Timing not right for real estate bills
Facing an economy that is still struggling, Rhode Islanders got some welcome positive news recently with word that home prices in March hit their highest levels since 2008. Professionals say that and other statistics indicate the market is on an upswing.
It was particularly notable, in that context, to see realtors rally at the State House this week in response to several legislative proposals they say would have a detrimental impact on that positive trend.
The bills would increase the real estate conveyance tax by 25 percent to subsidize rental housing, require all cesspools to be replaced within 12 months of a home transfer and change the definition of independent contractors such as brokers in a way that would make businesses subject to payroll taxes, disability insurance and other costs for those workers.
The response from the industry was swift and centered largely on the argument that the proposals represent an impediment to growth and an added burden for potential homeowners.
“Our legislators need to understand that we are just starting to recover from one of the worst housing downturns in decades and we’re still on shaky ground. Our inventory of homes for sale is extremely low. Adding more financial hurdles for sellers could stop the housing recovery in its track,” said Robert Martin, president of the Rhode Island Association of Realtors.
Nicholas Mattiello, the speaker of the state’s House of Representatives, appears cool to the proposals – a stance in keeping with his almost singular focus on fostering a business-friendly climate and creating jobs. Bruce Lane, broker owner of Williams & Stuart Real Estate with offices in Warwick, Cranston and Pawtuxet Village, was particularly pointed in his opposition.
“This is such a scary bill on such a fragile economy,” he said of the proposal on independent contractors, suggesting roughly half of the state’s 4,000 real estate brokers could lose their jobs if the bill is enacted.
The merits of the specific proposals clearly warrant further review and discussion. But their timing certainly appears poor.
Rhode Island continues to need every bit of help – and luck – it can get economically. A strong and stable housing market is an essential part of the equation, and it would be prudent for lawmakers to avoid any action that may impede or reserve the recent positive trends in that sector.