Mayor Janey today filed a Home Rule Petition with the Boston City Council to generate an estimated $65.3 million to expand affordable housing in the city. The petition creates a fee of up to two percent on real estate sales over $3 million. If passed, the measure will increase funding available for affordable housing in Boston, including preserving existing and creating new income-restricted housing. After passage by the Boston City Council, the legislation must then be approved by the Massachusetts State Legislature and signed by the Governor.
“As a person who has experienced housing insecurity, creating more homes that Boston residents can afford is my priority,” said Mayor Janey. “It’s important that the City of Boston is creative in generating funding for income-restricted housing. I look forward to working with the Boston City Council and the Massachusetts Legislature to pass this critical legislation that will allow more housing opportunities to keep and attract residents.”
This legislation builds on a 2019 Home Rule Petition that passed the Boston City Council, but has not advanced in the Massachusetts State Legislature. The 2019 version proposed a fee of up to two percent on real estate sales over $2 million. The fee will instead be applied to the sales value above $3 million. This change limits the fees borne by long-term, middle-class homeowners.
Based on 2020 sales over $3 million, a two percent transfer fee would yield an estimated $65.3 million for affordable housing production and programming from 219 transactions. The largest number of transactions were in Back Bay/Beacon Hill (90) neighborhoods, the Central/Downtown neighborhoods (27), the South End (24), and South Boston/Seaport (24) area.
This Home Rule Petition builds on the City’s efforts to generate affordable housing for residents. This year, the Janey administration has invested $11.5 million in city resources into income-restricted, affordable housing which leveraged another $82.4 million in other public and private investment sources for a total $94 million investment.
The recently adopted FY22 budget included $6 million in new City funding for affordable housing programs – a 21 percent increase – including funding for City-funded vouchers and housing support for homeless households. In addition, the City has allocated $27 million of American Rescue Plan Act funds for housing initiatives, including $20 million to acquire and convert market-rate properties to income-restricted affordable housing and $2.3 million for assistance to homebuyers and homeowners. This is in addition to $145 million in federal COVID-19 relief funding the City has received and is using to support renters and homeless households impacted by the pandemic and to build more housing for low and moderate income residents.
Earlier this year, the City of Boston modified the Linkage program, requiring a 44 percent increase in the Linkage fees collected by large scale commercial developments over 100,000 square feet in Boston to support the creation of affordable housing. In 2020 alone, new development approved by BPDA is estimated to generate over $43.2 million in Linkage fees to support affordable housing. In the future, a similar level of approvals would generate $63.2 million. The funds collected through Linkage are administered by the Neighborhood Housing Trust through the Department of Neighborhood Development (DND).
Also earlier this year, Mayor Janey announced the Boston Home Center’s first-time Homebuyer Program has been expanded to provide up to $40,000 in assistance to income-eligible, first-time homebuyers who seek to purchase a home in Boston.