A proposed increase to the real estate transfer fee is good news for the homeless in Rhode Island. That’s because the new revenue will benefit a rental voucher program that helps keep people off the streets.
“We are thrilled that the House Finance Committee ensured that this year’s budget invests in the long-term solutions to addressing homelessness and the lack of affordable housing in our state,” said Jim Ryczek, executive director of the Rhode Island Coalition for the Homeless. “Through a very modest increase to the fee paid in real estate transactions, the state is creating an ongoing, dedicated funding stream to fund the housing rental subsidy program and homeless prevention assistance and housing retention assistance programs.”
The real estate transfer fee is increasing from $2 per $500 of real estate to $2.30 per $500, said House spokesman Larry Berman, with new revenue going to benefit lead paint abatement programs, “shelter operations” and the rental voucher program. (Real estate sold for $200,000 owes $800 in fees currently, under the proposed structure it would owe $920)
Here’s the section from the House Finance Committee’s budget overview (section 28, p. 18):
The House Finance Committee recommends increasing the real estate conveyance tax from $2.00 to $2.30 per $500 or fractional part is paid for the purchase of property conveyed for more than $100. This is estimated to generate an additional $2.8 million. These funds will be used for the lead hazard reduction abatement program, shelter operations and rental housing subsidies, which are administered by the Housing Resources Commission. The recommended budget includes $2.5 million from general revenues for these expenses. The House Finance Committee includes $2.8 million from new receipts, to offset the loss of general revenues. This provides an overall increase of $0.3 million.
“The Massachusetts tax is $2.26 per $500, so Rhode Island will be only 4 cents higher,” said Berman. “But in Massachusetts, local communities are allowed to add on their own tax. For example the Martha’s Vineyard Land Trust has a tax on all the towns on the Vineyard. The Governor cut these two programs in his budget, so the Assembly is restoring them with this tax, which will then be dedicated to these programs so they will not be cut in the future.”
Added Ryczek: “This funding model builds on last year’s budget that funded rental vouchers for Rhode Islanders experiencing homelessness, and more importantly, it ensures that the state is investing in a long-term, strategic and proven approach to solving the homeless problem in our state. More than 125 Rhode Islanders will move from homelessness to stable housing because of the leadership by the General Assembly in last year’s legislative session. It is encouraging that House Finance is continuing its commitment to our most vulnerable Rhode Islanders experiencing homelessness and housing insecurity.”