Bryan Kohler:Leading With Ideas

Imagine a housing market like the one in Pottersville in Frank Capra‘s 1946 movie, “It‘s a Wonderful Life.” Pottersville represented everything opposite of Bedford Falls. In the world of Pottersville, most people were poor. In Bedford Falls, the middle class thrived. In Pottersville, people rented their homes and were subject to slumlords. In Bedford Falls, homeownership set the standard and people charted their own destinies.

Now imagine what America faces today.

“Never before has so much been at stake,” said Bryan Kohler, CEO of the Salt Lake Board of REALTORS®. “Never before has the housing market seen so many attacks.”

Kohler believes America has reached a tipping point.

“In the future, homeownership in America could be limited to only the elite,” Kohler said. “The American dream of owning a home is fast becoming harder to reach. REALTORS® stand as a last defense in championing private property rights and homeownership.”

For instance, federal regulators are now considering new rules under the Dodd-Frank Act that could be catastrophic to today‘s housing market. Under the proposed rules, a mortgage sold on the secondary market as a security would require the lending institution to hold 5 percent of the loan‘s value, unless the loan met the requirements of a “qualified residential mortgage.”

A qualified residential mortgage (QRM) would essentially require home buyers to come up with a 20 percent down payment. In his weekly podcast, Ron Phipps, president of the National Association of REALTORS®, said it would take the average family 14 years to generate a 20 percent down payment. “Obviously, that is a real problem,” Phipps said. “While people may be able to put slightly less down than 20 percent, they are going to pay a huge premium for that privilege.”

Kohler refers to a recent Wall Street Journal story that said mortgage rates could rise by as much as three percentage points for homeowners unable to come up with a 20 percent down payment. The new QRM rules would also limit the mortgage payment to 28 percent of a borrower‘s gross income and all debt to 36 percent.

The proposed QRM rules may sound good on paper. However, according to Kohler, the rules have unintended consequences, essentially shaping the types of mortgages generally available to borrowers for the foreseeable future.

According to research firm CoreLogic, if QRM rules had been in effect last year, nearly 40 percent of all mortgage originations in 2010 would have failed to meet the 20 percent down-payment requirement.

“Even if the down-payment constraint is moved down to 10 percent, the impact is large because nearly one-quarter of all 2010 originations had higher LTV ratios,” the CoreLogic report said.

Harder to obtain loans is one hurdle that could spell disaster for an already fragile housing market, especially with nearly one in four U.S. homes in a negative equity position.

“What federal regulators want to do is lop off almost a third of the home sales market to get up to 1.6 percent improved loan performance,” said Robert Freedman, senior editor of NAR‘s REALTOR® Magazine. “Requiring those higher down payments would drive huge numbers of households out of the market.”

A More Visible CEO

For Kohler, the fight for homeownership not only involves sweeping national laws from Congress, but oftentimes local campaigns originating at the Utah Legislature or a local city council.

One issue that simmers every year is transfer taxes. According to NAR, 39 states and the District of Columbia impose a tax on the transfer or sale of real property. Many of those states end up raising the tax after it is imposed. With more than one in five Utah homeowners in a negative equity position on their homes, Kohler believes such a tax would be devastating.

When Kohler was hired, very few local organizations looked to the Board for leadership on housing issues. That indifference was one area Kohler wanted to change.

“I could see right away that we needed to step up our relationships with legislators, mayors and city councils,” Kohler said. “We needed stronger relationships within the political ecosystem including other real estate groups, charities and the business community. We didn‘t have a consistent face. The Board commissioned me to go out and be the face that people would recognize.”

Kohler was well suited for his new role. He received a joint law degree and MBA from Willamette University in Salem, Oregon. He earned a bachelor‘s degree in political science from the University of Utah. His path to CEO started in 2002 when the association‘s board of directors began a search for a leader who could handle political lobbying, manage an organization and grasp legal issues.

Robert Farnsworth, who at the time was on the search committee for a new CEO, recalls being struck with Kohler‘s energetic approach and background in government affairs. “We definitely were intrigued with his legal background,” Farnsworth said. “We were all taken to him instantly. We knew he would be good for the association.”

Nearly 10 years later, Farnsworth praises Kohler‘s accomplishments and believes the board of directors couldn‘t have made a better decision. Prior to hiring Kohler, Farnsworth said association members felt somewhat disengaged from the Board. Kohler‘s charismatic approach helped bridge the gap.

“I really believe he loves the members,” Farnsworth said. “Bryan gives members a personal relationship with the Board. I think Bryan has brought the Board together. He adapts and learns from his experiences. He is not entrenched in a certain way of doing things.”

For Kohler, the job of CEO couldn‘t have come at a better time and represented the ultimate relational job.

“Prior to being hired by the Board I had been practicing law and I wasn‘t happy,” Kohler said. “I was suing people every day and I was kind of turning into a fighter. My job was to tear down the other guy instead of looking for solutions and building relationships.”

Since 2002, Kohler has concentrated his efforts at building a professional and service-oriented staff. The changes have been significant including increased advocacy at the local level, a proactive approach in dealing with the media, a new key system, a streamlined approach to continuing education (which included on-line classes), better organized events and enhanced efforts in communicating with members through social media and video messaging.

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Building Relationships

When he‘s not fielding questions from members, Kohler spends his time implementing whatever the 16-member Board of Directors wants him to do. The Board‘s mission is threefold: advocacy, communication and service. On a typical day Kohler can be found meeting with a state senator, presenting a check to a local charity, taking part in a fundraiser or tweeting on his iPhone. Kohler is also responsible for a budget of roughly $2 million and oversees a staff of 12 people.

Utah Sen. Steve Urquhart (R-St. George) said Kohler is pleasant to deal with, but also informed on the issues.

“The fun stuff is great, but I look at all the serious relationships I have and they all trace back to policy issues,” Urquhart said. “Everyone can see how fun Bryan is and how funny he is, but some people don‘t appreciate the fact that he is very substantive. He doesn‘t waste my time. He gets to the point. He doesn‘t sugar coat it.”

While they generally agree on most political issues, Urquhart is impressed by Kohler‘s interpersonal skills and Kohler‘s efficiency in presenting information. “An effective lobbyist is an expert at understanding an issue and putting it into concise talking points,” Urquhart said. “I don‘t want someone who is going to take 10 minutes to explain something that could take one minute.”

Justin Allen, government affairs director for the Board, said Kohler is a creative problem solver and incredibly “quick on his feet.”

“When he‘s put on the spot in an impromptu situation, he handles himself extremely well,” Allen said. “Bryan expects his employees to excel in their area of expertise. He hires the right people and sets high expectations. He has a vision of what he wants the association to be and hires the right talent to implement it.”

The staff once numbered 20 people, but the recent recession led Kohler to consolidate departments, cut positions and cross train staff to handle more responsibilities. “We currently offer more services, but with less staff,” Kohler said. “We have 12 full-time staff members working to serve more than 6,000 members. Present staffing levels are the same as when I was first hired in 2002 when there were about 4,000 members.”

Dave Fredrickson recalls this year‘s mid-year meetings in Washington, D.C. He paid special attention to Kohler and Chris Kyler, CEO of the Utah Association of REALTORS®. “They are extremely respected and known throughout the REALTOR® community,” Fredrickson said. “Bryan is always looking for ways to generate non-dues revenues to offset costs and relieve the pressure from potential dues increases. These guys are always thinking.”

A New Campus

Perhaps the biggest change Kohler has undertaken as CEO was helping to build a new Class A office building known as the REALTOR® Campus. The five-story structure located on Interstate 15 in Sandy is home to the Salt Lake Board of REALTORS®, UtahRealEstate.com and the Utah Association of REALTORS®.

The REALTOR® Campus consists of more than 105,000 square feet of office space and was built with the future in mind, according to George Richards, principal broker of Chapman Richards & Associates. Most of the vacant space in the building not being used by the Board, MLS or Utah Association of REALTORS® is currently being subleased. In fact, about 90 percent of the building is occupied. Several prospective tenants are touring what little remaining space is available, Richards said. There are five parking stalls per 1,000 square feet of office space, higher than other office buildings which average about three parking spaces per 1,000 square feet.

The REALTOR® Campus is unique from an investment standpoint, Richards added, because the property is zoned for a second 40,000 square-foot office building. “If the building was ever sold, it‘s easily worth more than we paid for it,” Richards said. Kohler estimates that the new building increased the Board‘s net worth by millions of dollars. The Board owns the first two floors of the building.

Debra Sjoblom was president of the Board in 2005 when the building was approved. She described the REALTOR® Campus as visionary. “In the old building there weren‘t enough classrooms or meeting spaces,” Sjoblom said. “If we were in the economy we are in now, we would be reluctant to put our toes in it.”

The building offered an expanded venue for the Board‘s CE courses and a central location to REALTORS® across the Salt Lake Valley. “We actually sold our old building and leased it back and then started construction,” Sjoblom said. “We were very careful with the cost. The REALTOR® Campus was on-time and on budget.”

Creative Changes

This month, the Board opened its Business Center/REALTOR® Knowledge Bar. The center replaced the REALTOR® Store and offers a location where experts can give advice and one-on-one training for members on mobile applications as well as tutoring for the iPad and smart phones. The idea sprang after years of sagging profits at the REALTOR® Store and was characteristic of Kohler‘s forward-looking approach.

“Change is my strength and my weakness,” Kohler said. “At the same time I‘m coming up with new ideas, I‘m trying to get rid of some old things we‘ve always done. Sometimes I‘m too quick to slay sacred cows and so the Board has to pull my reigns and say, ‘Wait, we‘re not ready to go where you want to go just yet.‘ Having the Board there to temper my zeal is a good thing.”

Farnsworth, who was the Board‘s president in 2003, recalls a proposal by Kohler to use photographs of REALTORS® in TV, print and other marketing pieces. The campaign was presented to the Board of Directors. “Nobody liked it because they had their broker hats on,” Farnsworth said. “The meeting came unglued. Our advertising agency couldn‘t believe it. We scrapped the ad and started over.”

For Kohler the experience was a reminder that sometimes change is difficult to implement. In a position like CEO, a person can literally surround him/herself in bureaucratic processes and people. “You can be tempted to insulate yourself and not make any changes,” Kohler said. “That‘s because the one thing that can get you fired is change.”

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Criticism and Praise

Yet for some, the changes aren‘t fast enough. Rob Aubrey, an associate broker with Equity Real Estate, thinks the Board has a long way to go in communicating with its members. Kohler has responded with a proposal to use a single sign-on at the MLS dashboard where all association services and information will be accessible from a single point. The new feature is expected to be functioning by the end of this year.

“The single sign-on initiative will go further in communicating with our members than anything else we have done to date,” Kohler said. “The one thing we all have in common is our use of the MLS on a daily basis.”

Aubrey is also critical of the association‘s bureaucratic levels. “Nobody is saying, ‘The buck stops here.‘ We get spun in circles to the point of nausea.”

Yet Aubrey is quick to praise Kohler for listening. Recently, Kohler invited several seasoned real estate veterans to air their concerns. The informal group consisted of critics as well as former presidents of the Board. The so-called “kitchen cabinet” has met three times and has tackled a variety of issues. “For me, bringing critics into my office is easy,” Kohler said. “I‘m not opposed to their feedback. I‘m actually starving for it. I want it. It‘s the best two hours of my month.”

Aubrey, who is a member of the group, said Kohler is tearing down the bureaucracy by taking the time to listen to REALTORS®.

“He‘s cutting costs and insisting on more efficiency,” Aubrey said. “He is working to change the perception of the Board, but he has a long ways to go. ”

Part of that frustration has to do with a prolonged housing slump that began in the summer of 2007. For many agents, the tipping point comes at dues season, when agents are required to pay nearly $800 to keep their membership active at the local, state and national levels.

“From an agent‘s point of view, we don‘t differentiate between the Salt Lake Board, the MLS or the Utah Association of REALTORS®,” Aubrey said. “That‘s just one big good-old-boy network.”

However, Aubrey believes the dues REALTORS® pay are not high enough. In fact, while more than 8 out of 10 REALTORS® this year opposed a $40 increase by NAR to boost political advocacy, Aubrey was a staunch supporter of the hike, arguing that more political advocacy is essential to protect the real estate profession.

Farnsworth agrees with Aubrey that more should be done in the way of advocacy. “We were founded on principles of government advocacy and to clean up an industry that was getting beat up by all sorts of scams,” Farnsworth said. “That‘s why NAR was formed in 1908. Advocacy is our foundation. It is why we came together 100 years ago and it is why we are together now.”

As far as critics, Farnsworth said it is part of being CEO. “I don‘t believe you can be in any high level position and not have critics,” Farnsworth said. “If you don‘t have critics, you probably aren‘t doing your job. Bryan is not afraid of critics and not afraid to try new things. And he‘s not afraid to say he‘s wrong when he tries something and fails.”

Making Connections

Whatever the issue, Kohler said being approachable makes a difference. “I think most people know that if they really want to suggest something to the Board or make a change they can come in and talk to me,” Kohler said. “There was kind of a feeling before, I think, that the Board was here to police you and ‘Don‘t bother the Board.‘”

Brandy Salazar, former event director for the Salt Lake Home Builders Association, said Kohler reached out to home builders to find a unified voice in confronting issues facing both organizations.

“This was a new strategy than what had happened in past years,” said Salazar, event director for the Board. “He wanted to form an alliance to confront several issues which included impact fees, transfer taxes and other fees that the consumer would ultimately have to absorb. He started the conversation several years ago. Prior to that, everyone operated on their own.”

Since his first year as CEO, Kohler has tried to engage the Board‘s members. Humor is one of those rare qualities that Kohler uses well. Last year he starred as stunt double “Bryanna Dipo” in an inauguration video at the Board‘s annual December social. The 600 people in attendance erupted in laughter, some falling off their chairs.

DeAnna Dipo, president of the Board, said Kohler is extremely talented and forward thinking. “That‘s the one comment that I have gotten the most about Bryan,” Dipo said. “Members appreciate the fact that he has brought his sense of humor and added an element of fun in a tough economic time.”

Kohler values his relationships with members, but is quick to reach out to those around him, including local charities and government officials.

“I can move things for people when maybe they can‘t get it done on their own,” Kohler said. “A while back the Utah Division of Real Estate‘s investigators were going a little far in pursuing our members over what were basically clerical mistakes. It was just an overreach by government. The association was able to go in there and argue on behalf of our membership. If the association doesn‘t have strong relationships, what good are we for our members?”

After nearly a decade of serving REALTORS®, Kohler‘s greatest accomplishments are valued in the relationships he has forged.

“I‘m never satisfied,” Kohler said. “The only thing that truly scares me is boredom. So far this job has never failed to keep my heart racing.“

Dave Anderton is the communications director for the Salt Lake Board of REALTORS®.