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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Showing posts with label Texas Housing Trust Fund. Show all posts
Showing posts with label Texas Housing Trust Fund. Show all posts
Thursday, April 09, 2009
Monday, March 30, 2009
Housing Trust Fund for Texas--new hope!
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.
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.
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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.
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Tuesday, March 17, 2009
URGENT ACTION NEEDED NOW!!!
Texas Senate Bill 950 put forward by Senator Royce West in this session of the Texas Legislature expands funding for affordable housing development in our state. During this time of economic crisis, this bill will help struggling Texans obtain a safe, decent, affordable place to live. It will also stimulate the economy by creating home construction jobs and encouraging other public and private investment in affordable housing.
Here's the brilliant part: The bill establishes a flat $10 "document recording fee" on real estate documents that will generate an estimated $40 million per year for housing programs that serve low-income Texas families. These funds will go into the Housing Trust Fund (currently funded at just $5 million annually) and establish a stable and reliable source of funding for the development of affordable homes.
Here's the urgent part: SB 950 will be heard in the Senate Intergovernmental Relations Committee TOMORROW - Wednesday, March 18th at 9:30 am or upon final adjournment of the Senate in Room E1.028.
Here's the action part: If you are in or around the Capitol Wednesday morning or afternoon, please put a card in support of SB 950. If you or your organization is located in a committee member’s district (Senate Intergovernmental Relations Committee, please call that member encourage their support of SB 950 NOW!
Committee members include: Vice Chair, Senator Robert Nichols (512-463-0103, representing (Conroe Nacogdoches, Anderson, Angelina, Cherokee, Hardin, Henderson, Jasper, Montgomery, Newton, Polk, Sabine, San Augustine, San Jacinto, Shelby, Smith, Tyler)
Senator Mario Gallegos, Jr. (512-463-0106, Houston--Harris County)
Senator Dan Patrick (512-463-0107, Houston, Katy, Tomball, Humble--Harris County)
Senator Jeff Wentworth (512-463-0125, San Antonio, Kyle, Dripping Springs, Austin--Bexar, Comal, Guadalupe, Hays, Kendall, Travis Counties)
When you call, here's what to say:
· Introduce yourself and your organization
· If true, highlight that your organization serves the Senator’s constituents or, if true, highlight the fact that you are one of the Senator's constiuents.
· State that SB 950 will be heard in Senate IGR on Wednesday the 18th
· Encourage the Senator’s support of SB 950 and urge them to vote in favor of the the bill in committee
· Thank the staffer to whom you talk for their time and for passing this message along to the Senator
Please act now!
For more details on this important legislation, contact me at ljames@CentralDallasMinistries.org or visit http://www.tdhca.state.tx.us/housing-center/docs/08-SLIHP.pdf for more information.
Thank you, Senator West!
Here's the brilliant part: The bill establishes a flat $10 "document recording fee" on real estate documents that will generate an estimated $40 million per year for housing programs that serve low-income Texas families. These funds will go into the Housing Trust Fund (currently funded at just $5 million annually) and establish a stable and reliable source of funding for the development of affordable homes.
Here's the urgent part: SB 950 will be heard in the Senate Intergovernmental Relations Committee TOMORROW - Wednesday, March 18th at 9:30 am or upon final adjournment of the Senate in Room E1.028.
Here's the action part: If you are in or around the Capitol Wednesday morning or afternoon, please put a card in support of SB 950. If you or your organization is located in a committee member’s district (Senate Intergovernmental Relations Committee, please call that member encourage their support of SB 950 NOW!
Committee members include: Vice Chair, Senator Robert Nichols (512-463-0103, representing (Conroe Nacogdoches, Anderson, Angelina, Cherokee, Hardin, Henderson, Jasper, Montgomery, Newton, Polk, Sabine, San Augustine, San Jacinto, Shelby, Smith, Tyler)
Senator Mario Gallegos, Jr. (512-463-0106, Houston--Harris County)
Senator Dan Patrick (512-463-0107, Houston, Katy, Tomball, Humble--Harris County)
Senator Jeff Wentworth (512-463-0125, San Antonio, Kyle, Dripping Springs, Austin--Bexar, Comal, Guadalupe, Hays, Kendall, Travis Counties)
When you call, here's what to say:
· Introduce yourself and your organization
· If true, highlight that your organization serves the Senator’s constituents or, if true, highlight the fact that you are one of the Senator's constiuents.
· State that SB 950 will be heard in Senate IGR on Wednesday the 18th
· Encourage the Senator’s support of SB 950 and urge them to vote in favor of the the bill in committee
· Thank the staffer to whom you talk for their time and for passing this message along to the Senator
Please act now!
For more details on this important legislation, contact me at ljames@CentralDallasMinistries.org or visit http://www.tdhca.state.tx.us/housing-center/docs/08-SLIHP.pdf for more information.
Thank you, Senator West!
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