Tax proposal to transfer Baker Dings to Boston, Riling debate
A day before Boston Mayor Michelle Wu plans to sign a petition that would add a new real estate sales tax of $2 million or more to her city to fund affordable housing, Gov. Charlie Baker said that he didn’t “generally support that kind of stuff”. .”
Approved by the Boston City Council on Wednesday, Wu’s plan combines the transfer fee with an increase in the senior property tax exemption and would only impose the new tax on the value of property over $2 million. dollars, rather than the total amount.
As a self-government petition, it would require the approval of the legislature and Baker before it could go into effect. For years, communities have lobbied for local transfer tax proposals on Beacon Hill, with no success.
“As a rule, I don’t support this stuff, and I’m mostly wondering 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 available for housing,” Baker said during an appearance on GBH’s “Boston Public Radio.”
The governor said resources available under the American Rescue Plan Act and a “significant” state surplus mean there are “tremendous numbers” of dollars available to pour into housing initiatives.
In his proposal to spend the state’s ARPA, Baker had requested $300 million for first-time buyer programs and $250 million to revitalize downtown areas, including converting commercial space into residential units. The bill that lawmakers eventually passed included $65 million in property assistance and did not include the money for downtown redevelopment.
Baker said it was “highly unusual” for him not to support self-governance petitions backed by local officials.
“It’s an exception,” he said.
Senate Speaker Karen Spilka said she didn’t know enough about Wu’s proposal to take a stand, but was surprised Baker brought it up.
“I’m surprised that he spoke out on that, or that he said that without seeing it. Usually he 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 like to talk to Mayor Wu about it… So it’s premature for me to say anything about it, honestly.”
Baker in 2019 proposed raising an excise tax on real estate transfers to generate money to help cities and towns adapt to climate change. When asked how this attempt differed from what Boston officials were looking for, Baker said the size of his hike was “radically different” – smaller – and was “tied to an existing tax that had not been increased since 1986”.
Boston is among several municipalities seeking state permission to impose a transfer tax on property sales within their 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), as well as another version of a Boston bill (H.2942).
Bills that would allow municipalities that wish to pass transfer taxes without having to go through the Beacon Hill home rule process (H.1377, S.868) remain before the Housing Committee, which has extended its deadline for responding to it is May 9.
Arguing against rising costs for buyers and noting the range of government programs focused on housing, real estate officials have for years opposed property transfer tax bills, which have not been able to gain enough ground in the Democratic-controlled legislature to become law.
Proponents of transfer tax plans, meanwhile, say existing programs have failed to prevent house prices from straining families’ housing budgets, and that the fee would generate millions to spend on the problem.
“Housing is health, safety and opportunity – and housing stability must be the foundation of our recovery from the pandemic,” Wu said when she announced her proposal in late January. “As the cost of housing has become increasingly out of reach for families, we must take urgent action to keep families in their homes and build a city for all.”
Wu plans to sign the petition at a 10:30 a.m. press conference Friday at Foley Senior Residence in Mattapan, where she will be joined by Representative Brandy Fluker Oakley, Councilman and Senator Lydia Edwards, and Councilwoman Kendra Lara.
In testimony to 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 all of the community,” rather than distinguishing between owners and sellers, and said the proposal “fails to recognize that the real estate market is very sensitive to economic downturns.”
The 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 fairness.” “.
The Local Option for Housing Affordability Coalition, which supports bills that would allow municipalities to opt in to a transfer tax, sent its own letter to legislative leaders on Wednesday to counter housing groups and stress that every community that wants to adopt a such could set its own thresholds and exemptions.
“Many communities are experiencing housing issues that cannot be addressed by any current program,” 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 where their students grow up. In Boston, hundreds of luxury condos in neighborhoods across the city sit vacant, held solely for investment or flipping for profit.
State House News Service editor Matt Murphy contributed reporting.