On Monday, Councilors Lydia Edwards and Kim Janey proposed a Home Rule Petition to combat housing speculation and establish an investor and commercial property transfer fee.
The proposed bill would enhance the City’s housing toolkit by generating millions of dollars for affordable housing and by discouraging the inflation of housing prices through rapid resale of properties. The proposal was assigned to committee in Wednesday’s council session.
The bill authorizes the City of Boston to establish a fee of up to 6 percent, split evenly between buyer and seller, on real estate transfers over $2 million, with an estimated revenue of $175m – $350 million based on 2015-2017 sales. Exemptions are in place for owner-occupants, transfers between family members and homes purchased through approved home-buying classes. The bill also would authorize a fee of up to 25 percent on secondary sales, or flips, within a two year period.
“Boston residents are struggling as our economy booms, and our homes have become the new stock market,” said Boston Councilor Lydia Edwards. “Housing costs are straining families’ resources and pushing talented workers out of our city. This legislation will curb real estate speculation and generate millions to build and preserve affordable housing.”
Said Councilor Janey, “We are in a housing affordability crisis. These fees will not only discourage speculation in our housing market and the over-creation of luxury condos, it will also raise much-needed revenue to invest in affordable housing, and help stem the tide of gentrification. I look forward to working with my colleagues on the City Council, the Mayor, and the legislature in passing this law.”
Other cities, including New York City, have enacted luxury transfer fees and there is a growing movement in Massachusetts. The Somerville City Council passed a home rule petition in 2018 which is still pending before the legislature. Cambridge began exploring a transfer fee in January 2019. State legislation authorizing a transfer fee has also been introduced by Rep. Mike Connolly and Sen. Joseph Boncore (HD.414 / SD334 – An Act supporting affordable housing with a local option for a fee to be applied to certain real estate transactions).