REALTORS® support increase in Franklin County transfer tax

CBR Endorses raising the Franklin County transfer tax from $1 to $2 per $1,000

Provided the additional money is dedicated to addressing the county's affordable housing needs

As REALTORS® and citizens of Central Ohio, many of you may have heard that the Columbus Board of REALTORS® was considering supporting an increase in the Franklin County transfer tax. After much discussion, the Board of Directors voted to support a $1 increase in the conveyance fee. This may come as a shock as the REALTOR® organization has been diligent over the years in opposing an increase in fees associated with the transfer of property. Therefore, we want to share with you why we took this action.

Franklin County needs additional funding

Earlier this summer, in an effort to generate enough money to fund the County's budget in 2006-2007, the Franklin County Commissioners held hearings for three long days.

The General Fund "carry-over" cash has dropped from $99 Million to $14 Million since 2002. Since 2002, the commissioners have cut the budget by $28 Million, or 9.1% less, even in the face of unfunded mandates of over $26 Million per year from the state and federal governments. Most funds were budgeted for additional security and law enforcement brought about by 911.

Revenue receipts for the General Fund have been described as "flat" since 2002:

• $233 Million
• 226 Million
• 225 Million

Yet, expenditures have risen over the past 3 years:

• $245 Million 10.8%
• 242 Million -1.16%
• 247 Million 2.03%

The projected shortfall for 2006 without revenue enhancement is $55 million.

In order to fund this shortage, Franklin County Commissioners voted 2-1 this summer to raise the sales tax. As no petition drive was mounted to place the issue on the November ballot; the $.50 increase went into effect on October 1, 2005 and will continue through December 31, 2007.

The additional $.50 should raise approximately $88 million, with $44 million allocated annually to replenish the County's reserve fund. (This still leaves a deficit of approximately $11 million.)

Of the estimated $88 Million raised, $66 million (75%) would be paid by residents of Franklin County and $22 million (25%) would be paid by out-of-county taxpayers. In other words, for every $1 of sales tax collected from Franklin County Residents, out-of-county residents will pay $.33

Franklin County needs more affordable housing

The National Association of REALTORS® recently released a poll showing that lack of affordable housing ranks second only to health-care in the list of problems cited by Americans.

During the hearings, testimony from numerous housing representatives justified the need for a "dedicated source of funds for Affordable Housing.

For those who dream of homeownership, the average price of a home in Franklin County has increased by 79% in the last ten years, but low-moderate incomes have only increased by 2.9% each year. For those earning between 40 and 60% of the area median income, this equates to a gross income of $25,000 to $35,000 for a family of four.

Approximately 31,000 Franklin County renter households with incomes at or below 30% of the median family income are paying more than 30% of their income for housing costs. Of these, about 25,000 are severely cost burdened paying more than 50% of their income for housing and utilities.

Low-income workers in Franklin County must earn $12.98 per hour and work 101 hours per week in order to rent a modest two-bedroom apartment while paying no more than 30% of their income for housing.

In Franklin County, 22,000 affordable rental units are needed at or below 30% of median income and 15,200 units for households with an annual income below $10,000.

This year, the Community Shelter Board, through its partner agencies, will provide emergency shelter services to more than 3,500 single men, 1,100 single women, and 2,300 persons in families, including 1,445 children.

Approximately 85% of those served by CSB are individuals and families that are experiencing an economic crisis; the other 15% are individuals that have more longterm needs due to issues such as mental or physical disabilities.

By June 30, 2005, the Housing Trust had allocated all of its available funding for affordable housing ($5.7 Million).

A dedicated and increased funding source for the Housing Trust and the Community Shelter Board is not an expense - i'ts an investment that stabilizes families and roots neighborhoods one project at a time.

REALTORS® support opportunities for homeownership

The Columbus Board of REALTORS® has been recognized nationally as a leader in providing and supporting affordable housing. We feel it is our responsibility to work to improve conditions in our area and provide greater opportunities for potential homeowners.

Taking a proactive approach

As you can see, funding for affordable housing initiatives is necessary. As Commissioners continue to exhaust all other alternative, we believe an increase in the transfer fee is inevitable. By being proactive, Central Ohio REALTORS® can become a part of the proposal and solution.

Therefore, the Columbus Board of REALTORS® has voted to endorse an increase of $1 in the transfer fee for real estate conveyances for Franklin County to $2.00 per $1,000, contingent upon receiving a pledge from the Franklin County Commissioners that the entire amount of additional taxes raised (approx. $6.5 Million) be "dedicated" to help address the affordable housing needs in Franklin County.

• $3.25 Million for affordable housing development
• $3.25 Million for Homelessness prevention, housing & shelter

FYI

The current transfer fee in Franklin County is $1 per $1,000, well below other Ohio counties.

• Delaware County - $3
• Licking County - $2 (Commissioners raised sales tax in lieu of an increase in the Transfer Fee in August, 2005.)
• Fairfield County - $4 (raised in June, 2005 after defeat of a referendum for an increase in the sales tax)
• Fayette County - $3 (raised $2 in 2004 to fund the GIS, with the support of the REALTORS® of Fayette County, after CBR intervention).

Three of fastest growing counties in Ohio have higher transfer fees: Delaware County - $3; Warren County - $3; Clermont County - $3.

Even with the increase, Franklin County will continue to have the lowest real estate conveyance fee among all of the mid-size, large, or urban counties in Ohio.