Some blame transfer tax for dip in city home sales

percent] and the city government [2.5 percent].

Under legislation that council passed in December, the 2.5 percent city levy could rise to 3 percent in 2020 unless council members intervene. It should bring in nearly $30 million for the city in 2018, according to the Peduto administration. That’s up about 10 percent since 2016, city budget filings suggest.

The revenue is helping to enable the Housing Opportunity Fund — also known as an affordable housing trust fund — which is due to receive at least $10 million a year. The fund operates under the Urban Redevelopment Authority, which is set to introduce offerings such as new workforce housing and home-repair assistance for eligible residents.

Help could include closing-cost aid for first-time homebuyers. That would effectively ease their tax burden, Councilman R. Daniel Lavelle said. He advocated the transfer increase when council passed the measure in a 7-2 vote.

“There’s a huge difference between a correlation versus causation. I don’t think we’re in a position — nor are the Realtors — that they can say an increase in the realty transfer tax is the cause for the slip in sales,” Mr. Lavelle said.

He suggested that other factors may be at play, such as the available housing stock. He is “not yet concerned that we’ve done anything detrimental to the city,” Mr. Lavelle said, adding that he expects overall home values and prices to keep rising.

In that environment, the housing fund could pull home ownership within reach for more people, Mr. Lavelle said.

Separately, Mr. Lamb, the controller, has voiced concern over collections from the transfer tax. They were down some 25 percent for the first half of 2018, according to his office. The Peduto administration said three large, commercial transactions in early 2017 skewed year-to-year comparisons, and that revenue is picking up lately.

“I thought it was foolish for them to pass [the tax increase], and I think they should be giving serious thought to repealing it,” Mr. Lamb said.

Councilwoman Darlene Harris, who voted against the tax increase, said she may reintroduce the subject when council holds budget talks late this year.

“These are the repercussions from trying to tax people more,” Mrs. Harris said. “They’ll just leave.”