Mayor Michelle Wu joined State Representative Brandy Fluker Oakley, local elected officials, and residents to sign a home rule petition to implement a transfer fee of up to two percent on real estate sales of $2 million or more in the City of Boston. If passed by the Massachusetts Legislature and signed by the governor, the fee will generate nearly a hundred million dollars annually to create and preserve affordable housing in Boston and reduce property taxes for qualified low-income senior homeowners. The legislation is sponsored by State Representative Fluker Oakley. The Home Rule Petition passed the Boston City Council Wednesday.
“Boston’s most pressing challenge is our housing crisis, which has been pushing families out of our city and deepened even more with the pandemic. As we see the transformational impact of federal funding for our recovery, it’s clear that Boston needs a reliable funding source to focus on housing affordability and keep families and seniors in their homes,” said Mayor Michelle Wu. “I’m grateful to Council colleagues for partnering on this urgent issue and many colleagues who have shepherded this issue in previous sessions. I look forward to working closely with our state partners on next steps.”
Through the legislation, the first $2 million of the sales price on a home in Boston would be exempt from the fee. For real estate sales over $2 million, the fee collected will be paid by the seller. The funds generated will be allocated to the Neighborhood Housing Trust. The Neighborhood Housing Trust creates new affordable housing and preserves existing affordable housing. Based on 2021 sales in Boston, a two percent fee would have raised an estimated $99.7 million, and would have only affected approximately 700 transactions. Similar proposals were filed in 2019 and 2021.
“I am so excited to see Mayor Wu and the Boston City Council taking action to make housing in Boston more affordable for seniors,” said State Rep. Brandy Fluker Oakley. “I have met with and testified before the City Council about the need for large developers of luxury apartments to pay their fair share, which would allow us to expand property tax exemptions for seniors on a fixed income and make housing in Boston more affordable.”
Some transfers between family members are exempt from the fee, and the City of Boston may adopt additional exemptions for economically vulnerable populations, affordable housing developments, deed-restricted housing, owner-occupant homeowners, beneficiaries of a city-approved homebuyer program, or others.
“This bill is about housing stability,” said State Senator and City Councilor Lydia Edwards. “This is a great opportunity for our city. It balances raising revenue with granting relief for our seniors.”
“Today Boston is taking a major step to ensure we have adequate funds to create and preserve affordable housing, and to provide much needed tax relief to our seniors who have dedicated their lives to our great City,” said City Councilor Kendra Lara. “As we combat the housing crisis and recover from the pandemic, we must protect our seniors who have been bearing the brunt of the impacts of both displacement and COVID-19. I look forward to working with our colleagues at the state house to get this passed.”
The home rule petition also seeks to expand property tax relief for low-income seniors by modifying the eligibility criteria for the 41C program and increasing the exemption. These changes will modernize the criteria and provide much-needed financial assistance to a vulnerable population.