21 Nov SEPTEMBER REPORT – From the TAR Government Affairs Department
This Article was written By Nick Bokone, TAR Government Affairs Consultant
September Article, 2018 | September 10, 2018
Council Sends Measures for Affordable Housing to the Ballot
Town Council considered three proposals for Affordable Housing funding, ultimately deciding to send two to voters in November.
After lengthy testimony and debate at multiple meetings, Council eventually passed a motion, 4-3, to place a request for a mill levy on property that will appear on the municipal ballot Nov.6.
In addition, Council’s consideration of increasing sales tax earmarked for affordable housing that would ask for voter approval of a half-cent per dollar increase on current sales tax rates. Sales tax rates are currently 8.65 percent on retailers, 10.65 percent on restaurants, and 12.65 percent on hotels.
A third proposal, an excise tax on short term rental properties did not advance to the ballot. The short-term rental excise tax failed, with only two supporters — Geneva Shaunette and DeLanie Young — in support of the measure.
Telluride Fire District to Seek Mil Increase
Also this November, the Telluride Fire Protection District will ask voters to approve a mill levy increase and a freeze on the residential property tax rate in order to offset several years of decreases in funding for the fire district.
The proposal does two things. First, it will ask voters to approve a two-mill increase in the levy on residential property. Second, it will seek approval to “de-Gallagherize.” This means the fire district will ask to remove itself from the constraints of the Gallagher Amendment, a tax-related provision in the state constitution that has caused a drastic reduction in residential property tax revenue. As a consequence of de-Gallagherizing, the fire district’s residential assessment rate would be frozen at its current level of 7.2 percent.
Together with the mill rate, the residential assessment rate, or RAR, is used to calculate residential property tax rates, the primary source of funding for special districts like the TFPD. According to Bennett, a two-mill increase in the mill rate plus a freeze on the RAR would mean an increase of about $72 per $500,000 of a home’s value.
Let’s Go Colorado Officially Makes the November Ballot Statewide
Backers of Initiative 153 gathered enough signatures to place the measure on the fall ballot, Colorado Secretary of State Wayne Williams said Thursday. The measure — nicknamed “Let’s Go, Colorado” — would increase the state’s sales-and-use tax rate by 0.62 percentage points from 2.9 percent to 3.52 percent.
The Colorado Association of REALTORS® is supporting this measure, which would finance bonds for up to $6 billion for road and highway improvements, as well as transit projects. A cut of the money would go to local governments to use on their needs. If voters approve, 45 percent of the windfall would go to the Colorado Department of Transportation, local governments would get 40 percent and the rest would go to multimodal projects to reduce traffic congestion.
Williams’ office determined that supporters submitted 195,499 valid voter signatures, based on a review of a portion of the petitions submitted — well over the 98,492 needed to qualify for the ballot.
FHFA Ends Single Family Rental Program
On August 21, 2018, the Federal Housing Finance Agency (FHFA) announced that Fannie Mae and Freddie Mac (Enterprises) are ending their single-family rental pilot programs, stating that that the larger single-family rental investor market continues to perform successfully without the liquidity provided by the Enterprises. Moreover, the Enterprises will limit their participation in the single-family rental market to their prior investments over the past two years.
NAR has long opposed the Enterprises providing financial guarantees to large Wall Street investors, who can use their financial advantage and outbid homebuyers, which reduces the supply of affordable homes for Americans. The Enterprises’ single-family rental deals with Wall Street giants have clearly not advanced affordable homeownership.
NAR Meets with GAO to Discuss Fannie Mae and Freddy Mac
Near the end of the summer, staff from NAR’s Federal advocacy team met with analysts from the Government Accounting Office (GAO) to discuss the current state of Fannie Mae and Freddie Mac in conservatorship and its impact on the real estate market. This meeting was a follow up to a round of meetings that GAO held with NAR and other industry players in 2014 that resulted in a study.
NAR staff emphasized to the GAO that while not perfect, Fannie Mae and Freddie Mac have done a good job of providing steady, stable and affordable credit to a broad market during very difficult times. Furthermore, preserving the benefits of the current system should be a primary goal of any reform efforts in the coming years.
In addition to engaging with the GAO, NAR recently brought together a panel of industry experts to discuss the future of Fannie Mae and Freddie Mac. NAR will continue to actively engage in the discussion to protect the vibrant, national housing finance market.