Every day more teachers jobs are lost. State workers are on mandatory furloughs and our state is in a financial crisis. Creative ideas are debated on how to balance the budget. What is not typically heard is the estimated economic impact of the HVCC (Home Valuation Code of Conduct) on our state as a whole.
A recent article on the HVCC in the Appraisal Press by Dave Biggers, the founder and Chairman of a la mode (an appraisal software manufacturer and real estate services company) states "In some large states, the economic impact and the job loss figures are equivalent to losing a military base or a major manufacturing plant. (Look at California, where it's equivalent to losing over 9,800 jobs and over $700 million in economic impact.)"
"How can this be?" You ask! The income independent appraisers have lost due to the HVCC is compounded when you take into account the ripple effect it has through the rest of our economy. Out of state AMC's (appraisal management companies) take a large portion of the appraisal fee previously paid to local appraisers. These dollars are no longer available to buy goods and services here locally. We not only lose the local commerce, we lose the tax dollars on the goods no longer purchased. Ultimately the lost revenue to our state compounds to a staggering figure that makes even the $24 million dollar "missing watch dog" mandated to oversee the HVCC pale in comparison.
How many teachers could we pay with $700 million?
When looking at the overall estimated loss to California, it becomes clear this is not simply an issue for appraisers, brokers and real estate agents. It affects everyone, from our school children and teachers to state workers and the unemployed.
The real mystery appears to be why this is allowed to continue. Now that the "unintended consequences" have become quite clear, why is there not outrage?
The HVCC is set to expire in July 2010, however the changes it has created in the way appraisals are ordered has long reaching adverse effects to the consumer and our economy.
Representatives Childers (D-MS) and Miller (R-CA) introduced legislation in June requesting an 18 month moratorium on the Home Valuation Code of Conduct (HVCC). While this is applauded, in the face of the cost of the HVCC to our state which is in dire need of a balanced budget, it seems woefully inadequate.
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