Boston Mayor Marty Walsh delivers his 2020 State of the City speech on Jan. 7, 2020. Photo courtesy of the Office of Mayor Marty Walsh.
Spotlighting housing costs as the biggest economic challenge facing Bostonians, Mayor Marty Walsh said he’ll push for a $500 million commitment toward housing over the next five years.
The money could come from a combination of city funds, proposed sale of the Lafayette garage property in Downtown Crossing and a proposed 2 percent transfer tax on sales of properties above $2 million.
“Altogether, this is one of the most progressive housing policies in America, because we believe in a Boston where housing is more than a commodity, it’s our community,” Walsh said at the annual state of the city address Tuesday night.
Boston city councilors approved a home rule petition in December to impose the transfer tax, which also would enable the city to adjust linkage fees on large commercial developers more frequently than the current three-year schedule linked to inflation. The measure is subject to approval by the state Legislature.
Additional funding would come from the sale of the city-owned Lafayette Garage at Downtown Crossing, located in the basement of the Lafayette City Center office complex. The administration estimates the transfer tax and garage sale would generate a combined $400 million. According to a previously released estimate by City Councilor Lydia Edwards, the transfer tax alone would generate up to $168 million annually.
Along with the transfer tax proceeds and the garage sale, the city would contribute $100 million from its operating and capital budgets, double the current levels.
The money would be used to build senior citizen housing, subsidize public housing, support low-income and middle-income housing developments, issue rental vouchers to homeless and low-income residents and provide first-time homeowner assistance, Walsh said.
Walsh has set a goal of building nearly 16,000 income-restricted housing units by 2030.
Real estate industry groups including NAIOP-Massachusetts and the Greater Boston Association of Realtors oppose the transfer tax, saying it would deter new construction and inflate housing costs.
Housing prices continue to rise in Greater Boston, despite the city of Boston’s aggressive housing production policies that have permitted more than 30,000 units in the city since 2011.
The median single-family sales price in 64 Greater Boston communities hit $599,000 in November, up 2.3 percent from the previous year, according to data compiled by The Warren Group, publisher of Banker & Tradesman. Median condo prices were flat at $563,000.
Meanwhile, apartment rents in Greater Boston are the fourth highest of 79 U.S. metro areas, according to a report released this week by REIS Inc. In the fourth quarter, Boston-area apartments rented for an average of $2,349, trailing only San Jose, New York City and San Francisco.
