Stockbridge — Great Barrington Selectboard Vice Chair Leigh Davis made a pitch to the Stockbridge Select Board on September 14 to consider a proposal that would tax, in the form of a transfer fee, the purchase of real estate in excess of $1 million, funds that could assist with the town’s affordable housing program. Without a specific petition before them, however, most board members did not bite, and the issue may be raised again at an upcoming meeting.
“I zeroed in on the real estate transfer fee as one opportunity to provide revenue to fund affordable and workforce housing,” said Davis, who also serves as chair of Great Barrington’s housing subcommittee that considered the measure for about eight months.
The issue is listed for discussion on the agenda for Great Barrington Selectboard’s September 18 meeting, when members will vote on whether to move forward with the proposal and add it to the Special Town Meeting Warrant planned for October 23, the session that may include a vote of the merger of local school districts.
West Stockbridge Select Board Chair Kathleen Keresey was in the audience for the Stockbridge session.
“I don’t need to say to anyone that there is a housing crisis,” Davis said. “It’s not just a Great Barrington issue, it’s not just a Stockbridge issue; it’s a regional issue, it’s a national issue.” She said she is part of a group that is trying to think of ways to generate revenue and provide programs and solutions to the issue. “This proposal is just a foot in the door; there’s nothing locked in stone,” Davis said of the transfer tax. “What we need to do is to give residents something to vote on so that it can go on to a warrant.”
The proposed transfer tax: how it works, a multistep process
Before such a transfer tax can be instituted, Davis said the Great Barrington Selectboard must approve putting the question to the voters via a Home Rule Petition—in this case, at the October 23 town meeting. If the Selectboard moves forward, the proposed Special Act at the town meeting would be crafted to allow a town to impose a property transfer fee of up to 2 percent on certain real estate transactions, Davis said. But each town can design their own fee limits up to that maximum.
For instance, she said a town could impose a 1 percent transfer fee whenever properties—commercial, industrial, or residential—of at least $1 million are sold, with the buyer and seller splitting that fee for a tax effect of 0.5 percent each. In Great Barrington, in 2022, 14 properties changed hands for more than $1 million, bringing in a tally of $20 million to be subject to the transfer fee if it had been in place, adding just over $200,000 to the town’s Affordable Housing Trust, Davis said. Any revenue earned by this transfer fee is deposited in the trust’s fund and could be used to purchase property, setting the resale or rental value at affordable rates that could be accessed by teachers, retail employees, and restaurant workers, she explained.
“The people that are working here, to be able to afford a two-bedroom apartment, you need to make $28 an hour,” David said, adding that longtime residents of the area are being pushed out. “The typical service wage is probably closer to $19 an hour.”
Should the tax, or Special Act, be approved by town residents, the State Legislature is required to sign off on the measure before it goes back to the town to design the bylaw and fee regulation specifics. That final regulation is then put to the residents for approval.
“We know that homes are nest eggs, and we don’t want to tax the people unnecessarily to feel this burden,” Davis said. “But what we are cognizant of is there’s this great disparity of assessed value versus sale price. They are just on completely opposite ends.”
She said area developers have applauded this measure as “they can see that the coffee shops are closing early, or the restaurants are not opening, or that the barista is moving to Northampton because they can’t afford their property.”
According to Davis, Great Barrington’s homes appreciated 73 percent over the past five years. “People have made quite a lot of money, so you consider 73 percent appreciation over five years on your property and the half percent that we’re asking the buyer or the seller to pay, it really puts things in perspective,” she said.
There are 18 Massachusetts municipalities with similar Home Rule Petitions pending in the State Legislature, illustrating the number of towns and cities struggling with housing issues, Davis said. Legislation is pending that could allow smaller municipalities to avoid the multistep approach, removing the state approval part of the process, Davis said.
“What’s important to know is [the transfer tax] provides a reliable revenue stream to your affordable housing trust fund, for them to start planning strategically and for them to have something that replenishes each year,” she said.
Member Patrick White, who, according to Davis, asked her to speak to the board, pushed for Stockbridge to get the idea voted on “as a placeholder” to move the measure forward to the Legislature before it goes back to the town for specifics on implementation. “If we don’t get the Home Rule Petition passed, we can’t even consider it,” he said of voting on the petition and not the bylaw itself. “And, I want to use Stockbridge money to help Stockbridge residents.”
Without a Home Rule Petition draft before them, however, board members declined to take action.
Also at the meeting:
Members:
- Approved the Municipal Electric Aggregation Plan for submittal to the Department of Public Utilities;
- Approved one day alcohol licenses for Berkshire Botanical Garden on Sept. 22, Sept. 29, and Dec. 8;
- Appointed Karen Marshall (three-year term), Candace Currie (three-year term), Peter Williams (two-year term), Patricia Flinn (two-year term), and Patrick White (one-year term as Select Board representative) to the Cemetery Commission;
- Announced an open seat on the Council on Aging as well as its director position;
- Approved an intermunicipal agreement between Great Barrington, Lee, Lenox, and Stockbridge to share inspection and zoning enforcement services; and
- Heard an update from Town Administrator Michael Canales that the Chime Tower will be repaired from Sept. 26 to Oct. 6, including replacing its bells; that the paving and crosswalks contract has been executed with Palmer Paving and the paving schedule will be communicated to residents by CodeRed; that a bid has been awarded for Ice Glen treatments; and that the design of the new salt shed is moving forward.
