Reader's Forum

Reader's Forum
A Closer Look at the Proposed Flip Tax

– By Robert Cypher –

At the end of my term on the City Council, Councilman Gerry Seitz proposed a real estate transfer tax, which he called the “flip” tax. His concern was that developers were building and buying houses on speculation, and “flipping “ them, making large short-term profits. The proposal was to tax all real estate transactions starting at 5% if a resale took place within a year of purchase, decreasing half a percentage point per year until the house remained in the same hands for 10 years. Properties sold for less than $700,000 would be exempt.

As we head into the budget season, I feel it is time this proposal is critically examined.

First, there is no empirical evidence that Rye has suffered an influx of speculators snapping up residential properties and reselling them for short-term gain. Rye has not suffered from the downturn in housing prices as much as other areas precisely because this city remains an attractive place to raise a family. Municipal services and government are efficient, the schools are highly regarded, recreational facilities are excellent, and there is a strong sense of neighborhood and volunteerism. These factors attract new residents, not speculators.

The proposed tax, however, would add a substantial cost to the purchase of a home. It would either discourage potential buyers, or, in the alternative, require the seller to lower his asking price to offset the tax. A home that sells for $1,000,000 would theoretically incur an additional tax liability of $50,000. That is not small change.

Secondly, the tax would create two classes of Rye citizens — those who have lived here longer than 10 years, and everyone else. Or it would bind people to their houses for 10 years. While serfdom has been abolished, this tax would create an economic disincentive for mobility, even within Rye itself. For example, what happens when someone wants to buy a larger house to accommodate a growing family? Or the reverse? The proposal, I fear, is discriminatory on its face, and would never survive a constitutional challenge.

Politically, this tax would be an extremely tough sell in the State Legislature. Assuming the City Council wanted to do this, it would require a home rule message be sent to the assembly and senate. It would take a great deal of convincing to get a major tax increase of this sort through the legislature, particularly the senate, where the majority is officially tax adverse.

People move for all kinds of reasons. Families get bigger and they get smaller. People get hired and make substantially more money, or they lose jobs. There are illnesses and deaths, marriages and divorces. It is certainly not the business of government to decide which reasons are more valid than others. Most Rye residents measure their net worth by the value of their homes. Anything that would adversely affect property values disproportionately would hurt our residents.

The genius of The American system has been the free and unfettered movement of goods and services. We have the most prosperous and upwardly mobile society in the world. In Rye, we all benefit from a strong housing market. When our neighbors do well, so do we. Although we have been affected by the downturn in housing prices, the effect in Rye has been milder than elsewhere.

This tax proposal, though, puts our advantage at risk. It is discriminatory, complex, invites government intrusion, will negatively affect property values, and divide our residents into separate classes. It therefore, should not be enacted.

Still Mourning the Loss of the A&P

– By Ken Knowles –

For over a year now, the City of Rye and its people have gone through what I’d call “grocery store denial.” While the A&P may not have been an essential part of living in Rye, it was an important component in the life of the city.

Many of us felt there would be some consequences to the A&P closing. Regrettably, no action has yet been taken to ameliorate the situation; but the City has created a Central Business District Task Force to consider ways to improve downtown. On Oct. 23, a City-hired consultant made a public presentation on the future of downtown. Among his findings, the consultant confirmed that most Rye residents would like to see the return of a supermarket. The meeting was well attended; it’s a positive first step.

When my wife and I arrived in Rye some 30 years ago, there were many different kinds of businesses downtown, including two hardware stores, two shoe repair shops, a Woolworth’s with a real soda/lunch counter and a men’s clothing store across the street. Most of the storeowners lived in the immediate area, and their presence enhanced the sense of community in our town.

The A&P was an integral part of Rye. It provided a place where people would stop and talk to their friends and neighbors while buying their groceries. The store also generated employment for the town. Now, it has been replaced with a small army of trucks and vans that dart around daily to the individual houses in the community. And, huge warehouse stores like Costco and the Super Stop and Shop stores have replaced the Rye A&P. Gone is that market atmosphere were you might run into a friend or neighbor on a regular basis.

“Economics,” as they say, is the culprit. A “super store” space of 200,000 square feet, with bulk racks and high ceilings, squeezes the operational costs down to such a low level that a conventional supermarket can’t compete. And, those small white vans carrying multiple grocery orders, that rush from house to house, eliminate the need to go grocery shopping. All of these developments are saving time and, more importantly, money.

My friends and I now talk about the little discount rewards we get by shopping at these behemoth stores. We talk about our purchases as weekly success stories: the variety meat pack that weighs eight pounds and feeds a family of eight, even though there are just two of us at home now; and the 24-pack of toilet paper that barely fits in the car. But, these cheaper prices come at a price: we no longer see our friends as often as we once did.

There is an A&P flourishing in Mamaroneck; in fact, I recognize one or two people as part of the old Rye A&P staff. So, it is possible to have supermarkets in the Sound Shore communities. Yes, it may be difficult to support a grocery store in Rye, but it’s worth the effort to see if one can be brought back.

There are many things that we can control in our community, and, alas, some we cannot. I believe we can do something about the loss of a sense of community because of the departure of businesses like grocery stores. Residents need to inform our government what they want. And, after the City studies and deliberates on the issue, we need to push for action.