Opposites

A POV article appeared last week in the Raleigh News & Observer. Written by Tim Minton, executive vice-president of the Home Builders Association of Wake County, it parroted the NC Realtors' opposition to an option to vote on a transfer tax. Mintons' group is spending $75,000 to air TV ads that point to the NC Realtors website. As if they needed help given the $500,000 they've spent this year so far. Stan Norwalk had an excellent op-ed the following day, "Another Reason We're Behind", on construction price inflation that Minton so conveniently ignored.

The homebuilders' opposition to a transfer tax option makes little sense in the current context. They have to know that failure of a transfer tax option will result in moratoria on housing development or more pressure to use Impact Fees and Adequate Public Facility Ordinances that will have an even greater impact on homebuilders costs than a transfer tax. The Minton article had a unique spin that was somewhat incoherent and spurred several people to write letters including myself. My op-ed opposition letter was printed Tuesday:

Tim Minton's July 5 Point of View piece against a 1 percent transfer tax has some hilarious contradictions and omissions.

Minton, executive vice president of the Home Builders Association of Raleigh-Wake County, claims his organization is opposed to real estate fees, but the Homebuilders never question Realtors' 6 percent commission. Spending $75,000 on TV ads to support the Realtors' $500,000 campaign proves where their allegiance lies (not with homeowners).

Minton claims sellers will pay the tax, but in the next paragraph claims that buyers will pay the tax. He claims some buyers will pay more in tax than a down payment. Buyers who barely afford a 1 percent down payment will struggle with subsequent costs of ownership. (And how can a first-time homebuyer be selling a house before owning one?)

Minton suggests it is a tax on residential property. It is a tax on all real property including land and commercial properties (whose revenues subsidize public services in new residential areas).

The transfer tax is less volatile than sales tax and generates revenue during economic growth when needed most for capital investments. Homebuilders' and Realtors' "nonsolution" would raise existing sales taxes and property taxes on all current residents including those on fixed incomes.

Other voices on the Letters page:

Selfish Motives | A Rotten System | The Profit Motive | Finding What's Fair | Pressure Points

Don't just take my word for it. The News & Observer had a editorial also: At The Closing

Despite intense pressure from Realtors and homebuilders, state legislators need to consider fairly a real estate transfer tax