From left, Mauricio Umansky and Jason Haber
When in February the American Real Estate Association (AREA, our acronym usage, not theirs) was created with hopes of becoming an alternative to the National Association of REALTORS® (NAR), it could not have come at a more logical time. For last fall NAR found itself on the losing end of what is now the legendary Burnett court case, with a jury ruling that it and several real estate power players conspired to inflate commissions in violation of federal law, awarding $1.78 billion to the plaintiffs. The association also found itself contending with leadership issues and odd occurrences.
NAR’s vulnerability as an organization was never more apparent, even if AREA founders Mauricio Umansky, a celebrity agent in Los Angeles, and Jason Haber, an agent with Compass in New York, had no intention of trying to supplant it. Existing alongside America’s largest trade association was a much more logical goal.
Since then, NAR has gotten off the canvas, so to speak, settling the lawsuit for $418 million and moving forward with its million-plus membership. Would AREA continue to move forward as well?
Yes indeed.
“Our intention was always to build for the long haul, and that takes time,” Haber told RISMedia. “We want to do it right and not do it rushed, and that means there are times when it will be more quiet than others. Right now we’re in a moment where the industry upheaval and angst is probably at a crescendo. It’s been high for the last year, but you’re seeing a lot of frustration out there in the agent community.
“And look, you can’t replace something with nothing. So we’ve tried to create something that can be an alternative voice. We will never expect to be the size of NAR. We want to have our lane, and we think we can do some good and help to elevate the industry. Maybe we make them better, too. For people looking for a different voice, I know that we offer something.”
Moving slowly but surely, AREA began by putting together membership and fundraising plans. Last week, the association announced two membership tiers, one for $20 that lasts through 2025 and includes 20% off online and in-person AREA events in 2024-25. The low price is to encourage people to engage with the association.
A second tier, labeled a founding membership, is $1,500, covering dues for 10 years, as well as invitations to exclusive events and recognition on the AREA website, among other things.
In an email announcement to those who had signed up on the AREA website to receive more information, there was this: ‘Thank you to the thousands of agents who have already signed up on our website, emailed us, called us, and private messaged us with words of encouragement and support. We look forward to welcoming you as a member and to working toward the change we all wish to see…together.’
Funding something like AREA takes a lot of effort, Haber explained, especially since it’s a nonprofit.
“What some people don’t consider is that you can’t really raise money the way you can with a traditional business venture,” he said. “I had all these venture capitalists calling us when we first announced, and of course we had to decline them all because we’re a nonprofit. We could have raised millions and millions of dollars very quickly. The problem is that then you exist for the benefit of the shareholders, and we want to exist only for the benefit of our members. We exist solely for the benefit of our future members, not for shareholders.
“So where you’d normally go for venture dollars, private equity money was closed to us. I’ve never raised money for a nonprofit before. It’s a much different process, and it’s been a great experience. We have grassroots support, and that’s most important. We have people very enthusiastic about what we’re doing, about what our plans are for the future.”
Haber noted that AREA has already been involved with lobbying for several public issues within the real estate industry.
“We were very involved in the VA Home Loan Guarantee program,” he said. “We met with three committees in Washington. We worked to help, as did NAR. You could argue they also created the problem with the settlement. But we were an active voice. We spoke to elected officials on both sides of the aisle, and we worked on that.
“We’re active in New York helping to defeat the FARE (Fairness in Apartment Rentals) Act, which would hurt rental agents in New York City by mandating how commissions are paid out. So we’re working at the federal level and at the local level already. As we go through 2024 into 2025, we’re going to look to amp up our political advocacy and our messaging to the public.”
Also part of the association’s aspirations is raising the value of agents in public opinion.
“This is something I want to stress,” said Haber. “The public holds us in lower regard than used car salesmen. But we’re responsible for most people’s most important investment in their life. I don’t think the public properly understands our value proposition or what it is that we actually do. And so I think we need to communicate with the public in a new way, in a way that elevates our industry. If you can do those things, that will actually help on the political advocacy side, too, because we become less of a target as we become more elevated in the eyes of the public.”
Haber said he and Umansky have put together a 25-person advisory board for AREA, only a few of which have stated that they are aligned with the new group.
“We haven’t put out a roster yet,” he stated. “There have been some changes to it. It’s still early. Some people on it have been vocal, like Stefani Berkin, the president of R New York, and Alyssa Brody in Miami, and we have a number of people who have been active. We’ll probably do something more public facing with our advisory board later this year.”
Now that AREA has established traction, Haber envisions 2025 as when things really blossom, including the hiring of an executive director, an operations director and other leadership positions.
“I think you have to lay a strong foundation,” he said. “Does that take all of 2024 and all of 2025? I mean, it might. Are we able to build up and do more public-facing activities in 2025? I think we can. It’s a process. I know that these days most everything is about immediate gratification. We’re trying to do the opposite and be really thoughtful about our approach, and mindful of where the industry is.”
