[Council Communication]  [Supporting Documents]

Council Communication

Title:	Request to Support Resolution for Real Estate Transfer Tax
Dept:	Department of Community Development Planning Division
Date:	April 1, 2003
Submitted By:	John McLaughlin, Director of Community Development
Approved By: ...........................	Gino Grimaldi, City Administrator

Synopsis:	This item is placed on the agenda at the request of Councilor Hartzell, and recommended by the Ashland Housing Commission. Currently, state statute prohibits local jurisdictions from adopting a local real estate transfer tax. HB2595 proposes to repeal this prohibition, giving communities the opportunity to consider if a real estate transfer tax is an appropriate revenue source.
Recommendation:	The Affordable Housing Action Plan identifies, as Strategy 1, the provision of funding for affordable housing. One of the options presented for funding is a real estate transfer tax. Unless the state changes the current statute, this option is not available for consideration by the Council. The Housing Commission has recommended that the City Council support the adoption of HB2595.
Fiscal Impact:	Supporting the house bill itself has no fiscal impact. However, should the City choose to enact a real estate transfer tax in the future, a tax of $1.00 per $1000 (0.1%) valuation would generate approximately $103,000 annually, as estimated in the Affordable Housing Action Plan. The Portland metro area has proposed a 0.75% tax rate, which would result in approximately $770,000 annually in Ashland. Again, these are estimates based on past real estate transactions and are subject to change based on different assumptions.
Background:	Background information provided by Oregon Action is included, as well as a proposed resolution.

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COMMUNITY SUPPORT RESOLUTION TO WIN FUNDING FOR STABLE, AFFORDABLE HOUSING

The housing crisis has grown unchecked in Ashland and southern Oregon for too long. 46% of households earning below the median income cannot afford to purchase a house in Ashland. We cannot tolerate communities that are increasingly divided into the haves and the have-nots.

Despite our difficult economic climate, we must secure significant, long term funding for affordable housing now. We believe that viable funding solutions have been implemented across the nation, and that the time has come for our city to take action.

Therefore, we commit ourselves to the following-

BECAUSE we support a child's right to a stable educational environment which begins with a stable home environment,

BECAUSE we believe that no family should ever have to choose between paying rent and buying food,

BECAUSE we care about revitalizing our region's struggling economy, and know funding affordable housing will create jobs,

BECAUSE we want socially and environmentally sustainable communities in which people can work, worship and go to school in the community in which they live,

BECAUSE we know that with stable housing comes stable communities that are better for everyone,

BECAUSE the Ashland Action Plan calls for the creation of an affordable housing trust fund, and includes a real estate transfer tax as a source of funds

We will join with other Oregon communities and organizations to support legislation to give local communities the option to use a real estate transfer tax to fund affordable housing !

We commit ourselves to this declaration.

_____________________________________________________________________
Name of Organization or Individual

_____________________________________________________________________
Signature of Organization Official or Individual and Date

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SUPPORT HOUSE BILL 2595
Local control makes sense

What does HB2595 do?
House Bill 2595 repeals a current prohibition in state law. Now, local governments are not allowed to collect a fee based on the transfer of real estate, a crucial tool to provide decent and stable housing for all. HB2595 would return local control to governments to help meet the housing needs of their communities.

Sustain Oregon's greatest resource - our communities
Housing in many cities around the state has become unaffordable to the very people who have built those communities. It's not right that people who have lived in and contributed to a neighborhood should be forced out by increasing housing costs. A Real Estate Transfer Fee is a valuable tool for counties and cities of all sizes to preserve housing for lower-income elderly and disabled residents. Don't deny local government that option.

Allow us to Build Compassionate, Caring Communities
Too many Oregon residents today have no hope for a safe, stable home. Housing is simply unaffordable for many senior citizens, as well as to persons suffering from long term illnesses and disabilities. HB2595 would give cities and counties an option for the creation of housing affordable to these citizens. This is a critical need in this time of growing uncertainty for our most vulnerable citizens.

What is a Real Estate Transfer Fee?
A real estate transfer fee is a commonly used method to raise funds for affordable housing. It is used in 38 states and more than one hundred cities and regions. A small fee of, for example, half of one percent could be charged when a property was sold. In this way, the housing market helps to support affordable housing for community residents.

Who supports HB2595?
HB 2595 is sponsored by Representative Deborah Kafoury at the request of Oregon Home, a regional alliance chaired by Beaverton Mayor Rob Drake and Gresham Mayor Charles Becker. It is supported by a wide range of organizations and individuals.

How can I get more information or get involved?
For more information, please contact Janet Byrd at janet_byrd@teleport.com

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Why Real Estate Professionals Support Real Estate Transfer Fees Dedicated to Housing

Real Estate Transfer Fees can enhance the real estate market

Revenue from a Real Estate Transfer Fee will stimulate housing development and stabilize communities. Fee revenue can be dedicated to assist first time homebuyers with soft second mortgages for downpayments. Fee revenue can support the development of affordable rental housing that is well designed, well maintained and professionally managed to enhance community livability.

Real estate transfer fees can be tailored to meet the needs of local markets and to protect vulnerable populations. Home sales under a certain amount (80% of the median home sales price, for example) can be exempted from the fee.

More first time homebuyers will fuel sales activity

The sale of 10,000 homes to first time homebuyers could produce $1.5 billion in sales revenue. Many potential first time homebuyers are being priced out of the market as housing prices rise. Modest low interest loans or grants from a Housing Trust Fund will make the purchase of a $150,000 home possible for more Oregonians. An additional 10,000 homebuyers will result in over $1.5 billion in new sales revenue, an additional $90 million in realtor commissions, and similar revenue increases in the construction and lending industries.

States with real estate transfer fees continue to experience growth in real estate transactions and strong housing markets

Florida has a modest real estate transfer fee (.07%) and dedicates most of the revenue generated back into the real estate market. Since 1998 real estate transactions in Florida have more than doubled.

37 states impose a real estate transfer fee

Oregon would not be disadvantaged in comparison to alternative real estate markets. Both California and Washington have real estate transfer fees.

New housing development creates local jobs, fuels the economy

The construction of 1,000 multifamily homes generates 1,030 jobs in construction and related industries, about $33.5 million in wages, and more than $17.8 million in federal, state, and local taxes. The construction of 1,000 single family homes generates 2,448 jobs in construction and related industries, approximately $79.4 million in wages, and more than $42.5 million in federal, state, and local tax revenues and fees.

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These organizations and individuals support a Real Estate Transfer Fee

We need a new revenue source to help us Build Complete Communities with adequate affordable housing

Organizations:

• 1000 Friends of Oregon

• Affordable Housing Now

• Ashland Congregational Church Mission Team

• Central City Concern

• City Club of Portland

• Coalition for a Livable Future

• Community Alliance of Tenants

• Community Development Network

• Community Partners for Affordable Housing

• League of Women Voters

• Neighborhood Partnership Fund

• Northwest Housing Alternatives

• Oregon Action

• Oregon Law Center

• Portland Community Reinvestment Inc. -PCRI

• Portland Grey Panthers

• Portland Housing Center

• REACH CDC

• ROSE CDC

Elected Officials and Local Governments

• Charles Becker, Mayor of Gresham

• Rob Drake, Mayor of Beaverton

• Multnomah County Commission

• City of Portland

• City of Ashland Housing Commission

• Jackson County Homeless Task Force

• Housing and Community Development Commission (Gresham, Portland, and Multnomah County)

Individuals and Businesspeople

• David Bell

• Jennifer Fay Henderson, Ashland Real Estate Broker

• Brian McCarl, Real Estate Developer

• Doug Obletz, Real Estate Developer

• Harold Schnitzer, Property owner

• Tom Walsh, Real Estate Developer

• Homer Williams, Real Estate Developer

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