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Thursday, April 09, 2009

Numbers and the Texas Housing Trust Fund

Since first posting on Senator Royce West's proposed legislation (SB 950) that would impose a small ($20 maximum) recording fee on all real estate transactions in Texas as a means of beefing up the state's Housing Trust Fund, I've received several inquiries and criticisms about the actual amount of revenue that the plan would produce.

My first post on the subject estimated $30 million annually to grow the fund that would benefit housing production for our poorest citizens. A number of people called my numbers "funny," inaccurate and flat bogus!

To clarify, the estimate is based on work from two sources.

First, the Texas Comptroller of Public Accounts provided the Legislative Budget Board the following estimates of new income to be collected from the proposed recording fee by budget years:

2010 $25,506,000
2011 $31,250,000
2012 $31,906,000
2013 $32,544,000
2014 $33,195,000

Second, the Texas Department of Housing and Community Affairs provided a more conservative estimate of what might be expected from the new plan. They determined that the state would realize approximately $24 million annually.

Take your pick. The impact of Senator West's solid plan will be substantial and would provide a relatively painless plan to grow this much needed fund.

Read more about this issue in the Op-Ed essay published by The Dallas Morning News last week.

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2 comments:

Anonymous said...

Larry,

According to your March 30, 2009 post:

The Texas Legislature will likely consider a positive and dramatic expansion of the state's Housing Trust Fund. Currently, Texas places a meagre $5.8 million annually into the fund. Now Senator Royce West and Representative Yvonne Davis have drafted bills that would establish a flat document recording fee of $10 on real estate transfer/sale documents. Such a fee would generate an estimated $30 million (conservative estimate) annually to the Housing Trust Fund.

Several people questioned the math. Your current message, above, indicates the fee is $20.

The interesting implication about any such fee on document filing is that it has nothing to do with the desire of the developer or owner of property being envisioned. The goal of any development deal is to serve the purposes of direct stakeholders. By imposing an unrelated goal of building a fund for persons unrelated to the project, the state is merely finding a convenient way to take money from one party and give it to another.

Why doesn't the state and its citizen allies in this issue simply and straightforwardly put the issue on the ballot, or use creative fundraising methods which encourages people to voluntarily give to the cause?

One person noted on the previously cited post that he would gladly give $10 to a needy family/person to assist them with housing. Fine. Good. Do it. (So would I, for that matter) But the principle at work here is that a few people who can not get a democratically based decision to support a cause, desire to attach a fee to the wants/needs of others who are simply going about their business.

Your numbers are changing and the method of collecting the funds both make me wary of such a proposal.

Larry James said...

Anon, thanks for posting. Further investigation revealed that most transaction include two "first pages" to close, thus, the $20 recording fee. Most people weren't questioning my fee amount, but the amount projected to be raised in this manner. Of course, you and I have a basic difference in philosophy. I would argue that all of us share a stake in the development of fit and affordable housing for low-income Texans. Most developers don't go that route. Lots of non-profit developers do, but need public assistance to make deals work. The Texas Legislature has not been inclined to fund the Housing Trust Fund at the levels necessary to make this a viable, sustainable source for development funds. A number of states have found the document recording fee to be a good tool to assure that such funds flow into the needed fund.