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Allentown council adopts 0.5-point realty transfer tax increase to fund housing program
Summary
City Council adopted Bill 92, raising the realty transfer tax from 2.0% to 2.5% to create a dedicated housing fund for home repairs, blight remediation and owner-occupancy tools; sponsors estimate about $3.2 million annually and require annual plans and a five-year independent review.
City Council voted to adopt Bill 92, an ordinance amending the city’s Realty Transfer Tax Ordinance to raise the realty transfer tax by 0.5 percentage points — from 2.0% to 2.5% — with revenue directed to a dedicated housing fund administered by the Department of Community and Economic Development (CED).
Councilmember Napoli, who sponsored the measure, said the increase is intended to “level the playing field” for residents amid investor purchases of city housing stock. Napoli told council the city’s finance department found investors (LLCs and corporations) averaged about 48% of acquisitions over an 18-month review, and he estimated the 0.5-point increase could generate roughly $3.2 million annually. Napoli said the fund would be used for whole-home repairs for seniors and vulnerable residents, remediation of blighted properties, and tools such as deed restrictions and liens to encourage owner occupancy.
The ordinance names the housing fund as the revenue destination and requires the CED department to prepare an annual action plan reporting how funds will be used and an annual report documenting accomplishments. The ordinance also calls for an independent effectiveness review five years after adoption to inform whether the tax should continue.
Council members asked for clarification about how the new revenue would be reflected in the budget. City staff said the legislation directs revenues to the housing fund; administratively, council may need to amend the general fund budget at adoption to record the new revenue and then transfer it into the housing fund, and staff said they would consult with finance and the controller on the procedural steps.
A councilmember asked how the $3.2 million estimate was calculated. Napoli said the finance department based the projection on prior-year transaction data; he acknowledged collections would accumulate over time rather than being received as a lump sum.
Council approved the ordinance on final passage (recorded vote: 7 yeas, 0 nays). The ordinance will appear in the adopted city code and the council directed staff to prepare the budgetary amendments and reporting mechanisms described in the measure.
