Dear neighbors,
Thanks to all of you who emailed and spoke in support of the Real Estate Transfer Fee home rule petition to fund affordable housing.
Here are updates from the 3/10/21 Ordinance Committee hearing on a Real Estate Transfer Fee:
- The Ordinance Committee forwarded the Real Estate Transfer Fee to the Council with a favorable recommendation from the 7 councilors present, and it will be discussed in a future Council meeting after the notes from the Ordinance hearing are sent to the Council. It will be based on the version from the city solicitor.
- The threshold of no less than $1M was passed by all Councillors present. (What that means is that the transfer fee tax would be 2% on any amount over $1M, so if your house was sold for $1.3M, you would pay a real estate transfer fee of $6,000.)
- The language would be written so that City Councillors would still have the option to include exemptions and changes in the future.
- There was support for funds to be spent partly on homeownership and having language to include this.
- No changes on the management of the funds with the Affordable Housing Trust.
- There were no examples of fees shared with the public beforehand, so that people could easily understand what councilors were talking about.
- The assessor’s chart (attached) was not shared with all councilors and with the public beforehand.
- The assessor's chart showed that a 2% fee on properties over $1 million would yield $35 million per year, and a graduated fee going up to 5% on properties over $5 million would yield $80 million/year, if the fee did not cause in changes in market behavior*. Some councilors are interested in a graduated fee.
- The assessor's chart showed that 40% of transactions over $1 million have had either the buyer or seller as an
LLC. (A Limited Liability Corporation limits the legal liability for a property, so that damages can not be more than the value of one property, and can not cause a loss from other assets. An LLC can not claim a homeowners exemption that reduces property tax; but it might be used by some well-off people who actually do live in the property.)
- After the Council passes the home rule petition, they would send it to the state legislature where it is not likely to be voted on. However, the reason to pass a home rule petition despite this is to get the legislature to pass enabling legislation (more info here), which if they do, would come back to the Council with some variables the Council could adjust through a local bylaw.
* Possible changes in market behavior: the corporation could lower the list price in a large commercial transactions by giving an ownership stake, taking a tax write off, or even agreeing to a separate deal on the side that is legal but doesn’t show up as a real estate transaction. That’s why it’s not straightforward to tax properties over $5 million at a higher rate.
Thanks to Nicola Williams and Councilors Nolan and Zondervan for the information in this update, and to Councilor Carlone for pushing for the transfer fee.
Thanks,
Lee
--
You received this message because you are subscribed to the Google Groups "Association of Cambridge Neighborhoods" group.
To unsubscribe from this group and stop receiving emails from it, send an email to
association-of-cambridge-neighborhoods+unsubscribe@googlegroups.com.
To view this discussion on the web visit
https://groups.google.com/d/msgid/association-of-cambridge-neighborhoods/BD812442-09B8-480D-BE94-1D13175D081F%40LeeFarris.net.
--
You received this message because you are subscribed to the Google Groups "Association of Cambridge Neighborhoods" group.
To unsubscribe from this group and stop receiving emails from it, send an email to
association-of-cambridge-neighborhoods+unsubscribe@googlegroups.com.
To view this discussion on the web visit
https://groups.google.com/d/msgid/association-of-cambridge-neighborhoods/BD812442-09B8-480D-BE94-1D13175D081F%40LeeFarris.net.