Is Warwick like the Hamptons?

Town brings in Long Island Realtors to discuss Community Preservation Act, By Linda Smith Hancharick Warwick - The Realtors from Suffolk County were disbelievers at one time. Like the Realtors here in Warwick today, they did not want a real estate transfer tax imposed in the late 1980s. But it was. The residents voted to take two percent of the sale price of each home or property and put it toward preservation. It was supposed to have a 10-year lifespan. Within three years, the voters renewed the legislation even longer. But this time around, many real estate agents were on board as well. They found that the preservation fund enhanced their properties, making them more attractive to buyers. That said, Town of Warwick Supervisor Michael Sweeton wanted to quell some concerns and fears in Warwick’s real estate community, and asked two Suffolk County real estate agents to come to Warwick and discuss the proposed legislation that will allow Warwick to impose a three-quarters of one percent transfer tax on most real estate transactions if voters approve it in November. He got a good turnout — the Town Hall meeting room was filled. But many still weren’t convinced. Katheryn DeClerck, a real estate agent with Century 21 Peck Realty, grew up in Southampton on Long Island. Graduating from the Southampton public school system, DeClerck has fond memories of her school. She graduated with just 120 kids and their school had amenities like a planetarium. Southampton certainly can afford such amenities, being one of the wealthier communities in New York. What is the connection between Southampton and Warwick? It certainly isn’t class size in school. Nor is it the property and school taxes to support it. DeClerck’s parents recently sold their home in Southampton for more than $800,000. It is an average size house — 2,200 square feet. Their combined village, town, county and school taxes total $3,500, certainly not what is common in Warwick. The people buying their home paid $12,000 toward the transfer tax. Here a house costing $800,000 would be paying about $22,000 in taxes, according to DeClerck. And the transfer tax, added to already high closing costs, could push people into buying homes in surrounding towns that do not have such a tax. “Taxes are already hurting the real estate market,” said DeClerck. “People are moving because they can’t afford the taxes anymore. I think this is a regressive, discriminating tax.” But those higher school taxes here in Warwick are one of the reasons people are in favor of this legislation. With more land not being developed, fewer kids will come into the school system, putting less of a burden on the district. DeClerck and other real estate professional, including Anthony Portelli of Raynor Country Realty, believe that just because this works on Long Island doesn’t mean it will work here in Warwick. “It is my opinion that the real estate transfer tax will have a negative impact on the real estate industry in Warwick,” said Portelli. “Buyers could find a home in any other town in Orange County and not have to pay this expensive non essential transfer tax.” He said buyers will negotiate and bring lower offers to sellers, hurting Warwick homeowners in the process. The real estate market in Warwick, he added, is very different from that in the Hamptons and should not be compared. Sweeton disagreed, as did the realtors from Long Island. “Warwick is not like Southampton, but Southampton was like Warwick at one time,” Sweeton said, quoting one of the Realtors. “If this tax was imposed earlier, Southampton could still be like Warwick.” Southampton is one of the communities in Suffolk County that has had a real estate transfer tax since the late 1980s. With certain exemptions, every piece of property sold brings in two percent of the selling price to the community to help preserve open space. Last July, the state legislature passed a law allowing the Town of Warwick to put a referendum to voters to do the same — although the tax imposed would be much less — three quarters of one percent. The money would go into a preservation fund, allowing the town to continue its Purchase of Development Rights program, started in 2000. Then, the town’s voters approved $9.5 million to buy development rights to farms and acquire other open space for the town. Now, the town would like to increase that program and is looking at the transfer tax as a tool to do it. Sweeton is a proponent of the fund. His feeling is that those already here have chipped in their share to preserve the quality of life here in Warwick. Newcomers should do the same. “People move here for our quality of life,” said Sweeton. “They can live elsewhere, but they want to come here because it is a special place. It is a combination of our downtown, our schools, our farms. This is all aimed at enhancing and protecting that.” This tax is not being imposed by the Town Board, Sweeton added. It will be decided by the voters. School taxes have continued to rise in Warwick and elsewhere. But the benefits are not immediate, Sweeton said. In the long run, there will be fewer houses built and, therefore, less kids in the school system. Warwick already has preserved about 2,000 buildable acres, according to Sweeton. Estimating four-acre zoning, that about 500 houses and 750 fewer kids in the district than if developments were built. At the time of the rezoning in 2000, there were 25,000 buildable acres. If the town adds 2,000 more protected acres, that will total about 20 percent of what was determined buildable in 2000. “In the context of a community,” Sweeton said, “I don’t thing that seems unreasonable.” DeClerck agrees there should be some way to preserve open space. She just doesn’t think it should be put on home buyers coming in to Warwick. “Something needs to be done,” she said. “And I’m not sure what the solution is. We just have to find a more creative way to do it. There are other choices besides a transfer tax. Let’s come up with them and give people a choice. Sometimes we have to think outside of the box.” Sweeton sees it differently. “This is another tool to help create a balance in the community between growth and open space,” he said. “If voters decide it is a bad tool, they will vote no. If they agree with it, they will approve it.”