Real estate transfer tax heads to ballot

Vote pushed to next spring

Julie Ann Grimm | The New Mexican

6/25/2008 - 6/26/08

A battle royal is likely in store for the City Different, but not this summer. Santa Fe voters next spring will get a chance to decide whether to tax high-end home sales to help fund affordable-housing programs.

They can expect to be courted heavily for their votes as one of the city's most powerful industries mounts a campaign against the measure and advocates for a liberal public-housing policy put up a fight for sustainable funding for local programs.

The City Council voted unanimously late Wednesday night to approve a special municipal election on the first Tuesday in March on a real-estate transfer tax. An earlier proposal for an August election was rejected.

Mayor David Coss predicted the real estate industry will try to head off the proposal by convincing the state Legislature to block such a tax.

The tax would work like this: When a house is sold for more than $750,000, the buyer is responsible for paying a fee that represents 1 percent of any amount over $750,000. For example, a house sold for $800,000 would owe $500. Revenue would go to the city's Affordable Housing Trust Fund and would be earmarked to help increase home ownership among the city's work force and for other housing needs.

The original proposal, which was amended late Wednesday, had set the price threshold at $650,000.

Supporters say the tax is needed to curb the economic and social consequences of the migration of the city's workers to less-expensive nearby communities while earning wages in Santa Fe.

The Santa Fe Association of Realtors opposes the tax and, with the support of other industry groups, has already purchased newspaper and radio ads to push its position.

But not everyone who testified against the tax at the hearing is affiliated with the industry. Finance experts including Josh Gonze, a portfolio manager at Thornburg Investments, said consequences of the plan could include higher-end development outside the city limits.

Several real-estate brokers presented philosophical arguments, including Ashley Margetson, a broker with Sotheby's who said she was not speaking in a professional capacity. "Some people seem to think that since you have a $650,000 house, you owe it to your neighbor who does not have a $650,000 house to pay for his house," she said. "That is the basis of communism, and we don't live in a communist society. ... You cannot be free if you are obligated to pay someone else's way."

Likewise, not everyone from the real-estate industry opposed the tax. Independent broker Elise Noble waited until 10 p.m. to make her point to the council along with about 20 others who testified in favor of the tax. Noble said the advertising campaign against the tax is full of misinformation, calling it an example of "voodoo real estate."

"I will be happy and proud to explain to any buyer or seller that they are contributing to an affordable housing fund that will help those who work here and their children who want to live and work in their hometown," she said.

Others applauded the fact the decision will now be turned over to voters.

"I say put it up and don't be afraid of dividing the community," said Maggie Monroe-Cassel. "A community disagrees, but in disagreeing, we battle out some of the most important aspects of the community."



A special election is planned for March 3. The ballot will read:

"Shall the City of Santa Fe impose on a buyer an excise tax on the transfer of residential property in the amount of one percent (1%) of the portion of the purchase price in excess of $750,000 as the funding source for the Affordable Housing Trust Fund to be used exclusively for affordable workforce housing?"