From the Offices of Boston City Councilors Lydia Edwards and Kim Janey:
Councilors Lydia Edwards and Kim Janey have 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 will be assigned to committee in Wednesday’s council session.
The bill authorizes the City of Boston to establish a fee of up to 6%, split evenly between buyer and seller, on real estate transfers over $2 million, with an estimated revenue of $175m – $350m 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% 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. 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.” – District one city Councilor Lydia Edwards
“We are in a housing affordability crisis,” said Councilor Kim Janey. “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.”
The Boston City Council held a working session in November to discuss housing speculation, defined as when investors buy up properties, apartments and condos for a low price to then turn it around at a quick rate to make a bigger profit. Councilor Lydia Edwards called for that hearing, saying the Council needed to get to work on solving this big problem in the city.
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.