The Association has produced an entertaining video, using kids, to remind home owners, in a lighthearted way, that it is still important for them to contact Mayor Ed Lee to express opposition to the transfer tax rate increases he proposed a couple of months ago. If the proposed increases gain traction, they could wind up on the November ballot where they would require only a majority of voters to put the proposal into effect.

Click on the link below to view the video. If you are so disposed, share the video with your friends on Facebook, your e-mail contacts and Twitter followers, and invite them to join the campaign to stop the transfer tax rate increases.

http://www.youtube.com/watch?v=Xmld5t7fF-4&feature=youtu.be

Although it is only in the discussion stage right now, if the proposed transfer tax rate increases are approved by the voters, they would generate an additional $50 million in revenue each year per year and provide the city with funds it says it needs for affordable housing construction.

The increases would affect all properties transferred for $5 million or less.

For properties selling for $1 million or less, the transfer tax rate would increase by .5 percent. This would raise an estimated $32 million each year.

For properties selling for more than $1 million and up to $5 million, the transfer tax rate would increase by 1 percent. This would raise an estimated $22 million each year.

If the proposal appears on the ballot and is approved by a majority of the voters, the city’s new transfer tax rates would be as follows:

• More than $100 but less than or equal to $250,000, one percent of the sale price.
• More than $250,000 but less than $1,000,000, 1.18 percent of the sale price.
• More than $1,000,000 but less than $5,000,000 1.75 percent of the sale price.
• More than $5,000,000 but less than $10,000,000, two percent of the sale price.
• Over $10,000,000, 2.5 percent of the sale price.

The Association has been waging an aggressive campaign to induce the mayor and other policy makers to drop the idea of proposing transfer tax rate increases. The Association’s campaign has included a mass e-mail sent to 38,000 home owners with two direct mail follow-ups urging property owners to sign a petition and send it electronically to the mayor. Almost 1,500 petitions have been received by the mayor’s office.

C.A.R. is opposing SB 1220 (DeSaulnier), which imposes a transfer tax to generate funds for affordable housing. C.A.R. is opposing SB 1220 because it will add to the cost of buying a home at a time when the housing market is struggling to recover. C.A.R. is an aggressive advocate for affordable housing, but believes it is bad policy to fund affordable housing by making housing less affordable and to fund affordable housing at the expense of home buyers.

Sen. DeSaulnier has introduced SB 1220 to permanently fund an affordable housing trust fund. Unfortunately, SB 1220 creates a real estate transfer tax of $75 per document to fund this program. In virtually all transactions, a minimum of three documents are recorded – the grant deed, the release and reconveyance, and a trust deed. SB 1220 will create a minimum $225 transfer tax, and the amount could be even higher, depending on the total number of documents recorded.

Certain nonprofit groups are attempting to mobilize C.A.R. members to garner support for this bill, despite C.A.R.’s opposition.  Please be aware of these communications, and if you received any, please forward to DeAnn Kerr at deannk@car.org.

While C.A.R. adamantly supports the creation of homeownership opportunities, SB 1220 is clearly not the way to achieve this goal.

SB 1220 is expected to have a hearing in the Senate in April.

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Although it is only in the discussion stage right now, the mayor’s office is considering putting a proposal on the ballot this November that, if approved by a majority of the voters, would raise $50 million per year by increasing the transfer tax on every home sold, including rental units, for $5 million or less.

For properties selling for $1 million or less, the transfer tax rate would increase by .5 percent. This would raise an estimated $32 million per year.

For properties selling for more than $1 million and up to $5 million, the transfer tax rate would increase by 1 percent. This would raise an estimated $22 million per year.

If the proposal appears on the ballot and is approved by a majority of the voters, the city’s new transfer tax rates would be as follows:

• More than $100 but less than or equal to $250,000, one percent of the sale price.
• More than $250,000 but less than $1,000,000, 1.18 percent of the sale price.
• More than $1,000,000 but less than $5,000,000 1.75 percent of the sale price.
• More than $5,000,000 but less than $10,000,000, two percent of the sale price.
• Over $10,000,000, 2.5 percent of the sale price.

The Association has been waging an aggressive campaign to induce the mayor and other policy makers to drop the idea of proposing increases in the transfer tax. But the city says it needs to raise $50 million annually to make up for the loss of State funds resulting from the recent dissolution of redevelopment agencies statewide by Governor Jerry Brown and the State legislature.

The Association’s campaign has included a mass e-mail sent to 38,000 homeowners with two direct mail follow-ups urging property owners to sign a petition and send it electronically to the mayor. A link to the first direct mail piece appears at the end of this article.

The Association is actively working with the mayor’s office to identify fund sources other than the transfer tax that would provide the city with what it needs to continue the work of its defunct redevelopment agency.

Policy makers, including Mayor Ed Lee, are proposing an increase in the rate of the real property transfer tax. Details concerning the proposed increase are not known at this time.

It is critically important for EVERYONE to contact the mayor to express their opposition to any increase in the rate of the real property transfer tax AND urge the mayor to cut the fat out of the city budget.

 Go to http://www.change.org/petitions/stop-the-transfer-tax-rate-increase to sign the “Stop the Transfer Tax Rate Increase” petition. Share the petition with your friends on Facebook, your e-mail contacts and Twitter followers, and invite them to join the campaign. Mobilize your social network!