Loading...
2021 TransferFeeSubcommitteeMinutes Housing Partnership Transfer Fee Subcommittee 5:30 PM, Monday Aug 16, 2021 Due to the Covid-19 emergency, this will be a Zoom virtual meeting: https://mtholyoke.zoom.us/j/97814159286 One tap mobile +13017158592,,97814159286# US MEMBERS Ace Tayloe, Jim Reis, Sara Howard, Richard Abuza (Carmen Juno absent) 1. Public Comments - None 2. Discuss the Real Estate Transaction Fee A. Should we recommend the Real Estate Transaction Fee? • Yes (unanimous) • Richard: We should focus on what we want to see implemented, we shouldn’t discuss based on what is easy to implement. • Jim: We should do this now, independent of what the state is trying to do B. What should be taxed? • Everything, residential only, commercial only • Richard: We should tax residential, exclude commercial, if legally permissible; things like the recent Coca Cola sale • Jim: Agreed • Sara: We should talk about taxing commercial as well, do more research • Ace: We probably won’t be able to meet before the next full meeting, so any research would have to happen outside of this decision • Jim: We could just come back to the partnership with a broad recommendation and some specifics, and not a fleshed-out plan, and ask to meet with the counselors in another subcommittee meeting (after next meeting) • Residential only – Jim, Richard • More discussion – Sara, Ace C. Where should it go? • Jim: We should fund the Housing Trust fund with this money, historically it has been useful, it can be used to pay staff to administer it. • Richard: It will be easier to get political support if we have a specific text with a rate or range to bring back to the city council. We shouldn’t advertise the fund paying for the people to administer it, that’s not politically popular. • Sara: If it went to the CPA, it would help fund it (since we want to increase what is used for housing there); funding the old trust fund would be complicated. • Richard: We need to put this in the preamble, where it’s going and how it’s going to be used. • Jim: CPA money has a lot of restrictions. We would have to do work to revive housing trust. Can find out more for next meeting • Richard: Not happy with how much/little CPA incentivizes housing, worried money will go to non-housing purposes. • Richard – Housing Trust or other • Sara – Housing Trust • Ace – Housing Trust • Jim – Housing Trust D. Who pays the fee? • Richard: Politically, the seller makes the profit, they should pay • Sara – Needs more discussion • Ace – Needs more Discussion • Jim – Split • Richard - Seller E. What is the price limit? • Jim: Should be above median price of the city • Richard: That would cover a lot of folks who should be exempt • Jim: 130% above median would be a good limit. This works out to houses that are >$596,000. • Richard: We should have a better median number next year. I think the range is a good one, maybe 120%, in order to raise more money. Might also incentivize lowering housing costs. • Sara: We shouldn’t de-incentivize buying duplexes and multi-family homes, those cost more • Ace: Many are below the listed threshold • Richard: Could exclude multi-family houses, but multi-family tends to be investments, and investors are the ones with money that could be used for the tax. Could place the price by unit, but that would disadvantage duplexes. • Ace: 120% • Jim: 120% • Richard: 120% • Sara: 120% F. Who is exempt? • Sara: Affordable housing should be exempt • Ace: If affordable units are bought, do they have to stay affordable? • Richard: Some should, but it isn’t enforced • Jim: Yes • Richard: Yes • Sara: Yes • Ace: Yes • Ace: We should exempt people who would be living in the house • Sara: I don’t think that’s necessary if we’re already limiting it to things above the median. This could incentivize smaller houses. • Richard: No • Sara: No • Ace: Abstain • Jim: No • Ace: Does this tax apply to buildings, or lots? • Sara: Any transfer • Richard: An empty lot that was worth more than the limit would be subject to the tax. Unlikely but possible. • No vote needed 3. Other business not anticipated A. Set up another subcommittee meeting after next full meeting • Invite city council members B. Richard: Ask for resources or clearer statement for targets who benefit from tax 4. Adjourn 5. Summary of recommendations: The subcommittee recommends a Real Estate Transaction Fee for Northampton. This fee should go towards replenishing the Housing Trust. This fee should be on transactions that are 120% or more of the median price of housing in the city; affordable housing should be exempt. The subcommittee recommends more discussion on if this should be only on residential sales or include commercial, as well as who is paying the fee (buyer, seller, or split).