When a large organization announces a budgeting change, it usually signals incremental improvement.
When NAR announced zero-based budgeting, it signaled something else entirely. A reset.
In a wide-ranging conversation on the Playmakers Podcast with RealScout CEO Andrew Flachner, NAR CEO Nykia Wright explained why she chose one of the most difficult financial disciplines available, and why sticking with the old model would have undermined everything else she’s trying to fix.
Understanding that decision starts with Wright’s blunt assessment of the budgeting system she inherited, and why she believes it worked against the kind of reset NAR needs.
It begins, too, with understanding how NAR got here, drawing just enough backstory to put the pieces together. Just as Wright pointed out, many of NAR’s issues are decades in the making. There are no quick fixes that don’t risk “throwing the baby out with the bathwater.”
So, why zero-based budgeting? And what specific problems does Wright intend to solve with this strategy?
Why the Old Budgeting Model Became a Liability
Nykia Wright stepped into the CEO role after former CEO Bob Goldberg announced an early retirement, following months of scrutiny and criticism about the culture of the organization. At that time, NAR’s challenges weren’t confined to one department or one decision (that would have been easier to fix). They were shaped by years of layered systems and legacy assumptions that no longer matched the organization’s size or the level of scrutiny it faced.
Budgeting sat right in the middle of that problem.
What Wright found, when she dived into the thick of it, was something harder to see than textbook reckless spending (though an investigation by the New York Times suggests that may have been happening, too.) The problem was NAR was still operating on a budgeting model built to preserve continuity rather than force accountability.
Over time, that approach allowed outdated priorities and hidden inefficiencies to survive simply because no one was required to examine and re-justify them. It’s why many have been so critical of NAR’s spending, which, in 2024, included multi-million dollar salaries for executives and over $42 million budgeted for Havas Media Group.
On the Playmakers Podcast, Wright described walking through how most large organizations default to incremental budgeting because it feels safer and easier.
That mindset, she explained, anchors decisions to the past instead of present realities.
“You anchor yourself in what you did this year, what you thought you were going to do, and then you move from there. Zero-based budgeting says, ‘Okay, I have this initiative and I’m going to go through the discipline process of saying, what do I really need?’”
Over time, NAR’s incremental budgeting allowed spending to drift out of alignment with actual value, especially in an organization with as many programs, vendors, and committees as NAR.
“If last year you were paying for a vendor or you were paying for a vendor three years ago that is on this auto payment that you haven’t really found, you can find that’s in there and you can pull that fat out of the system.”
In an environment where trust had already eroded, those blind spots became liabilities. A new system was needed. And zero-based budgeting stood out as the only viable solution.
Why Wright Pushed an Owner Mindset
Wright framed the shift as a deliberate move away from inherited decision-making and toward ownership. Leaders could no longer just manage what they’d been given. They had to justify what they kept.
That shift forces tradeoffs into the open. Programs don’t survive because they’ve always existed. They survive because someone can clearly explain why they still deserve resources.
Again, that brings to mind certain expenses that keep showing up in NAR’s annual 990 (the eight-figure contract deal with Havas Media Group stands out as a potential casualty).
Wright acknowledged that many organizations avoid this kind of discipline precisely because it’s uncomfortable. It requires a significant investment of time as well as the willingness to cut dead weight, wherever it’s found, to make room for investments that make sense in 2026.
“A lot of companies don’t do that because you can imagine how difficult that is. But we are committing to do that because not only are we trying to help realtors get to their next transaction, but we have to continue to build for the future.”
That commitment reshapes how decisions get made. It requires leaders to separate what’s essential from what’s merely familiar, the nice-to-haves from the need-to-haves. As Wright pointed out, it requires operational discipline, “which is what our market is asking us to do.”
In Wright’s view, restoring discipline (and rebuilding trust) is about making sure every dollar spent could be defended in an environment where credibility had already been questioned.
Why Time & Risk Left Little Room for Delay
That discipline became urgent because Wright knew she wasn’t inheriting a slow-burn situation. She was stepping into a compressed timeline shaped by public scrutiny and accumulated risk.
She knew she had a limited amount of time to solve a very big problem. As she put it:
“By the time you make the cover of the New York Times, that was 10, 15, 20, 30 years in the making.”
As those long-standing issues surfaced, the financial implications followed quickly. What began as cultural and governance failures became legal and financial exposure tied to the antitrust lawsuits working their way through the courts.
“When we looked at the potential $5.3 or $5.4 billion judgment, it was quickly turning into a financial challenge as well. So those were two very, very big things that we had to solve very, very quickly.”
In that context, incremental budgeting was worse than insufficient. It increased risk by delaying clarity. It also de-incentivized transparency, which is something members, as well as the Justice Department, were demanding.
Zero-based budgeting forced the organization to confront reality all at once:
- What it could afford
- What it could defend
- What it could no longer justify carrying forward
That pressure set the stage for everything that followed.
Unlocking Capital Without Raising Dues
One of the clearest constraints shaping Wright’s thinking had nothing to do with spreadsheets and everything to do with credibility.
By the time she arrived, NAR was operating in a tighter environment on multiple fronts. Membership growth was no longer a given. Market conditions were uneven. And patience for passing additional costs back to members was thin.
In that context, any strategy that relied on simply raising dues would have undercut the trust Wright was trying to rebuild. She framed that tension plainly during the conversation:
“If you are an industry where you have fewer members, if you are an industry where members are not making as much money, you’re trying not to tax them. But you are also trying to figure out how you can help them get to their next transaction.”
That combination of constraints left NAR with limited options. Support still had to be funded. Programs still had to deliver value. But the margin for error was gone.
Rather than looking outward for new revenue or short-term fixes, Wright focused inward. The question, in her view, wasn’t how to do more with less. It was whether the organization truly understood where its existing resources were tied up.
That line of thinking connects directly back to the earlier critique of incremental budgeting.
When spending is anchored to the past, capital gets trapped in programs and contracts that no longer justify their cost. Zero-based budgeting forces those assumptions into the open and creates flexibility without asking members to carry the burden.
Wright also tied this discipline to avoiding the kind of reactive decisions that have become common across many industries.
“You see it now every day. Such and such company is laying off thousands of employees. How did you get to that point where you didn’t see this coming?
“Zero-based budgeting, you wouldn’t be in that position.”
In other words, the goal was foresight, not austerity. By rebuilding the budget from the ground up, Wright aimed to give the organization earlier visibility into risk, more room to maneuver, and fewer moments where drastic moves became the only option left.
Seen through that lens, zero-based budgeting was a way to stabilize the organization without asking members to absorb the cost of decisions made years earlier.
Why This Budget Reset Signals a Bigger Shift
By the time Wright landed on zero-based budgeting, the decision was more about whether the organization could regain control of its own trajectory.
Not surprisingly, a good part of that had to do with how it managed its resources, including member dues. As easy as it is for the public to access NAR’s tax records to see what their member dues are actually paying for, transparency on spending priorities is not optional.
When scrutiny intensified and risk became impossible to ignore, NAR’s deeply-embedded weaknesses surfaced all at once. And zero-based budgeting became the response because it addressed all of those failures at the same time:
- It forced clarity where assumptions had lingered.
- It replaced inherited spending with ownership and accountability.
- It created flexibility without shifting the burden back onto members.
NAR’s budgeting reset functions as a clear signal about how leadership intends to govern from here on out. It reflects a belief that credibility is rebuilt through decisions that feel restrictive in the short term to provide more flexibility in the future.
That logic is what makes zero-based budgeting feel inevitable in hindsight. In an environment defined by scrutiny and constrained resources, the harder path was also the only defensible one, and the only aligned with NAR leadership’s goals for the organization.
Watch the full replay of their conversation to get the full picture of NAR’s strategy for 2026, and why Wright described her role as “the hardest turnaround I’ve ever faced.”
