Massachusetts Senate introduces  billion housing bill, dashing hopes for a real estate transfer tax
Massachusetts Senate introduces  billion housing bill, dashing hopes for a real estate transfer tax

Democrats in the Massachusetts Senate on Monday announced a five-year, $5 billion housing bond bill that they say will help “spur manufacturing” and “preserve and promote access” to housing as the state battles a housing crisis. The bill omits a controversial measure proposed by Gov. Maura Healey that would impose a new tax on real estate sales over $1 million.

When asked about the omission of the real estate transfer tax, Lydia Edwards, chair of the Senate Joint Committee on Housing, pointed to the Community Preservation Act, which gives local communities the ability to levy taxes for public space, historic preservation and housing. This act is an existing local option that needs to be strengthened.

“Before we introduce an additional tax, I think we should look at what tools we already have available in the toolkit,” she said. “One hundred and ninety-six cities and towns have some form of CPA, and that is a type of tax that you can choose at the local level, and it has not worked as well as it should have.”

Supporters of the real estate transfer tax reacted with disappointment.

“If we agree that the housing market is a crisis, we should act like it by providing all available resources,” said a statement from the Greater Boston Interfaith Organization. “Ultimately, this failure means our cities and communities have been denied a real opportunity to raise new funds for affordable housing development.”

Boston Mayor Michelle Wu, a strong supporter of the transfer tax, said the city would continue to push for its implementation.

“This measure is very popular in all of our communities. We know that residents understand that more money is needed for affordable housing,” Wu said.

The Massachusetts House of Representatives passed its own version of the bill earlier this month, which also lacked the transfer tax language.

Overall, Senate Democrats estimate their bill would create about 40,000 housing units, about a fifth of what Massachusetts needs over the next decade to house its growing population and lower housing prices, according to the Governor’s Office of Housing and Livable Communities.

“With this important bill, the Senate underscores its commitment to creating a more competitive, affordable, and equitable state, with a focus on helping low- and moderate-income residents struggling with high housing costs,” Senate President Karen E. Spilka, Senate Committee Chairman Michael J. Rodrigues, and Lydia Edwards said in a joint statement announcing details of the bill.

“To correct decades of racially motivated housing policies, the Senate bill establishes the Fair Housing Office to eliminate discrimination in the housing market and advance the state’s approach to fair housing. It also supports tax credits such as the Homeownership Tax Credit for first-time homebuyers and an increase in the Community Investment Tax Credit Program to help the state meet its housing goals.”

The bill provides $2 billion for repairs and renovations of public housing, $800 million for the Affordable Housing Trust Fund to promote middle-income housing, $200 million to support “innovative and alternative forms of rental housing,” including transitional and permanent housing for the homeless, and $50 million for a seasonal community housing innovation program and a rural and small-town housing program.

The bill also includes tenant-friendly legal provisions, such as allowing tenants to request that their eviction papers be sealed. It also includes a measure to prevent landlords from passing on broker fees to tenants, an aspect that Chairman Edwards praised in a call with reporters.

“We all know that just paying the first (month’s rent), the last (month’s rent) and the security deposit and the realtor’s fee, a lot of people have to pay almost $12,000 to $15,000 when they move in,” she said. “If you’re a landlord, you’re paying the entire cost.”

Senate Democrats said in a statement Monday that they will seek a vote on their bill this week. After that, the two chambers will have to coordinate and decide what to include and what to leave out of a bond bill that both approve.

Edwards said that once this step in the process is reached, everything is negotiable.

I think both sides and the governor understand the urgency of this conversation, and I know we’re both going to do everything in our power to make that happen.”

By Aurora