Boston acting Mayor Kim Janey speaks to reporters at an Aug. 16 event to welcome welcome first-time low-income homebuyers to a building purchased by the Chinatown Community Land Trust. Photo by Isabel Leon | Boston Mayor's Office
Boston political leaders are making a new push to add a city transfer tax on high-end real estate sales to help fund affordable housing.
Acting Mayor Kim Janey and the Boston City Council filed a new home-rule petition with state legislators asking for permission to tax real estate sales over $3 million at a rate of 2 percent. The measure could generate up to $65.3 million per year to fund the creation of new income-restricted housing or the preservation of existing units whose affordability restrictions are set to expire.
“As a person who has experienced housing insecurity, creating more homes that Boston residents can afford is my priority,” Janey said in a statement. “It’s important that the city of Boston is creative in generating funding for income-restricted housing. I look forward to working with the Boston City Council and the Massachusetts legislature to pass this critical legislation that will allow more housing opportunities to keep and attract residents.”
This isn’t the first time Boston leaders have tried to push a similar tax for similar purposes in recent years.
Unlike most cities and towns in Massachusetts, Boston must appeal to the legislature for approval for significant changes to its laws. Former mayor Marty Walsh and the current City Council tried to get state approval for a 2 percent transfer tax on sales over $2 million to fund affordable housing in 2019. Janey, then a city councilor, and District 1 City Councilor Lydia Edwards led that effort. Legislators on Beacon Hill were not swayed by appeals from Walsh and the petition did not advance.
Just before departing office to lead the federal Department of Labor in President Joe Biden’s administration, Walsh also pushed a 43 percent increase to the fees, known as “linkage payments,” that developers must pay to fund affordable housing and job creation, and real estate industry groups are likely to point to this increase when lobbying state legislators against the new home rule petition.
During the 2019 debate over the transfer tax proposal, Both commercial real estate industry group NAIOP-MA and the Greater Boston Association of Realtors said they fear the tax could both discourage new construction and cause developers or buyers of buildings to pass on the cost of the tax on to their tenants.
