Greater Lehigh Valley REALTORS: Referendum question to be decided by Allentown voters

Tricky Referendum Question to be Decided by Allentown Voters this Election

By: Government Affairs Director Asher Schiavone, Greater Lehigh Valley REALTORS®

"Shall Section 807(B), Revenue, of the Home Rule Charter of the City of Allentown be amended to allow City Council, by Ordinance, to remove the Deed Transfer Tax?"

The above referendum question is as clear as mud.

The Greater Lehigh Valley REALTORS®, a professional trade association that represents 3,000+ REALTORS® working for you in the Lehigh Valley, urge you to vote NO on this referendum when you receive your mail-in ballot or when you vote in-person on November 5th.

Vote NO if:

The City of Allentown is essentially asking voters to remove the cap from the Deed Transfer Tax, which is assessed at closing when property in the City of Allentown is bought or sold. There is a desire from members of the Administration and City Council to increase this tax, which would significantly drive up the price of every property bought, sold, or rented.

The total Deed Transfer Tax in the City of Allentown is 2% (1% State, .5% City of Allentown, .5% Allentown School District) of the property's sale price. If you look at the graph provided to City Council by Allentown's Finance Director, there are revenue projections based on increasing the tax from 2% to 5%. Based on the median sales price of $250,000 in the City of Allentown, this increase would raise the total closing costs by $7,500. This amount is typically split between the buyer and seller. In the case of an investor buying the property, they are likely to pass on these costs to tenants of residential and commercial units by increasing rent. Some Allentown officials have publicly advocated for a .5% increase to the tax, but beware, other municipalities have phased in seemingly small increases until they reach a rate of 5%.

How is increasing the cost of homeownership, especially for low-to-moderate income individuals, helping to make housing more affordable? The answer – it isn't.

This referendum question has been on the ballot in one form or another 3 times within the last 22 years - 84% Opposed (2002), 67% Opposed (2004), and 70% Opposed (2005). In each of the referendums, the word "increase" was included as part of the question. There is, however, no mention of a potential increase in the referendum above.

We have no problem with municipalities proposing referendum questions to voters, however, you have a right to know exactly what you are voting for this election. The wording of this referendum lacks important context that was included in prior referendums. The Plain English Statement approved by the Lehigh County Board of Elections, which is supposed to clear up confusion, could go unseen by many.

Allentown voters have historically voted against a self-imposed tax increase. A vote of NO on this referendum would keep this tax capped and prevent you from handing Allentown a blank check because – and this is the real secret – there is no plan for how your money would be spent.