Comments on:Somerville’s Transfer Tax Fee
John L Sullivan says:
While watching the good Alderman from Ward 5 speak this evening on T.V. the BOA meeting. He discussed both issues mentioned he failed to state a fact that the first right of refusal was shot down in Cambridge.
Either he is being deceptive or maybe he has not read this news paper since the last time he did when he questioned WHY I did not use his name when speaking about him.
The City Cambridge Councilors shot the first right down on Tuesday night. There was great opposition that protested at the meeting.
I think honesty is the best policy. We do not need to be vague about the language on any issue be specific and ensure those affected are aware of what your intent is! I will try quoting my Alderman at the first meeting of this year, the least specificity when approving the language will make it easier going forward.
I reiterate my stand on both issues that will have consequences to everyone that resides in our great City. Just the facts! Reach out to those that will be impacted and ensure they understand what the costs are.
Transparency that’s how other elected officials were motivated to change their train of thought and realized you just pick the brains of everyone to make it a feel good community.
Upon defeating both of these measures whether it affects me or not. I will continue to fight to prevent passing the buck onto one certain group to pay for the mistakes that have negatively impacted residents of our City and forced them out.
We will discuss more important issues that really need to be addressed that will have a more favorable impact to us the homeowners, bike riders, pedestrians, children, seniors, and veterans.
Fiscal responsibility along with getting back to real City business not politics and grandstanding. Not adding more burden onto the residential group of taxpayers.
John L. Sullivan
This is a clear attempt to side step proposition 2 1/2, which limits how much taxes the city can raise and the level of annual tax increases. If the city wants to fund more affordable housing they should do so within their budget. Not pass a stealth tax on the residents of Somerville. Let the residents of Somerville vote on this measure just as we did for the high school bonds.
Studies have been conducted on localities implementing real estate transfer taxes. ALL home values decreases by the real estate transfer rate when compared to the surrounding areas. Even if only developers pay this tax, every resident that relies on their equity in their home or sells their home will feel the pain of a lower home value.
Toronto saw a 15% reduction in home sales after implementing a transfer fee. How many local jobs are tied to the housing market? How many labors will be effected by decreasing the number of sales?
By passing this tax, the board will be pushing development to other towns. Development is a double edge sword. Yes, it has pushed home values higher, but it has also increased the tax basis of the city and maintained the housing supply by rehabbing buildings. The board is rushing to get this in front of MA statehouse this April and not thinking about the unintended consequences. It is irresponsible and reckless on their part. They should not put their politics ahead of the interest of their constituents.
Judy Locchi Jacobs says:
I don’t believe any of their schemes to further extort the property owners will work —tax incentives like the transfer tax and right-of-first-refusal will fail. Here’s why—
Implementing a tax transfer will create even less supply of existing housing than we have now.
Many local homeowners are not forced to sell. Those who do are only doing so due to retirement, divorce or planned relocation.
I see few homes for sale in my area of Ward 7.
Let’s do the math— if a homeowner is sitting on $1.1 million dollar property— the seller must factor in the following which will deplete their final pay-out:
Deduction for distressed home
Restrictions imposed by Zoning Overhaul to the buyer which may prevent them from expanding on the footprint, creating condos, additions, etc.
Deductions for Capital Gains, Inheritance Tax, other taxes or liens, any other hidden costs (what city will impose before the owner can sell).
Now after all that—the Transfer Tax is imposed.
If the seller becomes desperate to sell, the buyer could reduce their purchase price and demand the seller pay the $10,000.00 to the city’s transfer tax to their so called imaginary “affordable housing”, fund which really means that a local non-profit will be given that money to build housing which will not benefit any of the working class locals. We have already witnessed who developers have intentionally avoided building affordable housing through the same slight-of-hand, now you see it- now you don’t. If the building allows for 7 condos- one must be for affordable housing. Instead, the developer will set aside which equates to proceeds for 1.5 condo. Residents now think this is great because the developer is paying extra- (.5) since there is no such 1.5 condo. Nothing but a rotten shell game they all play to trick taxpayers into thinking they win.
As far as the Right-To-First-Refusal:
It’s just another form of imposing RENT CONTROL, which the same devious handlers gain.
Tenants who want to sign up for this will be forced to take loans from the same non-profits who will gain from the tax transfer (city insiders).
Basically,how it works is this—a group of tenants sign up with a designated lender through the non-profit entity (could be one in the same), and any equity gained on the property going forward will revert back to the non-profit lender.
It sounds like what I had read a few years ago when allegedly GSachs was getting into the housing business as property managers.
As they did to unsuspecting lenders which crashed the economy in 2008– they will now prey upon the tenant who believes they will get rich on homeownership—
But instead will become the fly stuck on the spiders web, being sucked dry from loan sharks.
I’ll find the article I read on this because it provides a better outline than I described.
But my take away is this — only winners are politicians and their non-profit lenders who will benefit from these tax incentives and schemes to pretend that tenants can buy their way into homeownership.
We already saw how that worked for taxpayers and homeowners in 2008 when they took their properties back and made money again after the bailouts.
Why should we believe ONE WORD THEY SAY NOW!!!
More info on why ROFOs and ROFRs, don’t work:
Comments on:Somerville’s First Right of Refusal
C Mullane says:
Dont forget all the other fees and taxes paid when a house is sold including the capital gains tax. When will our elected officials stop thinking of new ways to tax the property owners of this cit ? With our assessments raising every year the city receives an ever increasing amount of taxes. Yet that is still not enough. A transfer tax is a punishment for those who live in the city.
How come the meeting was NOT advertised on Monday?
I am against the proposed right of first refusal. I cannot see why the city would want to hold up a sale. If the city rule holds up the sale for months – will the city immediately eliminate the property tax bill while things are being delayed?
This senior has supplied 3 rental housing units for over 30 years. I am against the right of first refusal. Why would anyone want to delay the sale for months? Assisted living and nursing homes are quite expensive in this area. The “homes” want their money for an elder to move in and they are not about to wait. This would be elder abuse if elders cannot cash out asap.
Our house is our retirement fund. We have invested a lot of time and money into it. It does not seem like a good idea to delay a sale and possibly get less money for it. We have paid higher property taxes, and income taxes on the rents for years. When selling it there is capital gains taxes. And now the city wants to reduce the sale price on a small minority of people called landlords. This is a taking of private property without just compensation.
This proposal will reduce the amount of rentals in the city. Is that what the city residents want?
Lynne Thompson says:
The city needs more rental units not fewer. Reducing the number of rental units by removing them from the pool will result in fewer rentals, higher demand, escalating rents. Tenants should think about this and protect their interests. 1st right of refusal is promoted as ‘affordable’ housing – when in reality it will raise rental costs for the majority of Somerville residents. If a tenant can afford to buy the unit at market value, say 550, they not only can compete in an open market, but they don’t meet the threshold of those most in need of assistance. Some renters have no interest in buying, planning to settle in a different community eventually or in some other cases not knowing where employment will take them. Property owners will be hurt – developers will be hesitant to invest here with all these strings attached – giving up to 120 days for a tenant to purchase. A developer wont’ wait patiently bypassing other opportunities while keeping their money. They’ll invest elsewhere, say in Medford w/o delays and conditions. Market value is another issue altogether. If a property has conditions attached, there will be fewer prospective buyers, damaging to achieving highest value from the sale and damaging property owners financially. As far as affordability and displacement, as someone born and brought up here I can speak to this issue. It’s always been the case, where blue collar working class Somervillians, large families, and others could not afford to stay. My family managed to stay by my dad working 2+ full time jobs and my mother working. It’s an age old problem and will continue to be.