Street roots
Sept. 28, 2012
REALTORS, from page 8
J.Z.: The m easure’s proponents claim that
the cost o f an additional tax or fee would stifle
real estate sales, an d that it is a serious
burden to homebuyers an d sellers to have
thousands o f dollars added to their costs. They
say it could p u t a home out o f reach fo r a first
time homeowner. A s a real estate professional,
do you agree?
C .B .: I don’t, and the reason I don’t is
that when I look at real estate transfer fees
across the nation, there are a lot of creative
ways to make sure that it does not end up
squelching home ownership for those that
are on the edge. Many of them include first-
time-buyer exemptions, some of them make
it progressive so that the longer you own
the home, the less the tax is, so that it
doesn’t penalize long-term homeowners.
The philosophy of a transfer fee is to
recognize that when a property transfers
hands — particularly when there’s a lot of
churning of the market, people coming in
and flipping homes, doing it every couple
years — it takes a toll on the community. It’s
a shift in who lives there. It may be
displacing renters. It’s just something that,
as a community, I don’t want to go
encourage.
J.Z.: It used to be that a home was a place
you bought to live in a n d raise a fam ily. Today
it is an investment priority. You mentioned the
churn; houses that are bought and sold fo r the
profit, not as a housing resource. H ow does
that aspect o f the market play into this?
C .B .: Some of that has slowed due to the
economy. I think some people are looking at
whether it is the kind of investment they
can afford, for one, and that they want to
make.
Home ownership is not for everyone, and
I think it’s important to recognize that and
make sure that we are not, on one hand,
incentivizing people to buy homes to the
point where it’s not a good economic
decision for them: with the mortgage
interest deduction, being able to deduct
your property taxes, having incentives for
home buying. But making sure you’re
looking at the big picture. And stability is
what is most important for the community
and I think what builds real wealth and
livability is people being able to stay where
they are for a long period of time. Have the
kids stay in the same schools, having them
create communities within their
neighborhoods and be near family and
friends, or whatever the reason is they
moved there.
There’s a bigger picture to look at than
just whether a property sale should be taxed
or not.
J.Z.: You m ention the mortgage tax
deduction: I t ’s the largest housing subsidy in
the country, but it never draws the criticism
that arises when we talk about rental subsidies
fo r low-income fam ilies.
C .B .: Homeowners live in subsidized
housing. Let’s look at tax policies on
homeownership and housing in a very
holistic and logical way and not try to parse
it into little pieces and go and amend the
constitution to garner a better position for
our trade group.
We need a global conversation on housing
and to look at it more as a human right than
some sort of expectation that’s that is how
we’re going to make it to the American
Dream. Because the bottom line is it hasn’t
worked. Homeownership is not the ticket to
the American Dream. It can be a part of
what can be the American Dream for some
people, but I think we need to reprioritize
and look at getting affordable housing for
everyone instead of people want to buy a
home.
J.Z.: Talking about protections against it
being a fin a n cia l hardship, you mentioned
exemptions fo r first-time homeowners and fo r
long-time homeowners. A n d I believe the first
$200,000 o f the home can be exempt, is that
the case?
C .B .: Municipalities have used different
tools to make sure it has not become a
barrier to homeownership. Because
obviously, no one who is going to be
proposing a real estate transfer fee,
especially if it’s going to go toward
affordable housing, is going to want to do
the opposite. It is how you craft it. That’s
why you see them often have many
parameters surrounding them.
The other issue that the real estate
association keeps bringing up is that many
people are underwater and that this makes
it more difficult. I can tell you from
experience, the people I work with, some
are underwater so much that they’re
performing a short sale, meaning the bank
is the one who is going to lose in the end.
It’s not holding them back from selling, if
they’re a couple thousand dollars short. I’m
seeing people who are $20,000 $40,000,
$400,000 short on what they owe. So this is
not going to affect that population in my
view. People either wait in their homes until
the value has resurfaced, or they short sale
with the bank.
There are a lot of issues that for me are
so day-to-day and so critical to our clients,
that are the kind of issues I would love to
see the Association of Realtors really work
on to make sure we are able to conduct
business. (Short sales) are an issue that
holds us back from being able to conduct
business more than any transfer fee could.
It slows sales. I have a short sale that’s been
in escrow for nine months. So how can
-------------------
I K
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■ 8
J.Z.: A n d that
would help the market
regardless o f the
economic forces out o f
your control?
C .B .: Exactly. It’s a
way to deal with a
difficult economic
situation we’re in in a
way that’s truly
helpful, not just for
the practitioners, the
Realtors in the
trenches, but also for
all the buyers and
sellers who are trying
to buy and sell
property.
Hom e
G ro w n
with private developers; they would hide
provisions in covenants, conditions and
restrictions that every time the property
transferred, the developer got money. That
is very different from what we’re talking
about. If there were to be a real estate
transfer fee, it would be set aside for a very
specific reason. And that would be the
voters’ choice. That’s what it is about -
giving voters and opportunity to say hey, we
see a need here is a potential funding
source, and why prevent the voters from
making that decision?
J.Z.: Does Oregon’s
affordable housing
need a real estate
transfer fee?
1 feiiow that there are
defin itely Realtors who are
very mods la favor of this
and that doesn't surprise me,
bat I th in k there are a lo t of
Realtors who are not sore
where this came from ~ not
sure why this Is where th e ir
money Is being spent, Und
are guile frankly, jnst
neutral on the Issue«
Realtors has raised about $1 m illion in its
assessment on its members fo r this campaign.
B u t where are individu al agents on this - are
they rallying behind this?
C .B .: No one that I have spoken to was
pleased or aware of the decision when it
was made back when we got the first
notification that we would be assessed. I
think there’s a tremendous lack of
awareness in the real estate community that
this is happening and what it’s really about.
I know that there are definitely Realtors
who are very much in favor of this and that
doesn’t surprise me, but I think there are a
lot of Realtors who are not sure where this
came from - not sure why this is where
their money is being spent. And are quite
frankly, just neutral on the issue. It’s not a
problem for Realtors. It has not been an
issue for folks in Washington County. It has
not slowed development there.
J.Z.: Would such a tax help the real estate
market?
C .B .: If Oregon were to adopt a transfer
fee, I think it would help Oregonians. I’m
hard pressed to say it would help the
Realtors. But I don’t think it’s our job to
amend the constitution to help Realtors. I
think our job is to amend the constitution to
help Oregonians.
J.Z.: Other states have or have had transfer
taxes that sent the money to a developer o f a
subdivision. They were m oneym aking deals fo r
the developer.
s
ill
M il
■■
C .B .: Oregon’s
affordable housing
needs something. I
think that taking a
tool like this off the
table for
municipalities and
the state in general
is a mistake in that
we are seeing the
needs skyrocket. And
the problem is not
going away. So to
ignore it is at our
peril. Because what
happens when
people can’t afford
homes is they will be
sleeping on your porch, whether it’s your
business or your home. They are sleeping
on family’s couches. Our whole economy
starts to quiver because those people then
can’t be effective in their lives. If you don’t
have an affordable place to live, you’re
either consumed with the issue to the point
it affects your work, your school
performance and your abilities to parent, for
example. Or you’re quite literally on the
street just trying to survive. And that’s not a
community I want to live in.
Without some sort of sign that the
problem is getting better, we’ve got to look
at solutions, and whether it’s the transfer
fee or other funding mechanisms, I’m
willing to get creative and see what’s out
there. And I think most Oregonians are.
J.Z.: We know the N ational Association o f
Q
NEW SEA SO N S
C .B .: That is something that happened
someone, buyers or sellers, efficiently live
their lives when it’s all on hold over two
banks fighting it out back east? Working on
that issue would create more sales, it would
give people more certainty in terms of when
they go to sell their house short sale, it
would give buyers more incentive to buy
short sales, because it wouldn’t be such a
nightmare to go through.
The federal government is trying to get
banks to work better on this, because it
recognizes that short sales are a good
answer to the problem we’re in, and that if
banks were able to systematize it and make
it more efficient, with more known how the
process worked, it
would help the
market.
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