TWO CRISES are bearing down on our state. There’s the critical shortage of affordable housing, which leaves ever more of our neighbors unable to keep a roof over their heads. And there is the climate crisis, which promises more powerful storms, flooding, and deadly heat waves.
These crises demand urgent action. Now, a diverse coalition of housing, environmental, and faith-based organizations has come up with a plan to tackle both at once. The HERO Coalition urges the Massachusetts Legislature to raise the deeds excise tax — paid when real estate changes hands — to a level comparable with other Northeastern states. This could generate as much as $600 million annually for investments in climate and affordable housing.
The need for these investments is clear. Our shortage of affordable housing – already dire before the pandemic – has grown even worse. Renting an average two-bedroom apartment in Massachusetts now requires an income of $35.52 per hour – so a couple working two full-time, minimum-wage jobs would still fall short. Hundreds of thousands of families have missed rent or mortgage payments due to the pandemic, and thousands more face eviction.
To be sure, the Commonwealth has taken important steps to address the housing crisis — with state-funded public housing, rental assistance, a low-income housing tax credit, and newly enacted improvements to our zoning laws. But these measures are overtaken by the growing scale of need. Less than a third of those who qualify for housing assistance in Massachusetts actually receive it. Most of our state’s lowest-income residents bear crushing rent burdens, often forgoing food, healthcare, and other necessities just to remain housed.
Meanwhile, the climate crisis poses an existential threat to our state – and our future. The world’s scientists say we are running out of time to bend the curve of greenhouse gas emissions and prevent catastrophic warming. Climate change is already harming our region, with fast-rising sea levels and dangerous heat waves, among other impacts. More than 15 percent of properties in Massachusetts are at risk of flooding over the next 30 years. Boston, with the highest number of flood-prone properties, will see a 45 percent increase in flood risk by 2050.
The housing and climate crises converge, especially in our state’s lower income communities with particularly negative impacts on households of color that have been denied equitable access to housing and economic opportunity. For example, Boston’s Dorchester neighborhood faces an acute housing shortage. In recent years, an influx of highly paid workers has sent rents skyward, driving out long-term residents.
At the same time, the legacy of racist zoning practices increases vulnerability to climate impacts. Beginning in the 1930s, the federal Home Owner’s Loan Corporation drew red lines around Black neighborhoods on urban maps, deeming those areas unfit for investment. Formerly “redlined” neighborhoods — including parts of Dorchester – still bear the scars of discrimination. Often in low-lying areas with poor infrastructure, they are 25 percent more likely to be flooded than their whiter, wealthier counterparts. And, lacking tree cover and parks, formerly redlined neighborhoods are hotter than their non-redlined neighbors 94 percent of the time.
In Dorchester and across the state, rising rents and rising temperatures compound residents’ challenges. But as the problems converge, the solutions can, too.
Today, we must reduce greenhouse gas emissions from our buildings while protecting homes and neighborhoods from flooding and other climate risks. And we must do this while making housing more affordable, not less. The HERO Act brings these solutions together into one bill.
The HERO Coalition urges the Massachusetts Legislature to double the deeds excise tax from $4.56 to $9.12 per $1,000 in sales price. This would bring us in line with neighboring states: New Hampshire’s tax is a whopping $15 per $1,000; in New York and Vermont it is $12.50. HERO would generate as much as $600 million in new revenue each year.
Half of the new revenue would go to affordable housing programs — the Affordable Housing Trust Fund and the Housing Stabilization and Preservation Trust Fund — serving both renters and low- and moderate-income homebuyers. The other half would go to the Global Warming Solutions Trust Fund, which would protect neighborhoods, homes, and businesses from the impacts of climate change while also investing in mitigation solutions, like energy efficiency, that will enable us to meet our state’s ambitious climate goals.
Raising the deeds excise tax is an equitable way to generate revenue. It is progressive because the tax is linked to real estate prices, buyers and sellers of high-end homes pay more. And it is affordable for lower-income homebuyers as well. Most families only pay the tax once or twice in their lifetime and it is amortized over the life of their mortgage.
The housing and climate crises are increasingly urgent, and we no longer have the luxury of addressing them one at a time. But this dual challenge is also an opportunity. We can meet the need for affordable housing with homes that are healthier for residents, more energy efficient and more climate resilient.
While the state has significant ARPA funds to deploy right now, HERO revenue would likely kick in just as the ARPA funds begin to deplete, ensuring that we can sustain investments now being launched. As state legislators consider proposals on housing and climate, the HERO Act deserves their support.
Kimberly R. Lyle is the director of strategy and development at Dorchester Bay Economic Development Corporation, an affordable housing developer and community development financial institution in the Uphams Corner neighborhood in Boston.Joe Kriesberg is the president & CEO of the Massachusetts Association of Community Development Corporations, a membership organization that represents 97 CDCs and community-based organizations across the Commonwealth working to expand housing and economic opportunity while advancing racial equity.