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Housing Action Alert – Take Action to Support Affordable Housing and Open Space
Kathy Kregor
Legislative Advocacy Network
Action Needed : Calls or E mails to your state senator in support of SB 445, Reforming Illinois’ Real Estate Transfer Tax, which provides funding for the Affordable Housing Trust Fund, the Open Space Lands Acquisition and Development Fund, and the Natural Areas Acquisition Fund. A reformed Real Estate Transfer Tax (RETT) would generate an estimated $215 million with $99 million in new funding for affordable housing, open space, and conservation efforts. The Senate must act on SB 445 by March 30 or the bill dies. It is facing strong opposition from the Illinois Association of Realtors and others, so your action is needed now.
Background
- Statewide, more than 250,000 renter households pay more than half their income for housing, leaving too little for other basic necessities. For every new affordable housing unit built, two are lost to demolition, conversion or abandonment. More than 26,000 households a year are homeless in state-funded shelters.
- Illinois ranks 48th in the nation in public open space per capita. Only 3.6% of Illinois land is in public ownership for natural resource protection and enjoyment. Illinois is losing more than 130 acres a day to development. Without funding for land acquisition and protection, opportunities for habitat preservation and recreation will be lost forever.
The Proposal
The reformed tax would increase the rate for higher-end properties while providing a tax reduction to 93% of all property transactions statewide through a tax cut on the sale of properties priced less than $500,000. Currently, the state RETT is $.50 per $500 of property sale value. The revised structure would provide a 20% tax cut to sellers of properties priced up to $500,000 (from $.50 to $.40).
Properties priced over $500,000 would pay the reduced tax rate of $.40 per $500 (.08%) for the first $500,000 in value of the property. Value over $500,000 would be taxed additionally according to the following rate structure:
- Incremental value between $500,000 and $1 million would be taxed at $1.50 per $500 (0.3%)
- Incremental value between $1 million and $3 million would be taxed at $3.50 per $500 (0.7%)
- Incremental value over $3 million would be taxed at $5.00 per $500 (1.0%)
Under current law, the new money would be allocated as follows:
- An additional $49.5 million for the Affordable Housing Trust Fund
- An additional $34.6 million for the Open Space Lands Acquisition and Development Fund
- An additional $14.9 million for the Natural Areas Acquisition Fund
Catholic Social Teaching challenges us to make the needs of the poor in our communities a priority and to care for God’s creation. The increased funds could be used to assist in these areas in the following ways.
- Expand cost-effective supportive housing programs through a 20% set aside. Supportive housing provides those who are homeless or have special needs with permanent affordable housing and support services.
- Preserve existing affordable housing. Approximately 39,000 subsidized housing units are at risk of loss within the next five years.
- Restore important ecosystems. High-quality natural communities, which provide a healthy and diverse habitat for wildlife and endangered species, need protection.
- Increase flood management and water quality. Wetlands and open spaces absorb water during rainfall and so naturally reduce flooding and preserve water quality during storms.
Use the link below to contact your senator and ask that he/she support SB 445, Reforming Illinois’ Real Estate Transfer Tax in order to provide more funding for affordable housing and open space needs.
The legislation was developed by the Open Doors, Open Lands Campaign to increase funding for affordable housing and open space.
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