Surprise as Community Preservation Fund tax fails in Brookhaven

The defeat of Brookhaven's proposed 2 percent real estate transfer tax was the biggest surprise of an otherwise predictable Election 2007.

Usually overwhelmingly popular with homeowners, Island open space referendums have enjoyed a long run of success, including many lopsided victories at the polls.

But with the housing market on the skids and realtors spending more than $200,000 on a campaign to defeat Brookhaven's so-called Community Preservation Fund, the transfer tax had no chance. More than 61 percent of voters said no.

Listed on the ballot as Local Law 21, the measure would have created a town preservation fund for "protecting drinking water and preserving open space and farmland. " It would have supported the fund by taxing the value of transferred properties over $250,000. If a $260,000 property changed hands, in other words, $10,000 would be taxed, with the buyer paying up.

Brookhaven Town Board member Connie Kepert, a big CPF supporter, blamed the loss on the housing market malaise.

"I'm very surprised it went down," Kepert said. "We could have bought space for recreation, which is something we desperately need. "

Although the Brookhaven law was fashioned after a tax welcomed by voters in other East End towns, there were certain and important differences. East End property transfers have raised over $100 million for open space purchases.

But the lion's share of the money collected in East End towns has come from the sale of second and third homes, purchased by well-to-do buyers who couldn't care less about the relatively minor extra costs.

"Once it became a part of life, everyone got used to it," said Diane Saatchi, a vice president with The Corcoran Group in East Hampton. "It's increased property values. "

In a more middle-class environment like Brookhaven, where houses are mostly primary residences, the 2 percent tax - even though it would have exempted first-time homebuyers - was another obstacle to home ownership, according to Linda Bonarelli, president of the Long Island Board of Realtors.

"It's a phenomenal victory for the current and future residents of Brookhaven," Bonarelli said. "This was another tax burden that homeowners just don't need. "