Proposed AB 885 Septic and Well Testing Requirements Burdensome and Costly

The California Association of REALTORS® (C.A.R.) released a Red Alert January 7, 2009, regarding regulations for Onsite Wastewater Treatment Systems (OWTS) being proposed in AB 885. CA.R. is concerned that, if enacted, these regulations will make it too costly and burdensome to own a property with a septic system. In Madera County, we have almost 20,000 housing units on septic.

The state is in the process of holding several workshops and hearings where members of the public may give written and/or oral input regarding the State Water Board’s proposed regulatory actions and content of the Draft Environmental Impact Report (DEIR). This is your chance to let the State Water Resources Control Board (SWRCB) know that the proposed regulations are too costly and burdensome and that the DEIR falls short of adequately evaluating the true financial impact of the proposed regulations on California homeowners.

District 5 Supervisor Tom Wheeler shared with the Yosemite Gateway Association of REALTORS® on January 8 that he has requested an additional workshop to be held in our area prior to February 9; the deadline set for comments to be provided to the SWRCB regarding the proposed regulations. However, at the time this article was written, there has been no confirmation of an additional hearing to be held in Eastern Madera County.

The Fresno workshop is January 22 at the Fresno Unified School District Board Chamber on 2309 Tulare Street. I’ll be at our C.A.R. meeting in Monterey and will be unable to attend. I would encourage all those that can attend to be there. The remaining workshops are January 27 at 7 p.m. in Santa Rosa, January 28 at 7 p.m. in Eureka, and February 9 at 1:30 p.m. in Sacramento at the Byron Sher Auditorium, Cal EPA Building, on 1001 I Street.

If you plan to attend one of these meetings and provide testimony, be prepared to follow through with providing your written comments and concerns to the SWRCB. Written comments can also be emailed to the SWRCB at AB885@waterboards.ca.gov or mailed to State Water Resources Control Board Division of Water Quality, ATTN: Todd Thompson, P.E., 1001 I Street, 15th Floor, P.O. Box 2231, Sacramento, CA 95812.

The most useful site I’ve found for information on AB 885 is: http://www.swrcb.ca.gov/water_issues/programs/septic_tanks/.

C.A.R. is opposing the current draft of the proposed regulations for many reasons.

• The cost of achieving compliance is too burdensome and costly and hurts housing affordability.

• Groundwater testing and routine inspections will be required whether there is evidence of septic-related problems or not, adding an unnecessary cost burden to property owners—many of whom are low income.

• The separation to groundwater standard and loss of sidewall infiltration will require new and existing homebuyers to install tremendously expensive “alternative systems” if they are even locally allowed.

• The regulations need to allow for an effective, pragmatic variance process, where local government regulators can make site-specific exceptions to the regulations and determinations of “functional equivalency” for local conditions.

• The owners of existing septic systems with supplemental treatment systems will now be required to maintain and transfer technical documents at point of sale. This is a problem because thousands of systems would already be out of compliance due to lost or misplaced documents and real estate professionals will be required to purchase additional lost instrument bonds and will be exposed to increased liability.

• The requirement to install groundwater-monitoring wells for new systems is too costly and will prevent building on otherwise usable lots.

• The groundwater testing requirements are overkill. Testing should be changed to fecal and bacteria sampling, which shows a direct nexus to a failing system.

C.A.R. has the following concerns about the DEIR.

• The DEIR does not give adequate proof that all septic systems are causing water quality problems.

• The DEIR does not adequately consider the true financial impact of these regulations on property owners, especially those who are low income.

• The DEIR does not adequately address the impact of the new disclosure responsibility, increased liability exposure, and added uncertainty on real estate transactions created by the proposed regulations.

• The DEIR failed to adequately address funding options available for low-income property owners to allow them to comply with the proposed regulations. Instead, it asks this population to rely on a fund which may not have enough money available to help all those who will need it.

• The DEIR failed to recognize that the proposed regulations will, in fact, curtail the ability for property owners to develop their lots and therefore will slow or stop growth in some areas. The report also failed to evaluate the impact of the proposed regulations on the ability for local governments to achieve the Regional Housing Needs Allocation (RHNA) goals.

• The DEIR failed to quantify and analyze the increased green house gas (GHG) emissions that will be generated from all the well testing, tank inspections, and septic waste hauling, contrary to AB 32.

Local MLS Provides Many Benefits to Sellers

I am amazed when sellers, including traditional sellers and REO (Real Estate Owned) lenders, list their property with someone who is not a member of the local Multiple Listing Service (MLS) where the property is located. Why am I amazed?

First, let me explain the term MLS. Essentially, an MLS is a database of properties for sale. This database is powerful; it is the most frequently used tool by REALTORS® to screen and select the properties for their clients to view; hopefully, leading to a purchase. Locally, our MLS is provided through the Yosemite Gateway Association of REALTORS®. Not only does our MLS database show current inventory (properties for sale) and listings in escrow, it also has information from the last three years on properties that have sold or have been cancelled, withdrawn, or expired.

By a wide margin, the best advertising method that leads to the sale of a property is exposure in the local MLS. In fact, a study by the National Association of REALTORS® found that MLS exposure is three times more effective than the next closest advertising method (which happens to be Internet advertising) and that homes listed in an MLS sell for significantly higher prices than those not listed in an MLS. Thus, sellers who have listed their property with a broker or agent who is not a member of the local MLS are missing this local exposure.

Consider this, if property is for sale and not in the local MLS database, then when a REALTOR® searches for property for his or her buyer, that property will most likely not be viewed by that buyer. For example, a listing REALTOR® that is a member of the Yosemite Gateway Association of REALTORS® will place his or her listings in our MLS and may also put them in other MLS systems as part of a marketing plan (provided the other MLS does not make it too onerous to do so). However, if a broker or agent from out of our area takes a listing here and only puts that listing in his or her out-of-area MLS and not the local MLS, it makes it extremely difficult for local REALTORS® or buyers to find that property for sale and get the necessary information to view the property.

In addition, if a buyer comes across information online on a non-local website, tracking it down by a REALTOR® can prove to be very difficult. I have a client that provided me a list of MLS numbers this weekend for homes in our area from three different MLS locations! I’m still trying to get information on one of the properties. In all likelihood, this one property will get few (if any) showings because it is too difficult to obtain information on the property.

Following the MLS as the top advertising method, is the Internet, as noted above. Therefore, out-of-area brokers or agents who do not enter their listings in our local MLS will also not have the property they have listed showing up on our many local agent websites via a system known as IDX (Internet Data Exchange). IDX allows the public to view local MLS listings. Many of the agents that are members of the Yosemite Gateways Association of REALTORS® utilize IDX on their own websites. The out-of-area brokers or agents that have not joined our local MLS are therefore missing this marketing opportunity.

A 2008 California Association or REALTORS® (CAR) survey supports the use of the Internet, particularly local real estate websites, when marketing a property. The survey found that home buyers began their search process by using search engines on the Web to identify real estate sites where they found housing-related information on a wide rage of geographic areas and accessed comprehensive information on homes for sale. As they refined their process and narrowed down the properties they wanted to view, they found their local agent's site to be the most useful.

Many REALTORS® know—but I believe most sellers are not aware—that the typical buyer is now an Internet buyer, according to CAR. Approximately 80% of home buyers use the Internet as an integral part of the home-buying process. This has increased 50% from 8 years ago. According to a 2007 CAR survey, only 12 percent of all home buyers looked at newspaper/magazine ads to search for a home. This makes the local MLS posting and use of local Internet websites where the listing can be found an important part of marketing a property.

Property not posted in the local MLS will have less chance of selling, will have fewer showings, will be on the market longer, and if it does sell, will probably be for less than what it would have sold for had it been posted in the local MLS. On the other hand, sellers who have their property posted in their local MLS will benefit by having an expanded sales force. In addition, there will be more demand for their property because it will be exposed to a larger pool of prospective buyers.