STEPHEN RYAN
Bad tax policy

Transfer tax bills that the Massachusetts Association of Realtors says would discriminate against homebuyers and sellers and reforms that could create statewide codes for wetlands and septic regulations are among the legislation that MAR members will focus on during the 21st annual Realtor Day on Beacon Hill next Monday.

MAR members will oppose two pieces of legislation that would allow Martha’s Vineyard and Nantucket to create new transfer taxes. The Martha’s Vineyard bill would create a new 1 percent transfer tax on homes that are sold for more than $750,000. The tax would be paid by sellers, and would be in addition to an existing 2 percent transfer tax on homebuyers in Dukes County.

The Nantucket bill, which is similar, would create the transfer tax to fund the construction of a wastewater treatment facility for the island.

The bills are bad tax policy, according to Stephen Ryan, MAR’s director of government affairs/general counsel. The taxes would target home sellers instead of the public as a whole.

“It’s more a question about the equity situation,” he said.

The Martha’s Vineyard bill, in particular, is bad policy because it would create a sales tax on some people’s homes to make others more affordable, Ryan said.

“However well-intentioned, MAR believes that this form of taxation is fundamentally inequitable and an unstable source of revenue, by placing the burden on homebuyers and sellers,” according to MAR documents

There are other ways to fund affordable housing, the association points out, such as the Community Preservation Act.

No transfer tax bills passed in last year’s legislative session, and the Nantucket and Martha’s Vineyard bills are the only ones in play this year, according to David Wluka, president of MAR.

‘An Uphill Battle’
Representatives of MAR also will speak to state legislators about a study by the Pioneer Institute that showed overregulation on the part of municipalities is the reason for Massachusetts’ lack of affordable housing. Realtors will argue the proposed bills that would establish statewide codes for septic and wetlands issues would be a step toward fixing the problem.

The wetlands bills would authorize local conservation commissions to administer and enforce locally adopted wetlands ordinances or bylaws only if it is more stringent than the state Wetlands Protection Act, and only if the Massachusetts Department of Environmental Protection reviews and approves it.

The DEP review would be conducted to ensure that local wetlands ordinances are scientifically based and intended to protect resources, rather than duplicates of existing state laws or bylaws that would needlessly charge local wetlands fees on top of the fees charged through the state Wetlands Protection Act.

The septic-related bill, the Title 5 Uniform Code, would create uniform septic regulations for all communities in Massachusetts. They would be similar to the state plumbing and electrical codes. The bill is intended to ensure that septic regulations are not used for zoning or setting minimum lot sizes.

“MAR’s position on this issue is consistent with a comprehensive analysis of housing issues by the Department of Housing and Community Development, which specifically identified local septic rules as an inappropriate tool used by communities to stop needed housing construction,” according to MAR.

Up until now, there has been only anecdotal evidence that local controls aggravated the affordable housing crisis in Massachusetts. But the Pioneer Institute study changes that.

“We now have statistical, hard evidence,” Wluka said.

“Both of these laws are designed to protect the environment, not control growth,” Wluka said.

This may be one of the most difficult battles for Realtors to wage. Municipalities do not like to give up or restrict their ability to pass laws, and home rule is a New England tradition.

“It really is an uphill battle for us,” Wluka said.

The Pioneer Institute points out that challenges to housing development in the state are rooted in local decisions, Ryan said.

“Every house that doesn’t get built creates additional pressure on the [market],” he said.

Realtors also will be addressing an issue that, on the surface, is not a topic that would normally concern MAR. They are, however, supporting a bill that would make it more difficult to obtain some key ingredients for the cooking of methamphetamine.

The issue is of concern to Realtors because the process of cooking methamphetamine is often done in houses or apartments, and can create toxic waste that can result in residences becoming condemned.

According to MAR, “During the production process, harmful chemical residues are produced that can remain on household surfaces for years. According to the Office of National Drug Policy, the production of 1 pound of methamphetamine creates 5 to 7 pounds of toxic waste and releases poisonous gas into the atmosphere. Lab operators tend to dump that toxic waste in household drains or yards. Cleaning those properties can be very costly and time-consuming. The hazardous waste and its associated stigma also can have serious ramifications on the value of the subject property, not to mention the values of surrounding properties and neighborhoods.”

The problem has not become out of control in Massachusetts, but legislators and the Realtors who support the bill are taking cues from states where it has become a major problem. There are cases in states like Louisiana and Mississippi where homes have been torn down. Meth labs in apartment buildings can be particularly troublesome, as a lab in one unit can get an entire building condemned.

“Meth labs make a house uninhabitable,” Wluka said. “It is very much a real estate issue.”

Supporters hope the bill would help Massachusetts avoid such problems by cutting them off at the source. The bill would regulate the sale and possession of any compound containing a detectable quantity of pseudoephedrine – a key ingredient in methamphetamines – by requiring distribution by a licensed pharmacist. It exempts liquid forms and authorizes the commissioner of public health to exempt other products if they are not used in the illegal manufacture of methamphetamine or other controlled substances, according to MAR.

“We want to avoid the problems that many Midwestern states have already faced,” Ryan said.

MAR representatives also will tell legislators of their support for a bill that would expedite the commercial permitting process in the state. It would make changes to Chapter 43D, which was created in 2004 in response to concerns about the length and complexities of the permitting process. No communities, however, have used the program because of a lack of incentives, according to MAR.

The legislation would provide incentives and technical resources to try to convince communities to participate. It also would create a new permit regulatory office that would help new businesses or existing businesses looking to expand in the state. The bill would make changes to the appeals process, as well, by estabilishing a new division of the Trial Court that would focus on land use and environmental appeals exclusively.

In addition, MAR will speak out against a land-use reform bill, which would make it more difficult to create housing and other development, according to MAR.

“Rather than addressing the complicated, time-consuming and fragmented process by which development is currently regulated in Massachusetts, the proposed act seeks to ‘reform’ the few limited protections that the present system of land-use regulation in the commonwealth offers to property owners,” according to the association. MAR is in favor of changes, because its members say Chapter 40A does not work, but the proposed bill is a step in the wrong direction, Ryan said.