Private Transfer fees have been something of a hot topic in the real estate community of late and something that has many professionals in the industry in opposite corners. This week, former Secretary of the Department of Housing and Urban Development, Henry Cisneros, weighed in with his support for private transfer fees in a letter to the Federal Housing Finance Agency.In his letter, Mr. Cisneros stated defended private transfer fees on real estate saying “developers use private transfer fees to apportion infrastructure costs over time, instead of forcing the burden entirely onto the shoulders of initial buyers.” He explained “by recovering infrastructure costs over time, instead of embedding the costs within the sales price, home ownership becomes more affordable, and projects become viable.”
After challenging the claims that transfer fees are hidden, restrain alienation, and are distributed to unrelated third parties, Mr. Cisneros went on to conclude, “The reality is that private transfer fees have the potential to help fund infrastructure, reduce negative equity, make home ownership more affordable, and create jobs, while also funding important societal goals such as affordable housing. I urge policymakers to adopt disclosure legislation that allows the responsible use of this important private sector funding tool while helping to ensure a fully informed consumer.”
I should probably point out the Cisneros wrote this letter in his new capacity as Executive Chairman of CityView, a company that, according to it’s website, “provides institutional capital to make equity or structured debt investments in innovative urban projects..”
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