The Housing Trust Fund makes funding available for the development of much needed affordable housing for low-income families in Texas. Those of us who work in the field of affordable housing recognize the pressing need for these funds and, even more, for the creation of a steady, sustainable stream of funding for this important purpose.
Unfortunately and, in my view, inexplicably, Texas realtors oppose even this small fee increase that would fund this important work. Housing Texas provided the following page of "myth and fact" about the pending legislation relative to this important issue.
Review what follows and then contact your state senator and representative to express your support for the legislation:
THE HOUSING TRUST FUND--REALTORS’ ARGUMENTS: MYTH AND FACT
Myth: The Housing Trust Fund bills before the Texas Legislature (S.B. 950 and H.B. 3163)
will create a “real estate transfer tax” on home sales.
Fact: S.B. 950 and H.B. 3163 will establish a flat document recording fee of just $10 on the first page of real estate documents. THIS IS NOT A TAX.
Myth: The proposed document recording fee will add to the cost of housing, and keep low income families from affording homes.
Fact: A $10 fee is minor compared to thousands of dollars in existing fees on real estate
transactions. It should not be the determining factor in whether a family can afford a home.
When compared to the average realtors’ fees on a home sale, $10 is minuscule. (If it is enough to make our break a home sale for a family, they clearly are not financially prepared to purchase a home.) The average real estate agent commission on the sale of a $200,000 home is $10,000 (based on a 5% commission rate). In addition, “administrative” fees and another $3,975 in title and closing costs bring total fees on the transaction to over $14,000.23.
Myth: The Housing Trust Fund is bad for realtors’ business.
Fact: Not only is the Housing Trust Funds a major economic stimulant that spurs additional private investment, adds to the tax base and creates local jobs, but it is actually good for realtors’ business. If funded at $30 million per year, the Housing Trust Fund could provide home buyer assistance to 3,000 households who otherwise may not be in the market to buy a home. Assuming the homes are resold every even years, realtors could generate over $64 million in realtors’ commissions over the next 30 years. This figure is based on the statewide, average loan of $108,231 for homes purchased under the home buyer assistance program, not factoring in likely home appreciation.
With $30 million per year, the Trust Fund could provide owner occupied home repair to 1,000 households, elevating the value of these homes by an average of 250 percent. Assuming a modest initial home value of $60,000, values would be increased by $90,000, or a total increase of $90 million for all homes repaired with Housing Trust Fund dollars. In resale, this would represent $4.5 million in realtors’ commissions.
Myth: Realtors are always opposed to generating revenue for housing trust funds from the real estate industry.
Fact: Individual realtors have endorsed the Texas Housing Trust Fund Campaign and housing trust fund campaigns in other states.