Case Study: Peconic Watershed
Building Community Support for a Real Estate Transfer Tax in the Peconic Watershed
Since 1993, the Peconic Estuary Program has conducted extensive public involvement and outreach in its watershed. The outcome of this work has been strong partnerships with organizations and individuals in their community. Community based support was crucial to the establishment of a two percent (2%) real estate transfer tax dedicated to conserving land and other related purposes, including historic preservation. Real estate transfer taxes are assessments made by states or local governments on real estate transfers based on the sale price of the property and paid by the buyer of the property.
Implementing the real estate transfer tax required three major steps. First, the New York Legislature needed to pass enabling legislation. State- and national-level real estate and builder lobbies opposed the real estate transfer tax and delayed passage of the enabling legislation for more than a decade. In 1998, the New York Legislature finally voted to allow Long Island's five east end towns to hold referenda on establishing a real estate transfer tax. Second, each town developed a Community Preservation Plan to identify priority parcels for acquisition and easements. Third, each town needed to pass local referenda to approve the tax. Again, real estate and builder lobbies opposed the referenda and spent $300,000 to fight its passage. Despite their efforts, all the towns successfully gained voter approval, passing with at least a 60% majority.
A large community-based coalition including the Committee for the East End Community Preservation Fund, Peconic Estuary Program, Suffolk County, five towns, local businesses, realtors, and builders, citizens and others presented a compelling case to voters that preserving open space would protect estuarine resources, groundwater quality, and the character of Long Island's East End. This case was based in part on studies done by the Peconic Estuary Program, including an economic valuation of the estuary and its impact on the local economy, detailed information of current land use, and projections of development and population trends. Together, they were able to rally support for the enabling legislation and the referenda.
The 2% Real Estate Transfer Tax is the most successful land protection program on Long Island, raising over $169 million through January 2004. Using an average of 2% tax revenues and multiplying it through the life of the fund (end of 2020), total additional revenue should be approximately $556 million.
While many critical landscapes have been protected with funds from the 2% real estate transfer tax and other sources, current land acquisition funding is not sufficient to keep up with development rates. It is estimated that less than 10% of the parcels identified as critical in the Peconic watershed could be protected with future 2% tax revenues. Fortunately, large amounts of land can be protected through means other than land acquisition, for example: clearing restrictions, clustering requirements, rezoning, overlay districts, easements, purchase of development rights, and overall better land use practices. It is estimated that the implementation of clearing restrictions and clustering requirements would protect an additional 3,491 acres in the Peconic watershed; acquiring an equivalent amount of land would cost an estimated $382 million.