Gov. Maura Healey’s support for allowing municipalities to enact a real estate transfer tax could offer some cover to the cities and towns that have been agitating for the controversial policy change as yet another tool to shore up their affordable housing stock.
Her $4 billion five-year housing bond bill, announced in Chelsea on Wednesday morning, is the administration’s opening volley of a long-range policy debate. Tucked among more than two dozen policy proposals is a provision that would let local communities impose a 0.5 to 2 percent fee on property sale proceeds over $1 million, or the county’s median home sales price, whichever is greater.
While the administration projects the fee would affect fewer than 14 percent of all residential sales – paid by the seller and designated for affordable housing developments within the community – attempts to push these fees have hit the Beacon Hill buzzsaw for years. Legislative leaders demonstrated little appetite to approve transfer fee home rule petitions from at least 10 cities and towns from Greater Boston to the Cape.
Nor did the corner office. Former governor Charlie Baker looked askance at proposals out of cities like Boston to impose such a transfer fee.
Many of Healey’s proposals to boost “competitiveness” through encouraging housing production over her first year have been expansions or continuations of Baker-era policies, such as the MBTA Communities Act. This marks a high-profile departure.
“We know we have to go really big,” Healey said on Wednesday. For decades, she said, housing production has not kept pace with our population growth, leading to a severe housing shortage in Massachusetts. “There aren’t enough homes to go around and prices have gone up. I don’t want people leaving. I don’t want to see people struggling. We don’t want our economy to stop growing and thriving. We don’t want our communities to see disinvestment. So what we’re going to do is invest in housing, invest in new homes, unlocking new opportunities, making homes and housing more affordable.”
Real estate groups are engaged in a multi-front fight against these fees, objecting to individual home rule petitions and the housing bond bill proposal.
“While we support the goals of the bill, we have deep concerns about the inclusion of a sales tax on real estate,” said Greg Vasil, CEO of the Greater Boston Real Estate Board, in a statement. “It’s an unstable source of revenue that would cause more harm than good at a time when people and businesses are leaving the state because it is just too expensive.”
Administration housing officials say that fear is misplaced. They are confident that such a fee would not impede housing production, specifically because the money is earmarked for affordable housing rather than being an open revenue source.
The transfer tax proposed by the Healey administration includes carveouts targeting low-income homebuyers and first time homebuyers. Transfers between family members, intergovernmental entities, or those in affordable housing would be exempt, according to the Office of Housing and Livable Communities.
As the tax would not kick in until after the first million in home sale value, a transaction for $1.1 million, for instance, would tax the $100,000 of excess.
Even if it makes it through Beacon Hill, the transfer tax is only a local-option authorization. Cities and towns would then need to gear up for their own pushes for whatever percentage feels right.
Home prices across Greater Boston are astronomical, even as the number of sales continues to plummet in an ever crunched housing market. The median home sales price for the region hit a record high of $900,000 earlier this year and sat at about $850,000 in September.
Those skyrocketing prices could be a windfall for the city of Boston, Mayor Michelle Wu has argued in pushing a home rule petition for a local transfer tax. Based on 2021 numbers, she said earlier this year, about 7 percent of sales would have been subject to the tax and generated up to $100 million in local revenue.
Wu thanked the Healey administration for its bond bill proposals on Wednesday morning.
“From doubling our funds for affordable housing by enabling a modest transfer fee, to supporting office-to-residential conversions and accessory dwelling units, these proposals match Boston’s plans to move on all fronts for more housing and more affordability,” she said.
JENNIFER SMITH
FROM COMMONWEALTH
Healey housing proposals: Real estate transfer fees, easing rules on granny flats, and a new momentum fund are some of the ideas contained in a $4.1 billion housing bond bill filed by the Healey administration to address the state’s shortage of housing. The package does not contain any backing for rent control. Read more.
No plans to retire: House Speaker Ron Mariano said he intends to seek another term as speaker, but the Quincy Democrat says “that remains to be seen” when asked whether he will serve an entire term. Read more.
OPINION
Why I resigned: Ed Burley, the former co-chair of JP Progressives, explains why he resigned in the wake of the group’s endorsement of City Councilor Kendra Lara, who came in last in the three-person preliminary election for the District 6 seat. When it comes to maintaining “accountability-based” relationships with elected officials as an independent organization, “we fell short,” he writes. Read more.
FROM AROUND THE WEB
BEACON HILL
The House plans to attach a gun control measure to a close-out budget bill next week, a move gun rights advocates are decrying as a legislative “shell game.” (Boston Herald)
MUNICIPAL MATTERS
The neo-Nazi group NSC-131 distributes flyers in Easthampton calling on men of European descent to “raise authentic resistance to the enemies of our people.” Mayor Nicole LaChapelle calls the leafleting “beyond alarming.” (Daily Hampshire Gazette)
The Cambridge City Council approved zoning changes that could allow much taller buildings as part of an effort to address the regional housing shortage. (Boston Globe)
HEALTH/HEALTH CARE
The Worcester City Council has decided not to adopt ordinances regulating the advertising practices of clinics that advertise against abortion. (Worcester Telegram)
WASHINGTON/NATIONAL/INTERNATIONAL
President Biden lands in Israel as the region is convulsed by the bombing of a Gaza hospital that killed hundreds, an attack Hamas blamed on Israel but which Israel says was the result of an errant rocket fired by a Palestinian faction in Gaza. (New York Times)
The US government agrees to a class action settlement with migrant families who were separated at the border during the Trump administration. (NPR)
BUSINESS/ECONOMY
The more things change: The Globe rolls out the first installment in a Spotlight series looking at the regional housing crisis, with a focus on Milton’s efforts to resist new housing construction. How baked in is this pattern across Greater Boston suburbs? The piece carries a strong echo of this CommonWealth story from two decades ago.
EDUCATION
New Bedford Light columnist Jack Spillane says state Sen. Mark Montigny should call for the resignation of UMass Dartmouth chancellor Mark Fuller over his handling of the exiting of the schools visual arts college from downtown New Bedford.
TRANSPORTATION
Emails show a lack of communication within the MBTA about safety concerns over potentially elevated carbon monoxide levels in a tunnel that caused suspension over the weekend of work on the temporarily shuttered Ashmont branch of the Red Line. (Boston Herald)
MBTA general manager Phillip Eng says that Red Line repair work is on track to be completed on time. (Dorchester Reporter)
CRIMINAL JUSTICE/COURTS
Suffolk County District Attorney Kevin Hayden concludes a police officer who shot and killed a man who gunned down two Black people in Winthrop was defending himself and will not face criminal charges. (Associated Press)
President Biden will nominate Massachusetts US Attorney Joshua Levy, who took the reins following Rachael Rollins’s resignation, as the permanent top federal prosecutor in the state. (Boston Globe)