Biting The Hand That Feeds

Not content with government help in the form of an $8,000 first-time homebuyers tax credit and a property tax break for homebuilders' unsold inventory which will have a negative impact of $40-45 million on local government revenues, the Triangle Community Coalition (an organization of realtors and homebuilders) is begging for funds in order to bite the hand that feeds, according to a recent letter to supporters:

Dear Friends of the Triangle Community Coalition,

I am coming to you today with hat in hand. The TCC is in great need. As our political environment is showing the need for our organization every single day, our reserves are dwindling. I do not want to waste your time with a recollection of how hard times are right now. As a business leader in this community, you know what it is like better than anyone. Unfortunately, politics carry on even in the most difficult of economic times and right now we need to be more vigilant than ever.

We cannot afford to ignore politics while we try and stay in business. If we do, then we are increasing our chances of being out of business tomorrow. Every governmental agency is out there is looking for ways to raise revenues while we spend countless nights trying to figure out where to put the few dollars we have to spend.

I'd like you to add the TCC as one of your choices for advertising. Sponsorship of one of the upcoming TCC programs will help your business in more ways than one. You will get all the advertising we can possibly get for your money and it will help our organization help take care of the politics, while you take care of your business.

With sponsorship money tight for everyone, TCC has taken a huge hit. We are committed to being relevant to your business and politics in the Triangle. We are planning on holding our two signature events: the Candidate School (July 30) and the Political Pig Pickin'(August 27). We also have a strong programs committee that has been coordinating well attended Lunch & Learn events.

If you can commit to a sponsorship for any of these events, please contact Charlene at ********@tricc.org or visit our website at www.tricc.org for more information. Some events are time sensitive, so please pledge a sponsorship as soon as possible so that we can provide you maximum exposure.

Thank you for your time and considerations,

Laurie Donofrio
2009 TCC Chairman

Update: The sponsorship solicitation email was sent to multiple TCC Members and "Triangle Business Leaders". The email was shared by a non-member "Triangle Business Leader" recipient.

To: undisclosed-recipients
Subject: TCC- Request to Members/Triangle Business Leaders

Builders Make Great Case For Transfer Tax

It is generally accepted that the housing bubble precipitated the current recession. Easy access to money and low interest rates fueled housing inflation that made housing speculation profitable without growth in the underlying economy. In 2007 the Chief Executive of the National Association of Homebuilders acknowledged that overbuilding during the boom years was a factor in the housing meltdown.

That same year NC Realtors and Homebuilders fought tooth and nail at the Legislature to prevent counties from having a transfer tax option to pay for the infrastructure demanded by housing growth. Although unsuccessful at the Legislature in 2007 they have since spent millions to defeat transfer tax proposals at the polls in local referendums.

Proponents of the transfer tax argue that it relieves some of the burden of property tax by deferring it until a sale when cash flow is available, especially for existing homeowners on fixed incomes with over-inflated home values. Realtors and Homebuilders argued against it saying "Fight the Home Tax - It's a Bad Idea". Now faced with unsold inventories of speculatively built houses NC Homebuilders have turned to the Legislature for relief from "some of the burden of property tax by deferring it until a sale when cash flow is available."

House Bill 852, "Defer Tax on Builders' Inventory", has sailed quietly through the House, 106 votes to 8, and through committees, and is calendered for a Senate vote Wednesday July 8th, with little opposition expected. In fiscal years 2010-11 and 2011-12 combined this bill is projected to have a negative effect on county and municipal revenues of $40-$45 million.

"A builder may defer the portion of tax imposed on real property that represents the increase in value of the property attributable solely to improvements resulting from the construction by the builder of a residence on the property."

Homeowners will find no such relief and local governments will have to cut services or raise revenues to make up the $40-$45 million shortfall. Realtors and Homebuilders have argued that taxing the equity in homes is a bad idea but now they argue that "It's a Good Idea" when it comes to builders who overbuilt in the boom years straining infrastructure and local revenue streams. The NC Homebuilders make a great case for the transfer tax.