The Boston City Council recently voted in favor of a two percent real estate transfer fee on transactions exceeding $2 million.
The council voted 10 to 3 in favor of the new tax with Councilor Frank Baker, Mark Ciommo, and Althea Garrison voting against it. The proposal was developed by City Councilor Lydia Edwards, who represents District 1 (North End, East Boston, and Charlestown).
“The pain in our communities grows as rents rise,” said Edwards. “We are asking the real estate industry to step up and make sure the Bostonians who help grow their community get to stay there.”
The tax would create approximately $200 million a year for affordable housing. Revenue generated by the transfer fee would be deposited in the Neighborhood Housing Trust.
“If we do not step up here in the city of Boston, we become the easy prey for those who would use our housing market in such a way that they would take all of our resources out of the community on the backs of people just trying to stay and raise their families,” said City Councilor Kim Janey.
“We know we are in a housing crisis. We know we need to use every single tool available to us,” Janey added.
City Councilor Michelle Wu said one of the main concerns she hears from residents is housing.
“It is powerful that the city council is stepping up to do something about it in a way that is progressive, that reaches different avenues and addresses the crisis immediately,” she said.
However, not every councilor had positive feedback on the next tax.
“Some say it is just two percent while I say it’s two percent of somebody else’s money,” said Baker.
Baker said developers should not be taxed for trying to improve neighborhoods and the council needs to find another way to handle the housing crisis. He also worried that the two percent would grow over time into a larger percentage.
“Once a camel is under the tent it’s under the tent. I don’t trust the 2 percent,” he added.
The state now needs to pass the new tax for it be set to law. Boston would join cities and towns like Somerville, Concord, and Nantucket that have advanced home rule petitions to authorize real estate transfer fees.
Councilor Edwards spoke about the real estate transfer fee as part of her legislative updates to the North End/Waterfront Residents’ Association (NEWRA). Watch that video here.