Transfer taxes, rent control measures point to growing frustration over housing market
The 585-unit 345 Harrison Avenue development features a roof-top dog park and other posh amenities. Available studio apartments start at $3,089 a month and three-bedrooms start at $6,436. BANNER PHOTO
One-fifth of all housing units in Boston are income-restricted, yet housing advocates and neighborhood residents regularly cite skyrocketing rents and displacement of long-term residents as their most pressing concerns.
While the administration of Mayor Martin Walsh is calling for the construction of 15,820 affordable units by 2030 — 22 percent of the total of 69,000 units proposed in his Imagine Boston 2030 plan — city councilors are seeking more drastic measures to curtail displacement.
Earlier this month, city councilors Lydia Edwards and Kim Janey proposed a transfer tax that would discourage housing speculation and property-flipping and provide funding to build more affordable housing.
“We need to make sure that Boston remains a city where people who currently live here and others who want to make Boston their home can continue to do so,” Janey said in a recent interview with the Banner.
“What’s getting built is stuff that the average person can’t afford to live in,” Edwards said. “There’s all this building going on, but people can’t afford any of it.”
The two councilors believe that their proposed transfer fee, which would impose a 6 percent tax on real estate transactions above $2 million and a 25 percent tax on properties sold repeatedly within two years, is one solution, and would raise hundreds of millions of dollars.
Edwards and Janey aren’t alone in their calls for more aggressive measures to stem the tide of displacement. In November, at-large Councilor Michael Flaherty surprised many when he suggested that city officials look again at rent control during a meeting on displacement in Roxbury.
“We need to do something,” he later said in a November interview with the Boston Herald. “What we’re doing now, it’s just not putting a dent in the problem.”
That Flaherty, who in the past voted against rent stabilization measures, is calling for a look at rent control is perhaps the greatest indication of the increasing alarm with which city councilors are looking at displacement in their neighborhoods.
“Councilor Flaherty clearly now sees the depth of the crisis and understands that production alone isn’t the answer,” said Boston Tenant Coalition Executive Director Kathy Brown, who worked in the 1990s and 2000s on various rent control initiatives.
Creating affordable housing
Sheila Dillon, Boston’s Chief of Housing and Director of Neighborhood Development, says that the city is doing its best to combat displacement.
“Affordable housing is created in two ways: with sites where one can build, and money to buy down rents and sales prices,” she said. “We’re also spending a lot of money preserving the affordable housing we have.”
There are three types of affordable housing in Boston: subsidized rentals, in which residents pay a set percentage of their income each month; income-restricted, which is limited to residents who earn a certain percentage of the area median income; and voucher programs, where residents are provided with a certain amount of money for rent each month and pay anything over that amount.
There are approximately 50,000 affordable housing units in Boston now, Dillon said, and the city works every year to create more, but building housing is expensive.
Earlier this month, Mayor Martin Walsh filed a housing legislation package that included both tenant protections, including rent control for senior residents, and provisions to raise housing revenue for the city, such as adjusting linkage fees.
“The city needs housing for a range of incomes: for low-income seniors and low-income families to middle-income to workers that are coming into the city,” Dillon said.
Barriers in the real estate market
Karen Chen, a housing advocate and executive director of the Chinese Progressive Association, says that housing speculation has hurt long-term residents of Chinatown.
“One of the biggest problems is buying and speculation of row houses,” Chen said. “These historical buildings housed working families for generations, until housing speculation. With so many people trying to buy these row houses and add up the prices well above market, it’s really putting a lot of working families at risk of facing imminent displacement.”
Chen also pointed out that because of Chinatown’s central location in the city, many properties have been purchased for the sole purpose of renting them out for the short term on platforms such as Airbnb, displacing tenants.
Last year, the city passed an ordinance that regulates these short-term rentals. The ordinance, which went into effect on Jan. 1, imposes a fee on units that are rented out for periods of less than 28 days, and restricts what types of units can be used for short-term rentals.
“We’re pushing for the short-term rental ordinance in Boston because we know that things like that will spread to other neighborhoods,” Chen said.
Edwards also mentioned that for cheaper housing alternatives, such as cooperative housing, it is difficult for residents to obtain loans.
“That’s a really important thing, to look at different forms of ownership,” she said. “I don’t know a bank that’s giving that kind of mortgage. It’s really bringing the financiers and helping educate that there’s different ways to finance.”
In addition to the transfer fee proposal from city councilors and legislation from the mayor’s office, the city pours millions of dollars each year into creating affordable housing, but Edwards says it still isn’t enough.
“The city is making an effort, absolutely,” she said. “I just think that the greatest efforts, unless they’re fully funded and supported by a lot of money and capital, just won’t be able to make a big enough dent.”
Other ideas that have been floated in the past include a return to rent control, which Massachusetts residents narrowly voted out by ballot in 1994. (Voters in Boston, Cambridge and Brookline — the sole three communities in the state that had rent control — voted overwhelmingly to keep rent control that year).
Dillon says that the problem with aggressive measures like rent control is that, despite a majority of Boston residents being renters, it is difficult to get them passed. City councilors repeatedly blocked home rule petitions re-instating different forms of rent control during the past 20 years.
“If we’re going to expend energy on new legislation, we have to feel pretty confident that it has a likelihood of being passed, otherwise they’re statements,” Dillon said. “When we craft legislation, we’re pushing to make things better, but we also have to be realistic. Making sure that our elders are safe and can stay in their homes — that has a good likelihood of being passed.”
Edwards noted a current state bill filed by Senator Joseph Boncore, the HOMES Act, which would seal evictions after three years, much like similar laws in the state which seal misdemeanor crimes after three years and felonies after seven.
“It would impact a million people in Massachusetts right now, and the majority of those people are women and people of color,” Edwards said. “The question is how much of a punishment are you going to put on somebody, when 80 percent of evictions are due to non-payment of rent.”
Getting these measures passed is a question of money and of sheer will from their supporters, advocates say.
“It’s important for resident renters and the cities to stand together, and really fight against this whole culture of land and housing speculation,” Chen said. “We need to promote housing as a human right.”
Yawu Miller contributed to this story.