In an open letter to the editor, Philip Orenstein raises concerns about the proposed Real Estate Transfer Fee for affordable and workforce housing in Great Barrington. While supportive of the objective, Orenstein argues that the high property tax rate in the town makes the adoption of this fee impractical.
Orenstein highlights that one of the main sources of property tax revenue for Great Barrington is new growth, particularly newly constructed homes. Potential homeowners considering location factors often take into account the property tax rates of neighboring towns. Unfortunately, Great Barrington’s tax rate is significantly higher than those of its neighbors. This poses a risk of potential home construction projects being shifted to neighboring towns, resulting in a loss of tax revenue for Great Barrington.
The proposed transfer fee would generate proceeds for the town, but encouraging new home projects to shift elsewhere would cost Great Barrington even more in foregone tax revenue. Orenstein argues that this fee would only add to the town’s reputation as a high-tax area and push new tax growth to other towns.
While it is acknowledged that higher-end home construction does not address the affordable housing problem, the tax revenue generated from such projects is vital for funding critical investments in schools and water systems. Orenstein believes that the town should consider other alternatives such as increasing the portion of Community Preservation Act funds allocated to affordable housing.
Orenstein also points out that sellers already pay a transfer stamp tax to the state on property sales. Therefore, the proposed transfer fee would be an additional tax burden for property sellers in Great Barrington.
It is worth noting that other Massachusetts towns seeking to enact a similar real estate transfer fee generally have significantly lower tax rates than Great Barrington.
Ultimately, Orenstein urges careful consideration of the full range of impacts before adopting the proposed Real Estate Transfer Fee.
– Division of Local Services, Massachusetts Department of Revenue
– Local Option for Housing Affordability (LOHA) Coalition