A group of Berkshire REALTORS [President Steve Ray, Mary Tyer Kelly, Tom Doyle, George Cain, Anne Meczywor, Barbara Osborne, Maureen McFarland, Sue O’Brien and CEO Sandy Carroll] went to Boston this week, to meet with our legislators about issues affecting private property rights and home ownership in the Commonwealth and in Berkshire County. We supported three issues: Copper Pipe Theft Prevention, Land Use and Zoning Reforms, and Mortgage Forgiveness and Debt Relief. We opposed Local Imposition of Room Occupancy Tax, transfer taxes and mandatory home energy scoring before listing a home for sale. Here is a breakdown the issues critical to our industry, and what we told our legislators:
We Support Copper Pipe Theft Prevention:
As most REALTORS know, thieves target vacant homes and strip them of copper piping and wiring. The thefts negatively impact home values in the community and make the subject property likely ineligible for conventional mortgage financing. There are several pending bills that seek to eliminate the theft of scrap metal from homes by establishing a licensing structure for the sale of scrap metal. The licensing structure will provide law enforcement with ways to identify individuals who are selling the stolen metal to the scrap dealers. By giving the commonwealth access to, and the means for, the sharing of necessary information, the incentive to strip houses for metal will be greatly diminished.
Action: We asked our legislators to support both S. 202 and H. 226 and urge the Joint Committee on Consumer Protection and Professional Licensure to report the legislation out of committee favorably. The impact on our housing stock is significant. Good homes destroyed for greed and easy access to quick money. We also see many of the federal incentives to rebuild neighborhoods thwarted because homes are stripped and un-mortgageable by those home buyers who could live there, and instead a target for flippers. Let’s put a stop to this now.
We Support Land Use and Zoning Reforms:
Due to the short supply of housing in Massachusetts, potential homeowners continue to face increasing housing costs. One of the many issues driving the reduced housing stock is the presence of barriers to production, many of which are found in current zoning laws. Filed in conjunction with the Greater Boston Real Estate Board, S.119 The H.O.M.E. bill, seeks to make numerous changes to Massachusetts zoning laws. Below are some of the proposed changes to the law.
- The H.O.M.E. Bill promotes smart growth by requiring that cluster development be allowed by right in residential zoning districts, at the density permitted in the underlying zoning district. Additionally, these sections prohibit cities and towns from requiring a “proof permit” plan in connection with a cluster development application.
- The bill also promotes multifamily housing construction by requiring that cities and towns permit multifamily development by right on at least 1.5% of the community’s developable land area that is suitable for multifamily residential. This section would also establish a minimum density of 20 units per acre for by right multifamily development.
- Promotes affordable in-fill housing by requiring that accessory dwelling units (“ADUs”), sometimes referred to as in-law apartments, be permitted by right in all single-family residential zoning districts. These sections also prohibit zoning ordinances and by-laws from unreasonably regulating the location, dimensions, or design of an accessory dwelling unit on a lot.
The bill seeks to ease the burden on property owners to obtain dimensional relief for minor improvements by creating a two-tiered variance approach. Under this structure, the existing substantial hardship standard would apply only to use variances and a less burdensome practical difficulty standard would apply to all other variances.
- The bill replaces the supermajority vote requirements for variances and special permits with a simple majority standard. They also establish that the granting of a variance or the reversal of any order or decision of any administrative official would require a majority vote of the members of the board then in office.
- Creates consistent wetlands requirements by restoring uniformity across Massachusetts by prohibiting local wetlands requirements unless: (a) the local regulations are more restrictive than those established by state law; and (b) DEP approves the local regulations upon a finding that they are scientifically-based restrictions, are necessary to protect unusual local resources, and do not conflict with the State Wetlands Protection Act and DEP regulations.
- Creates consistent sewage disposal requirements by establishing a DEP review and approval process of local sewage disposal systems regulations to ensure they are scientifically-based restrictions, necessary to protect unusual local resources and do not conflict with Title V.
Action: We asked our legislator to the support S. 119 and urge the Joint Committee on Community Development and Small Business to report the legislation out of committee favorably. This will help build smart, build green, and develop tracts of land consistently in our region.
We Support Mortgage Forgiveness Debt Relief And Debt Cancellation:
The general tax rule that applies to debt forgiven during a short sale is that the amount forgiven, sometimes referred to as phantom income, is treated as taxable income to the borrower. This results in homeowners who are unable to afford their mortgages having to pay taxes on income they never received. This bill would allow homeowners to complete loan modifications, short sales and foreclosures for which they have debt forgiven without making them liable to pay state taxes on the that debt. This bill would mirror the federal law, the Mortgage Debt Relief Act of 2007, to allow taxpayers to apply for this exclusion on their state tax return as well.
Action: We lobbied and fought on a national level to not “kick them when they are down” – and to allow a bank to voluntary forgive a portion of a borrowers debt without the federal government treating that forgiveness as income. The people who are accepting a shortsale or involved in a foreclosure are the last to have the funds to pay a tax on money never received. We won that battle, but find Massachusetts is still trying to collect taxes on phantom income. We asked our legislators to support S. 1521 and urged the Joint Committee on Revue to report the legislation out of committee favorably.
We Oppose Local Imposition of Room Occupancy Tax:
Occupancy tax proposals promote the creation of a new tax on homeowners who choose to rent their homes for a short term. In addition to established businesses like hotels, motels and bed and breakfast establishments, these proposals would allow a city or town to levy a room occupancy tax on any apartment, single or multiple family housing, cottage, condominium or timeshare unit. Private homeowners or real estate agents would then be responsible for the collection, handling, and remittance of these taxes to the Department of Revenue. The bills generally authorize a municipality to assess additional taxes on homeowners who rent their homes for vacation purposes.
Action: We opposed this legislation as written. MAR has created a taskforce to study this issue in more depth and will try to develop an alternative that would support local businesses dealing with unfair competition of large developments operating as defacto revolving hotel rooms, while protecting and preserving the homeowners property rights. We conveyed the impact of this legislation on Berkshire homeowners who are able to meet their annual financial obligations due to the summer rentals to incoming artists and musicians. We also oppose any legislation that would require REALTORS to collect, report and disburse taxes.
We Oppose Real Estate Transfer Taxes
Transfer taxes authorize the creation of a new transfer tax on the sale of property in a city or town. Such taxes would create an entrance or exit fee to homeownership and would therefore have serious implications for the Massachusetts economy. These taxes single out home buyers and sellers and raise the bottom line price of many homes by thousands of dollars. This legislation would authorize the creation of a new transfer tax on the sale of property in a municipality. Massachusetts communities facing budgetary deficiencies could then seek transfer tax authority to solve local revenue problems.
Action: As we have for the past several years, we asked our legislator to oppose transfer tax legislation. Many refer this as the “exit tax” and sets and unfair burden on the homeownership process. Taxes levied should be relative to the services they provide – to make homeowners, who already pay property and utility taxes also pay taxes to support the whole community when they buy / sell their home is unfair.
We Oppose Mandatory Energy Scoring
Mandatory energy audits at or prior to the transfer of property can disrupt sales and therefore have a negative impact on the Massachusetts housing economy. Additionally, requiring energy efficiency scoring on homes in Massachusetts will stigmatize older homes causing a substantial decline in value. This bill seeks to require sellers or their agents to perform a Mass Save energy audit prior to listing a home for sale and disclose to any prospective buyer the information in the energy audit at the time of the listing. Additionally, the bill commissions the design and implementation of an energy scoring and labeling system.
Action: We asked our legislators to oppose this legislation. We understand the spirit behind the bill and are supportive of incentive ways to promote energy efficiency. We also shared how Realtors currently educate buyers on the MassSave program and promote energy features of homes for sale in marketing and MLS searches. While the goal is universal, we cannot support a requirement that a seller must get a score before listing their house for sale. It’s a punitive measure that could stigmatize properties, slow the home sale process and tax already burdened MassSave resources. We offered to work with Senator Ben Downing to find a resolution to the issue that is proactive and positive for ALL homeowners, not a punitive measure against sellers.