Dear Billy T and Somerville Speakup Line,
Dear Board Of Alderman,
I write to you ALL because, as a current Somerville resident and home owner, I am frustrated. I feel the board has misled the public with regard to impact to current owner residents. Numerous times, the BOA stated current residents will not need to pay the tax, but is it your belief they will be affected? However, Somerville’s own report in fact indicates the contrary and states all current owner will potentially be negatively affected by lower sale price offers. It is also supported by basic econ 101 macro economic principles and empirical evidence studies.
Please, can every Board of Alderman, clearly go on the record on this issue. Answer the questions below and provide all the facts to the public. To the best of my knowledge, this issue was never publicly addressed and I personally brought this up in many emails with members of the board and never received a stance or opinion on this issue.
This is not my opinion but based on Somerville’s own consultant report on the tax, macro economic principles and empirical evidence studies.
If a private investor buys the property from a resident, and “the tax is imposed on the buyer, the buyer will simply reduce their purchase offer ” (RKG Associates – REAL PROPERTY TRANSFER FEE IMPACT ANALYSIS Somerville, Massachusetts October 2017).
“Data show that Toronto’s 1.1% tax caused a 15% decline in the number of sales and a decline in housing prices about equal to the tax” (Journal of Economic Geography Advance Access published May 6, 2011)
Questions for Somerville’s Board of Alderman
1. Do you believe that it is acceptable for current residents to indirectly pay for the tax, through possible lower home sale prices? A large portion of Somerville is non-owner occupied so moving forward a large portion of the buyers will inevitably a large portion of the buying market will be paying the tax and thus reducing their purchase offers. This is in line with economic theory, Somerville’s own report and empirical evidence. If so why was this not discussed or disclosed to the public?
2. You clearly state that current residents will not pay the tax, but will current residents be indirectly impacted by the tax through lower offer prices?
a. If you believe current residents will not be affected, do you have a source of information that counters Somerville’s own report by RKG, empirical evidence and economic theory. And if so, why was why was this issue not disclosed to the public?
b. Will this assessment hold true when the real estate market is a buyer’s market?
3. Were you even aware of this issue during deliberations? I wrote many emails to all Board Of Alderman highlighting this issue. If you were aware of this issue, why was this issue not disclosed to the public in any of the numerous fact sheets and articles written by Board of Alderman in support of the tax?