Great Barrington — As the result of a long and contentious discussion at the Selectboard meeting on Monday, September 18, a proposed real estate transfer fee will not be a special town meeting warrant article.
The special town meeting, scheduled for Monday, October 23, is slated to have residents vote on a potential school district merger agreement between the Berkshire Hills and Southern Berkshire regional school districts. Great Barrington is part of the Berkshire Hills Regional School District, and Selectboard Chair Stephen Bannon is also the chair of the district’s school committee and is a member of the Eight Town Regional School District Planning Board, which is in charge of planning the merger.
The proposal for the real estate transfer fee was made back in July by Vice Chair Leigh Davis, who is also the Chair of the Selectboard and Planning Board Housing Subcommittee and is also the communications and community engagement director for Construct Inc.
According to Davis, who wrote about the proposed fee in a memo to the Selectboard before the September 18 meeting, the proposal would have been a special act that special town meeting voters would have voted on. If the special act had been approved, it “…would allow the town to impose an up to two percent property transfer fee on select properties in town.” Davis went on to explain, “The proposed bylaw that would subsequently be written would allow the town to impose a one percent transfer fee on the sale of properties exceeding a purchase price of $1 million, subject to several exemptions. This approach gives Town Meeting the authority to regulate the proposed fee by bylaw instead of locking the town into set parameters at the state level. It also allows flexibility to assess metrics and adjust in the future if needed.”
Davis wrote that, if the special act was approved, a one percent fee would be applied to all real estate transactions exceeding a purchase price of $1 million. “After the first year, the $1 million threshold will annually be adjusted to reflect the Consumer Price Index for the area, thereby protecting homeowners as their nest eggs grow,” Davis wrote. “The fee will be split between the buyer and seller; each is responsible for one-half of one percent of the sale price. Fee revenue would replenish the Affordable Housing Trust Fund each year, providing a reliable annual revenue stream to leverage additional funds and better plan strategically. Exempt from the fee shall be, among other things, transfers between family members, transfers for a value of less than $100, transfers as a result of marital dissolution, transfers between governmental units, and transfers for affordable housing. Annual reports will detail transfer fee revenue and housing impacts.”
After reading much of her memo at the meeting, the other members of the Selectboard discussed the proposal, including whether or not the board members were in favor of it and if the proposal should make it to the special town meeting warrant.
At the beginning of the discussion, Bannon said that he was strongly opposed to putting the proposal on the special town meeting warrant. “The special town meeting was called to decide whether or not Great Barrington, one of eight towns [in the two school districts], would approve the school district merger,” Bannon said. “I think we owe it to our students to reserve this meeting for the merger process and simple housekeeping items. I don’t think a controversial item belongs at this meeting. We have one chance to do a service to our students, and this would be a disservice to our students. I think this special town meeting will be talked about for years.”
Selectboard member Garfield Reed, who is on the Selectboard and Planning Board Housing Subcommittee, said that, while he supports the fee, he did not think it is a good idea to place the proposed fee on the special town meeting warrant. “I have no problem with the concept and I think it’s needed,” Reed said. “But maybe this should be [on the annual town meeting warrant] in May instead of this special meeting. I purchased my home over 36 years ago at $60,000. No matter what I do, it won’t affect me. But I do know that this could affect about 90 percent or more of the people in Great Barrington. I know money makes people a little nervous, but I think it’s needed.”
However, Selectboard member Eric Gabriel said that he is strongly against the proposed real estate transfer fee. “I have my doubts about this transfer tax, in general,” Gabriel said. “I feel that we would be doing a disservice if we approve this. People already pay $14,000-plus a year in taxes, whether it’s for five, 10, or 12 years. And then we want a piece of that margin that they just met without taking into consideration what they bought [the house for], what they invested in it, and how much in taxes they paid over 10 to 15 years. I want the Affordable Housing Trust to have a bigger budget than they have, and I think we can get it from our [annual fiscal] budget that we create every year. I think that there is no doubt that they should get more money, I just do not feel that this is the right way to do it.”
Gabriel said that “whether you own a $100,000 house in Great Barrington or a $2 million house, it’s hard to pay your tax bill.” Gabriel told Davis, “Your heart is in the right place. I completely understand it’s a [housing] emergency, it’s at a crisis. I would want [the proposal] to have as much public debate as possible, and it does seem like we’re moving towards a two-night town meeting in May. I would want this to have as much public debate as possible, but I don’t think my mind [on the proposal] will change between now and May.”
As the discussion continued, Bannon said that he was also against the proposed real estate transfer fee for many of the same reasons Gabriel cited. “When we do something like this, we normally would ask for recommendations of members of the other boards, including the Finance Committee, the Planning Board, and the Affordable Housing Trust themselves,” Bannon said. “Anecdotally, individual members of all three committees have expressed their concerns with this proposal, but we haven’t asked for a formal recommendation from them. I’m not prepared to vote yes on the real estate transfer fee. I think the town needs a comprehensive plan to deal with affordable housing and workforce housing. A piecemeal approach is destined for failure. We can’t solve the housing issues on the backs of our residents and taxpayers. You just can’t do that, and it will cause further financial issues for taxpayers, and that concerns me. In the end, the real estate transfer fee may be what’s right for Great Barrington, but I’m not convinced that now is the right time, and I’m not convinced that we’re ready to do this.”
Selectboard member Ben Elliott, however, disagreed with Gabriel and Bannon and supported the proposed fee. “I think there’s a really strong argument to having the cash on hand [for the Affordable Housing Trust] to allow them to be more nimble and getting in on these [affordable housing] projects,” Elliott said. “When we talk about affordable housing, we often hear complaining about the fact that while we get state money, and we are open to the [state’s affordable housing list] lottery, people feel like we’re not providing housing. So I think there’s a big advantage to this.”
The motion to put the proposed real estate transfer fee on the special town meeting failed to reach a majority vote. Both Bannon and Gabriel voted against the motion, while Davis and Elliott voted in favor, but Reed abstained from voting on the motion, which led to a tied 2-2 count.
