Street roots
Oct 28, 2011
Realtors seek to amend state constitution over transfer taxes
Ballot initiative would close the door on one tool affordable housing advocates had sought for lowfncome residents
BY JOANNE ZUHL
homelessness, and we need to look at all of
our possible options. Real estate transfer
taxes or document recording fees are small
assessments which can raise funds to help
those among us who need a safe place to
call home.”
Banning these kinds of assessments
permanently takes away options for
governments and communities to use in
considering ways to solve problems, says
Byrd.
“Local communities and the State
Legislature should have the ability to .
consider all our options, particularly in
times of economic downturn,” Byrd says.
“It’s also a bad idea to alter the constitution
for specific issues.”
STAFF WRITER
wo years ago, the state of Oregon
took a bold move to create a
sustainable funding source for
affordable, low-income housing. The
document recording fee — a $15 fee on real
estate documents filed with the state -
generated an estimated $18.5 million in the
2009-2011 biennium, dedicated to multi
family rental housing, homeownership
assistance, and homelessness prevention for
working families, seniors and people with
disabilities.
It will be the last of its kind, if a proposed
constitutional amendment runs its course in
the 2012 general election,
A ballot initiative now circulating seeks to
prohibit state and local governments from
imposing taxes, fees or assessments on the
transfer of any interest in real property. The
initiative exempts such assessments in place
as of Dec. 31, 2009, which includes the
document recording fee. Across the country,
many states and local municipalities have
similar assessments in place, often a small
percentage — between 0.5 and 1.5 percent
in most instances — applied to the sale value
of the house, that is then applied to general
or specific uses by government
It may seem superfluous to put such
language in the state constitution given that
the Oregon State Legislature has had a
preemption in place since 1995 that
prohibits local governments and the state
from adopting such a tax. This initiative
goes further in amending the state
constitution, taking the decision but of
legislators’ hands. Petitioners need to
gather nearly 117,000 signatures to get the
initiative ontheballot.
- Pushing the initiative forward is the
Oregon Association of Realtors, which
succeeded in getting the preemption
established in 1995. The state agency is
backed by a nationwide movement of the
National Association of Realtors and funded
through a special $75 assessment on
Oregon Realtor members. With
approximately 14,000 Realtors across
Portland, the fund is expected to generate
about $1 million for the campaign named
Protect Oregon Homes.
a
"Local communities and the
state legislature should have
the ability to consider all our
options, particularly in times
of economic downturn," Byrd
says. "It's also a bad idea to
alter the constitution for
specific issues."
— JANET BYRD
. - HOUSING AUTHORITY
For Realtors, the preemption in placéis
not enough to protect against a real estate
transfer tax, or RETT, which could tàck on
thousands of dollars in the sale of a house.
Given the economic climate, the Realtors
Association says the pressure on lawmakers
to impose áuch à taxi^tooteitipting.
“In eveiy session there are bills
introduced so that there can be transfer
taxes,” says Art Kegler, à Realtor in
Boardman who is the chief petitioner on the
initiative. “It could be overturned in thè
legislature very easily. There were three
bills for transfer taxes in the last session
alone.”
Kegler argues that such a tax penalizes
home buyers and sellers, and is not
conducive to the recovery bf the real estate
market, to employment or business. Kegler
is also the chairman of the Oregon Real
Estate Agency, the state agency assigned to
consumer protection in real estate
transactions. His term ends in December.
Kegler says Protect Oregon Homes has
about 100,000 signatures toward its goal of
165,000 to ensure the initiative is on the
ballot in 2012.
“I think in this particular environment,
most people are selling because they have
to, not because they choose to, said Shaun
Jillions with the Oregon Association of
Realtors. “And we’re seeing a rampant rise
in distressed propertiès, foreclosures and
short sales where people aren’t walking
away with any money. They don’t have the
money to bring to the table,” Jillions said.
. On the other side of the issue are
affordable housing advocates whb for years
hive called fofîawmakers to rescind the
RETT preemption to pave the way for à new
sustainable resource for low-incomé
housing.
“Real estate transfer taxes, document
recording fees and other assessments that
would be banned by the proposed initiative
are all tools in a tool box that government
can use,” says Janet Byrd, executive director
of the Housing Alliance, a statewide
coalition of affordable housing advocates.
“We don’t have any simple answers for how
to solve the problems were facing such as
unicipalities and counties across
the state of Washington have real
estate transfer taxes in place, in
addition to a 1.28 percent Statewide transfer
fee. These fees can vary widely, and there
are often exemptions in place, such as
minimum values or for family transactions.
Nationwide, transfer taxes raise billions for
local governments.
Washington County is the only local
government in Oregon that currently has a
real estate transfer tax in place. The county
assesses 0.1 percent, or $1 per $1,000 of
assessed value of a home at the time of sale.
It was put in place in 1977, and raises
millions each year for the county’s general
fund. In 2006, during the peak of the
housing bubble, the tax raised $5.9 million.
In 2007, it raised $5.6 million. Those figures
dropped in 2008 when the bubble burst, and
in, the 2010-11 fiscal year, the county took in
$2.2 million from the tax. Like the
document recording fee, Washington
County’s tax would be grandfathered in if
the amendment is passed.
“For Multnomah County, one of our
primary agenda items each year is to repeal
preemptions on local governments and
ensure that no more preemptions are
passed, regardless of the issue,” says
County Commissioner Deborah Kafoury.
“Local governments are so strapped right
M
See TRANSFER TAX, page 7
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