible for the same three programs.  Originally, these borrowers were excluded because they also are excluded under the federal Home Affordable Modification Program, so CalHFA wanted to be consistent with HAMP.
  • To qualify for any of the four programs, homeowners must fall below certain income limits, must be living in the home, and cannot own a second home, among other criteria.  For additional requirements, visit www.keepyourhomecalifornia.org/eligibility.htm.

What a Government Shutdown Means for REALTORS®

The current continuing resolution (CR) providing funding for government operations is set to expire on April 8, 2011. If legislation providing for funding is not signed into law to extend funding after April 8, the federal government could shut down. This means many, but not all, government programs, including some that impact federal housing and mortgage programs, could grind to a halt as early as April 9, 2011. While the true impact of a shutdown is unclear until it actually begins below is a synopsis of how federal housing programs will likely operate in the event of a shutdown. The Office of Management and Budget (OMB) requires each agency to have contingency plans in place and reportedly has instructed agencies to not provide specific information on impacted operations.

Federal Housing Administration

FHA cannot offer endorsements for any new loans in the Single Family Program and cannot make commitments in the Multi-family Program in the event of a shutdown. FHA will maintain operational activities including paying claims and collecting premiums. Management & Marketing (M&M) Contractors managing the REO portfolio can continue to operate.

VA Loan Guaranty Program

Lenders may continue to process and guaranty mortgages through the Loan Guaranty program in the event of a government shutdown.

Internal Revenue Service (IRS)

Should the federal government shut down, the IRS cannot process federal income tax returns or issue refunds (but it can deposit tax payments). Consumers who were expecting to use their tax returns as part of the down payment for a home purchase will temporarily not have access to these refunds.

Flood Insurance

The Federal Emergency Management Agency (FEMA) confirmed that the National Flood Insurance Program (NFIP) will not be impacted by a government shutdown.

Rural Housing Programs

For the US Department of Agriculture programs, essential personnel working during a shutdown do not include field office staff who typically issue conditional commitments, loan note guarantees, and modification approvals. Thus, lender will not receive approvals during the shutdown. If the lender has already received a conditional commitment from the Rural Development office, then the lender may proceed to close those loans during the shutdown. A conditional commitment, which is good for 90 days, is given to a lender once a USDA Underwriter approves the loan. If a commitment was already issued, the funds were already set aside and the lender may close the loan at its leisure. If Rural Development has not issued a conditional commitment, the lender must wait until funding legislation is enacted before closing a loan.

Government Sponsored Enterprises

Fannie Mae and Freddie Mac will continue operating normally, as will their regulator, the Federal Housing Finance Agency.

Treasury

No official word as of yet, but the Making Home Affordable program, including HAMP and HAFA, may not be affected as the program is funded through the Emergency Economic Stabilization Act which is mandatory spending not discretionary.

Background Information on Government Shutdown

HJ Res. 48 extends the Continuing Appropriations Act, 2011 (Public Law 112-6) to April 8, 2011. If another continuing resolution (CR) or budget is not signed into law, the federal government could shut down on April 9, 2011. This requires the furlough of non-emergency personnel and the curtailment of federal agency activities. Federal contractors cannot be paid. Programs funded by annual appropriations are directly impacted though programs funded by laws other than appropriations (such as Social Security) may also be impacted. The last government shutdown occurred during fiscal year (FY) 1996 and lasted 21 days, from December 16, 1995 through January 6, 1996.

The Anti-Deficiency Act is the primary law preventing government activity when no budget or CR is enacted. The act, found in 31 U.S.C., prohibits:

  • Making or authorizing an expenditure from, or creating or authorizing an obligation under, any appropriation or fund in excess of the amount available in the appropriation or fund unless authorized by law.
  • Involving the government in any obligation to pay money before funds have been appropriated, unless otherwise allowed by law.
  • Accepting voluntary services for the United States, or employing personal services not authorized by law, except in cases of emergency involving the safety of human life or the protection of property.
  • Making obligations or expenditures in excess of an apportionment or reapportionment, or in excess of the amount permitted by agency regulations

Basically, the government may not make payments or commitments unless there is enough money in the bank. According to the US Office of Personnel Management, an agency must shut down activities not excepted by the US Office of Management and Budget (OMB) when it no longer has the funds to operate. OPM recommends that agencies:

  1. communicate with employees and representatives about a potential shutdown;
  2. prepare draft furlough notices;
  3. determine which positions are excepted from the furlough according to OMB guidance.

Federal agencies have been required to complete contingency plans since 1980. OMB has three different bulletins that agencies may reference in the development of their shutdown plans. Plans must include, among other things, estimated time to complete a shutdown and the number of employees to be excepted. The President, Members of Congress, presidential appointees, certain legislative branch employees, and federal excepted employees are not subject to the furlough.

Sources

House Resolution 3082, “An Act making appropriations for military construction, the Department of Veterans Affairs, and related agencies for the fiscal year ending September 30, 2010, and for other purposes.”
http://www.gpo.gov/fdsys/pkg/BILLS-111hr3082eas2/pdf/BILLS-111hr3082eas2.pdf

Antideficiency Act Background. US Government Accountability Office.
http://gao.gov/ada/antideficiency.htm

Guidance and Information on Furloughs. US Office of Personnel Management.
http://www.opm.gov/furlough/furlough.asp


Update on Keep Your Home California Program

Update on the ‘Keep Your Home California’ program.

This $2 Billion program, announced a few months ago to great fanfare but little result, has determined it’s time to expand the programs due to it’s thus far limited reach. The program is designed for low and moderate income borrowers who refinanced their home, took out a home equity line of credit (HELOC), or are underwater on their loans and now find themselves in trouble (duh). The program features four separate sections to help these borrowers including one to get caught up on their loan, another to reduce their principle, one to provide relocation and transition assistance and one to subsidize payments to unemployed homeowners.

Administered from a federal grant by the California Housing Finance Agency, the programs director says they started slow by design. Before jumping in with both feet they wanted to guage the response, see what kind of people were applying and why they were not qualifying. The director expects the program ultimately to help 100,000 Californians.

Of course as I noted in an earlier post when the program was announced, the program is voluntary for lenders. Yeah, you read that right. Lenders will voluntarily agree to accept partial back payments or reduced principle for borrowers who took cash out of their homes during the boom times. Low to moderate income buyers, who are in financial trouble. Yeah, the banks haven’t demonstrated much pro-activity in helping anybody at all, let alone low to moderate income folks. I’m sure this will all work out fine. Even the director admits that ‘only some lenders are participating’. Go figure.

Oh well, I guess if we can keep 100,000 low to moderate income people in their homes here while other demographic groups are ignored by HAMP and HAFA and other bail-outs, that’s a good thing, eh?


Why would the building industry support additional taxes on housing?

‘It has come to our attention that the California Building Industry Association (CBIA) has issued a Call to Action urging its members to tell the Federal Housing Finance Agency (FHFA) to reject a proposed rule that would prohibit private transfer fees.  The California Association of Realtors strongly supports the prohibition and urges you to ignore the Call to Action from the CBIA if you or any of your members receive it.  C.A.R. is currently drafting a letter outlining its position on the issue for the FHFA.’

You may recall a couple years back when CAR tried to get our legislature to pass a bill prohibiting private transfer fees. We were aligned against an odd coalition involving our some-time allies the Building Industry Association who were allied with a variety of environmental groups like the Sierra Club and others. Our bill was defeated but we did manage to get a corollary bill passed that at least required properties with private transfer taxes attached to them to at least disclose them to prospective buyers. Prior to that it was just one of those hidden items on page 57 of your title report that most people didn’t find out about until they went to sell their house.

SURPRISE!!! Here’s a bill for another $2,749 that you, Mr. Seller, or you, Mr. Buyer, or you Ms. Agent, get to pay..

Now you might be asking yourself – ‘Self, why would the building industry be in favor of an additional transfer tax on a home – especially a private transfer tax?’ Well according to the BIA, ‘private transfer taxes are used to finance a variety of environmental mitigation, community amenities and affordable housing requirements’. According to their website – if  the current FHFA proposal is enacted the following results may occur:

  • Property values could suffer (already have. Will suffer more in areas with additional taxes attached to the property)
  • Home sales transactions will become cumbersome (really? Having another tax on the property will make the transaction easier?)
  • Lending will be harder to obtain (and having another tax on the property will make it easier? Come on!)
  • Taxes and home owners association dues will increase (too late. You’ll just be one more tax)
  • Environmental conservation efforts will be stifled (no, environmental extremist agendas will be stifled)
  • The real estate market will suffer further (yep, another tax on housing will really help us climb out of this hole)
  • An individual’s ability to choose where they want to live will be inhibited (well yeah, they might choose not to live in an area with a transfer tax)
  • Community programming and quality of life will be compromised (yeah, a tax that has no direct benefit to the community will really compromise it)

Sounds pretty dire, doesn’t it? But don’t be fooled. There are areas of the country where private transfer taxes are needed and I’ve heard from fellow Realtors in some of those areas. But those areas are excluded from this legislation. Why? Because there’s a nexus between the funds being collected from the fees and where they are spent – which is right on the same project. For example, Condo developments that rely on these fees for maintenance and amenities upkeep are exempt as are a variety of other direct benefit uses.

But for California, and indeed much of the country, you need read no further than the first sentence in the BIA claim – ‘finance a variety of environmental mitigation.’ Translation ; it’s a way for developers to knuckle under to environmentalists demands without incurring any cost themselves by passing it along to future home purchasers.

Here’s the typical California scenario: A developer has an option on a tract of land where they would like to build new homes. An eco-mill (environmentalist group set up to find out about this kind of stuff, see – ambulance chasing lawyer) finds about about this developers plan and approaches the builder.

Eco-mill: “We don’t want anything built there because there are maybe endangered species or trees or we just want to preserve the wildlife there. If you move forward with your plans we will sue you from here to kingdom come and even though you might eventually prevail in court, you will spend a ton of money and ultimately it will drive your cost to build these homes up past the point where they are economically feasible.”

Developer: “Jeez, what can we do. There’s a need for houses in this area and we’ll be building a good affordable product that will be really good for young families?”

Eco-:mill “Well, maybe we can reach an accommodation – and it won’t cost you a dime.”

Developer: “That sounds delicious – what do we have to do?”

Eco-mill: “Just attach this private transfer tax to your homes. Every time that home gets resold for the next 30 or 50 years, that tax will be collected and we’ll rake in millions of dollars over the life of the property.”

Developer “And what will you do with the money?”

Eco-mill: “Oh don’t worry abut that.”

Developer: “But will you spend it in the area, maybe help build a new road or a park for the development, contribute to a school or help build a new fire station or something to benefit the residents who will be paying the tax?”

Eco-mill: “Are you friggin crazy? We are totally unregulated. We might spend part of it on new Prius’s for our members, and we might raise our own salaries and we’ll probably spend part of it to research other poor schmucks like you who are thinking about building somewhere else and we’ll no doubt spend part of it suing developers who don’t just fold up like a cheap card table when we threaten them.”

Developer: “Hmmm, well I don’t like that one bit but as long as you promise to leave us alone I guess we’ll just go along and get along.”

Eco-mill: “Thatta boy. Next.”

Think I’m making that up? That exact scenario plays out numerous times throughout our state – less now that developers are building fewer homes, but it was so prevalent during the boom days that whole eco-mills were set up around the product. There was even a Texas company on-line offering the opportunity to help you set up an individual private transfer tax on your own home so that after you sold it, any future sellers would have to send you a check.Yeah, really.

The scenario also happened right here in Temecula with a group that was threatening to stop a well known developer from building a big box store in South Temecula. In that case, because it was a  single store rather than a development with future resale, the settlement was for an upfront fee and the organization went away.

And that’s how it works.

So if you get an email from colleagues at the Building Industry asking to help defeat this FHFA proposal for a private transfer tax, pass on it. NAR has been fighting hard to get this provision included at a national level and at least 11 states have passed a similar measure prohibiting these private transfer taxes. States like California that have no political will (balls) to step up and take a stand against these eco-terrorists, will only benefit from the passage of this proposal.

Well, that’s just my opinion. I could be wrong.


Gov says drought is over – rates rise in celebration.

Governor: Drought is over.

What a great headline on the front page of our daily newspaper today. Accompanied by a photo of two goofs standing out in the snow with some 15′ long stick suspended from a ski pole measuring how heavy snow is. I don’t know – I guess it was meant to convince us the Gov. knows scientific stuff.

But the message was clear, our state reservoirs have reached such high levels after two years of rainy winters and plenty of snow up high that the drought declared in 2008 no longer exists. WhooHoo! The biggest reservoir in the system, Oroville Dam, is at 104% of its historical average, Shasta is at 111% of historical, our current snowpack is at 165% of normal. Even the Colorado River basins, Lake Mead,  Diamond Valley and others are filling up fast.

But wait – they remind us that conservation remains necessary because of the precarious condition of the Sacramento River Delta. Even though they’ve got all that water, a lot of it up north, doesn’t mean they will be releasing any more for us down south because it would still kill the little Delta Smelt – that 3 inch long good-for-nothing fish that gets sucked into pumps because it’s too stupid to swim away. Yeah, we still got that.

But even Southern California reserves are up – plenty of water for now. That means the 50%+ increases in price they’ve jacked onto us the past two years will stabilize? Maybe even drop a little since water is now plentiful? After all, the increases were to encourage conservation during the tough times and reduce our dependence on imported water.

And we’ve done that right?

Usage in San Diego County is down 20%, other areas are averaging between 15% and 43% reductions over the past 2 years. I mean, they beat us over the head with this. Gotta conserve. Low flow toilets, desert landscape, 5 minute showers,  if it’s yellow it’s mellow, if it’s brown flush it down, you name it, we’ve done it.  Heck I’m even drinking my whiskey neat because I don’t want to waste the water for mix or for ice.

We get that: Conservation = good. No conservation = expensive.

So now we get a break, right?

Yeah, I got your break right here, Pal. This is the part where you just have to appreciate the humor of the situation or you’re likely to go on a rampage with multiple dangerous weapons and a bad attitude. According to one water department spokehole, “all that water is a blessing and a bane.” A what? A bane you ignorant savages! Because now they have all this water but guess what? They’re not selling enough to cover their asses – I mean expenses. Honest to Jesus H, we’ll now be paying higher water bills because we’re not using enough. I believe judicious use of the ‘F’ word might be appropriate here.

Sounds like the oil companies. “Hey, they’re using too much gas, lets jack up the price to get them to conserve. Hey they’re not driving enough, we need to jack up the price to boost our profit. Hey, there’s a crisis in Libya, let’s jack up our price because we can. Hey, we don’t even need a good reason anymore, lets just jack up our price because….. Jackholes!

So we’ve got water flowing out the kazoo but we’re still scheduled for another 12.5% in rate hikes by 2012. It would appear that we’re damned if we do and damned if we don’t. If anybody can suggest a scenario out of this wherein the consumer actually wins a little, please feel free to suggest it.

Aw what the hell. It’s just California. Grab a little medicinal weed, go to the beach and forget about it.



Realtors! Please answer your Call for Action.

Stay Active. Answer the CFA!, Posted by Vince

Posted: 30 Mar 2011 07:18 AM PDT

Doctors consistently tell us that we can keep ourselves healthy if we stay active. Without consistent exercise, our health deteriorates.

It’s the same in politics. If REALTORS® continue to stay active on Capitol Hill, we can help bring our industry back to health and maintain its health. If our participation slides, our businesses slide.

We sent out a Call for Action on Monday to all REALTORS® on the mortgage interest deduction. It tells Congress not to trim the MID one bit. It also asks members of the House of Representatives to back House Resolution 25 which supports the MID in its current form.

We’ve already seen a strong participation rate on this one. But when we say we need “everyone” on board answering the Call for Action, we mean it. This is a serious issue that will affect homeowners, consumers, and every single REALTOR® in America.

There’s no association for home owners out there. There’s only us. NAR represents the 75 million home owners.

So it’s crucial that REALTORS® remain active and answer the CFA today. Now is your moment to let your member of Congress know what’s important to you.

If you need more convincing, check out the letter-to-the-editor on the MID in the Chicago Tribune from NAR’s Chief Economist. Do you think it’s a good time to ask homeowners to cough up another $3,050? I don’t either.

Thank you for your participation! I promise you, it’s making a big difference. — Vince Malta, 2011 NAR Vice President and Liaison to Government Affairs


Redistricting & Open Primaries – it's a whole new world.

Most of you are aware that we will be undergoing a massive redistricting effort  that will impact our County, our State and our Federal elective districts. Certainly in California we’ve all been aware that in the past decade the political boundaries 1) make no sense and 2) produce landslides for the incumbent party. There are definite Republican Districts and definite Democratic Districts and it’s pretty much a waste of time for the alternate party to even field a candidate in those races. One seat has changed parties during the past 10 years out of over 250 separate races. 1!.

But that’s all about to change. Californians voted last fall to form a commission to draw the new districts – unlike the last time they were drawn when we let the politicians draw their own. The Commissions report is due out by August and our area will be in for some changes because our region has grown faster than most regions of the state. Our County Supervisor boundaries will be redrawn to reflect the growth in Southwest County and, with the potential election of current Assemblyman Kevin Jeffries to a supervisorial seat, our region could see 2 Supervisors representing Southwest County for the first time EVER. That’s good.

At the state level we probably won’t see much change but the district  boundaries will definitely be redrawn to make some sense by keeping contiguous city interests in one sphere. Right now Jeffries has a district that runs in skinny strips hither and yon, crossing over Nestande’s district in places, running into San Diego County – makes no sense. Our Senatorial District may also see some shifts as Emmerson keeps a more contiguous area of Riverside County while Anderson gives up some of the northern portion of his San Diego District that starts in Chula Vista.

Our regions also stands to pick up an additional federal representative as more of the population has shifted inland from coastal areas. With out region currently split between Calvert, Bono-Mack and Issa, we’ll have to see what that means.

Further complicating the political landscape is the new open primary rule, again resulting from the last election. There will no longer be Republican and Democratic primaries, just one big free-fer-all. The top two candidates will run against each other in the fall. The theory is that this will draw more candidates from the middle of the road rather than the ideological edges of party politics. One thing it will do for sure is cost way more money. The rest we’ll just have to see about.

Nationally known prognosticator Charlie Cook has recently published his first blush on what that all means to us. His exhaustive report covers the entire country as well as every district within the state. I’ve included an excerpt here dealing only with our immediate area. Stay tuned. This is going to be an interesting season leading up to next years election.

The Charlie Cool Political Report

California
Redistricting Authority: Commission
Ideal New District Population: 702,905
Current Partisan Breakdown: 34 D, 19 R
2012 Cook Redistricting Forecast: 35 D, 18 R

San Bernardino and Riverside

San Bernardino County has almost enough people for three districts, and commissioners will almost certainly need to draw a Hispanic majority seat anchored by the cities of San Bernardino, Fontana, and Rialto. The question is whether commissioners will try to split Democratic Rep. Joe Baca’s current 43rd CD into two parts, paring his district down to his home base in those three cities, and putting Ontario in a separate Hispanic majority district. There will almost certainly need to be a Republican-leaning district anchored by the fast-growing Victor Valley area to the north, and the fate of Chino to the south is anyone’s guess.

Riverside County grew 42 percent in the last decade and surpassed San Bernardino, adding enough people for slightly over three whole districts. There is very big redistricting upside for Democrats here: Riverside gave President Obama a majority of its vote in 2008, yet all four of its districts are represented by Republicans. The most talked-about scenario calls for commissioners to create a new Hispanic majority district taking in Corona/Norco, Riverside and Moreno Valley. This seat would have a significant Democratic edge and could include the Corona home of GOP Rep. Ken Calvert, whose 44th CD is already 43 percent Hispanic.

In fact, surging Hispanic population and political participation in Riverside County explains why Calvert, who routinely had cruised to reelection since 1992, was nearly caught napping in 2008 when underfunded Democratic teachers’ union organizer Bill Hedrick took 49 percent of the vote. Calvert’s 44th CD needs to lose 141,851 residents, so it’s possible a new GOP-leaning district in southwestern Riverside County will complement a Hispanic majority district to the north. Calvert could run here, but he would almost certainly have to overcome primary competition in a vastly new district; Calvert took only 66 percent in his 2010 primary against a challenger who spent just $17,000.

The fastest growing district in the state was GOP Rep. Mary Bono Mack’s 45th CD based in explosive Palm Springs and Hemet in eastern Riverside County. The 45th needs to shed 211,304 residents. There are rumors Bono Mack may be considering an early exit from Congress to help her husband, Florida GOP Rep. Connie Mack IV, with his prospective Senate bid. If that happens, this district could be highly competitive. But Republicans would be somewhat relieved if the eastern reaches of the 45th CD, such as Moreno Valley, were lopped off into a new Hispanic majority seat, boosting the 45th CD’s GOP performance.

There’s virtually no way commissioners will draw new districts that endanger GOP Reps. Darrell Issa (CA-49) and Duncan Hunter (CA-52) in anything other than primaries, unless they draw much of the deeply conservative territory in northern San Diego County into districts with more urban areas, which would be a stretch. A continued 3-2 GOP edge in this southernmost region of the state still seems like the most likely outcome.

As if boundary fortune telling isn’t already hazardous enough, the state’s new “top two” ballot law has added a whole new layer of complication. In June 2010, voters passed Proposition 14, setting up jungle primaries for all federal and state elections in which the top two vote-getters, regardless of party, will advance to the November general election. Candidates aren’t even required to list their party on the ballot anymore. The first indication of the law’s impact could come in a July 12th special election to replace resigned Democrat Jane Harman in the Torrance-based 36th CD.

In the new “top two” era, two candidates from the same party can and will compete against each other on the general election ballot in some districts. This is highly unlikely to happen in swing seats, with the possible exception of unusual cases like open seat races where a plethora of candidates from each party would divide up the primary ballot. The more likely impact of this law will be to shut third party and independent candidates out of November elections.

Over the last few years, relatively unpopular incumbents have eked out November races with less than 50 percent of the vote thanks to minor candidates siphoning opposition votes. Unpopular incumbents won’t be able to depend on this crutch anymore.

California’s brave new world of districts and election laws could seriously endanger 15 or more incumbents. If the commission were to draw districts remotely resembling normal shapes, the incumbents at the most risk in primaries or generals would be those currently sitting in the most gerrymandered districts. Republicans with the most cause for concern are Reps. Dan Lungren (CA-03), Elton Gallegly (CA-24), David Dreier (CA-26), Gary Miller (CA-42), and Ken Calvert (CA-44). The Democrats: Reps. Jerry McNerney (CA-11), Sam Farr (CA-17), Dennis Cardoza (CA-18), Jim Costa (CA-20), Brad Sherman (CA-27), Howard Berman (CA-28), Laura Richardson (CA-37), Grace Napolitano (CA-38), Bob Filner (CA-51), and whoever wins the CA-36 special election in June.

Bottom line: Redistricting may endanger more Democrats in primaries and more Republicans in general elections. Overall, a true incumbent-blind redistricting plan may bequeath Democrats an additional seat or two, given that Republicans currently represent more marginal districts. Eight GOP members sit in districts that voted for President Obama in 2008, while no Democrats sit in districts that voted for GOP presidential nominee John McCain. And if commissioners or judges place an emphasis on maximizing Hispanic voting strength, Hispanic candidates could have new opportunities in as many as five additional districts.

rivco