TREC FAILS Sunset Commission review?

(John Cahill, TREC 855) #1

You need to read the short summary. This is taken from the Sunset Summary report.

As anyone who lives in Texas knows, the real estate market has been hot for almost a decade. With Texas’ strong economy and low unemployment rate, the state’s housing sector has grown faster than in other parts of the country, and a similar trend can be seen in the commercial real estate market.

According to experts, Texas has been experiencing a fundamental shift toward becoming a center for growth for years to come. This boom has contributed to a steady increase in applications to work in the real estate industry in Texas. From fiscal year 2013 to 2017, the number of Texas Real Estate Commission licensees increased from approximately 147,000 to 183,000. However, despite clear industry trends, the Sunset review found the Real Estate Commission failed to adjust quickly and decisively to the growth in the industry and the demands on the agency, ultimately to the detriment of license holders. The Real Estate Commission and Texas Appraiser Licensing and Certification Board had the ability to respond successfully to the economy’s significant impact on the real estate and appraisal industries. In 2011, to enable the agency to meet growing industry demands, the Legislature granted the agency self-directed semi-independent (SDSI) status, one of the most significant and somewhat rare tools available to state agencies. However, with this tool came great responsibility. Obtaining SDSI status effectively removed the agency from the appropriations process, giving the agency full authority and flexibility to manage its own budget and operations. This change in status also largely removed legislative oversight of the agency, placing it instead primarily in the hands of the agency’s governing bodies — in this case, the commission and the board.

Beginning in 2014, rather than using its budget flexibility to improve operations to meet increasing license holder demands, the Real Estate Commission and Appraiser Board took advantage of SDSI provisions that allowed the agency to set aside funds for a building. The commission and board began putting significant amounts of excess revenue into their respective building reserve funds instead of using it for agency operations. By 2017, customer service problems had inundated and overwhelmed the agency while $12.5 million sat in its building reserves.

At the beginning of the Sunset review in 2018, customer service problems had reached crisis proportions. Average call wait times exceeded 18 minutes, and at one point, 68 percent of callers were giving up and
abandoning their calls. During the review, Sunset received numerous complaints regarding agency hold times ranging from 45 minutes to an hour, unanswered emails, a difficult-to-navigate website, and a slow
licensing process. Ultimately, the review concluded the Real Estate Commission and Appraiser Board had failed to adequately assume and fulfill the critical oversight role the Legislature delegated to them under SDSI, continuing to allocate funds to the building reserves instead of addressing the agency’s snowballing customer service problems. Meanwhile, license holders struggled to get the services from the agency that they had paid for with their licensing fees.

In light of these findings, Sunset staff recommends continuing the agency for only six years instead of the standard 12 years. Though the agency has recently taken steps to address some of its problems, the commission and board need increased oversight to ensure these efforts are long-lasting and effective. A six-year Sunset date would allow the Legislature to more quickly assess whether the Real Estate Commission, Appraiser Board, and agency staff have made necessary changes to get their house in order, restoring the trust of legislators, license holders, and the public. The report’s recommendations would also increase oversight of the agency to better monitor its flexibility as an SDSI agency. Finally, these recommendations would require the commission and board to establish a more responsible budget and adopt licensing and enforcement best practices to reduce burdens on licensees and staff.

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(William B. Ogletree, TREC License #22530) #2

Bureaucrats + No Oversight = One Big Fat Mess

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