Boston’s City Council passes new transfer tax on property sales

BOSTON — Cranes, trains and automobiles.

Boston is in a building boom, but rent and home prices are at record highs and pricing people out.

“I think it’s something that we desperately need. We desperately need money for affordable housing. This is a really important first step. And it’s over $160 million,” said Mike Leyba, director of development for City Life/Vida Urbana.

The Boston City Council voted Wednesday to approve a controversial new tax proposal to the state Legislature, asking to charge developers up to 2 percent on sales over $2 million.

It would generate nearly $200 million a year for affordable housing creation.

“It’s probably one of the top three issues in the city of Boston I hear every single day,” said Boston Mayor Marty Walsh.

Councilors Lydia Edwards and Kim Janey say Boston is joining a coalition of communities looking to use transfer fees for housing relief.

“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.

Somerville, Concord and Nantucket have all sent similar home rule petitions to the state. Watertown, Cambridge and Arlington, they're considering it.

But none have successfully had a measure passed yet.

Boston Mayor Marty Walsh told Boston 25 News that he’s ready to fight for the city’s right to implement the new tax on future projects.

“If we don’t get this approval, then we’re gonna go to the Legislature and ask them for the money and I think this is an opportunity for us to be able to raise our own revenue, with our own city and we can do it in a responsible manner,” Walsh said.

Tamara Small from NAIOP Massachusetts says developers were able to compromise in Boston, but they have reservations about tying a tax to an ever-changing real estate market is not sustainable housing plan.

“We are concerned with the sheer number of transfer tax proposals at the State House right now. Communities are looking to transfer taxes to fund anything from education to climate change and affordable housing. Unfortunately, a transfer tax alone cannot solve all of those problems," Small said.