BOSTON – A day before Boston Mayor Michelle Wu plans to sign a petition that would introduce a new tax on real estate sales in her city of $2 million or more to help fund affordable housing, Gov. Charlie Baker said , he doesn’t generally support these kinds of things.”
Wu’s plan, approved by Boston City Council on Wednesday, combines the transfer fee with an increase in the tax exemption for seniors and would only collect the new tax on the value of a property over $2 million, rather than the full amount.
As a Home Rule petition, it would have to be approved by the Legislature and Baker before it could go into effect. For years, communities have unsuccessfully proposed local transfer taxes on Beacon Hill.
“I don’t generally support things like this, and I particularly wonder why we’re doing this at a time when we have billions of dollars to spend on housing and the city of Boston has hundreds of millions of dollars to spend.” that they can spend on housing,” Baker said during an appearance on GBH’s Boston Public Radio.
The governor said the resources available under the American Rescue Plan Act and a “substantial” state surplus mean there are “a huge number” of dollars available to invest in housing initiatives.
In his proposal to spend the state’s ARPA money, Baker had requested $300 million for programs for first-time homebuyers and $250 million for downtown revitalization, including conversion of commercial space into residential units. The bill that lawmakers eventually passed included $65 million in homeownership support and included no money for downtown redevelopment.
Baker said it was “very unusual” for him not to support House Rules petitions backed by local officials.
“This is an exception,” he said.
Senate Speaker Karen Spilka said she didn’t know enough about Wu’s suggestion to take a stand but was surprised that Baker acted on it.
“I’m surprised he decided that or said that without seeing it. He usually doesn’t comment on bills until he sees them,” Spilka told the news service. “I don’t know what the language is, and I would definitely want to talk to Mayor Wu about it… So it’s premature for me to say anything about it, honestly.”
Baker proposed in 2019 levying an excise tax on real estate transfers to generate money to help cities and communities adapt to climate change. When asked how that attempt differed from what Boston officials are seeking, Baker said the amount of his increase was “dramatically different” — smaller — and it was “tied to an existing tax that hasn’t been collected since 1986.” “.
Boston is among several municipalities seeking the state’s permission to levy a real estate transfer tax on real estate sales within its borders.
Last month, the Revenue Committee approved local bills proposing transfer fees in Somerville (H 3938), Provincetown (H 3966), Concord (S 2437), Arlington (H 4295), Cambridge (H 4282), Nantucket (H 4201) and Chatham (H 4060), along with another version of a Boston bill (H 2942).
Bills that would allow communities that wish to waive property transfer taxes without having to go through the home rule process at Beacon Hill (H 1377, S 868) are pending the Housing Committee, which has set its deadline for consideration extended until May 9th.
Real estate officials, however, argue that it is making the cost even higher for buyers, pointing to the number of government programs that are focused on housing. Real estate officials have opposed for years property transfer tax laws that failed to gain sufficient traction in the Democrat-controlled legislature to become law.
Meanwhile, proponents of the transfer tax plans say existing programs haven’t stopped house prices from draining family housing budgets and the fee would generate millions to address the problem.
“Housing is health, safety and opportunity — and housing stability must be the foundation of our recovery from the pandemic,” Wu said when announcing her proposal in late January. “As housing costs become increasingly prohibitive for families, we must act urgently to keep families in their homes and build a city for all.”
Wu plans to sign the petition at a 10:30 a.m. Friday news conference at the Foley Senior Residence in Mattapan, where she will be joined by Rep. Brandy Fluker Oakley, Councilwoman and Senator Lydia Edwards, and Councilwoman Kendra Lara.
In testimony from the Boston City Council opposing Wu’s petition, the Greater Boston Real Estate Board described affordable housing as a “community-wide” responsibility that “should be paid for by the entire community,” rather than single-out homeowners and sellers, and said that the proposal “does not recognize that the real estate market is very sensitive to economic downturns”.
GBREB also joined the Massachusetts Association of Realtors in writing to lawmakers earlier this month, arguing that allowing a transfer tax would set a “dangerous precedent” and “violate principles of tax justice.”
The Local Option for Housing Affordability Coalition, which supports bills that would allow communities to opt for a property transfer tax, sent its own letter to Legislative leadership on Wednesday to counter the real estate groups and highlight that any community that introducing such a fee could set its own thresholds and exemptions.
“Many communities have housing problems that no current program can address,” the coalition wrote. “For example, public safety officials cannot afford to live in the communities they are sworn to protect, and teachers cannot live in the communities their students are raised in. In Boston, there are hundreds of luxury apartments in neighborhoods across the city that are vacant, owned only for investment, or flipped for profit.”