Boston Mayor Michelle Wu announced a round of actions Tuesday intended to spur the creation of more affordable housing in the city, including a new real estate transfer tax on sales above $2 million that she will bring to City Council next month.
Wu’s request for a new transfer tax, known as a home rule petition, would need approval from City Council, the state Legislature and the governor in order to go into effect. The transfer fee proposal has been floating within the City Council for the last several years. Proponents say it would put additional funds into the city coffers to be used toward various housing efforts.
"The home rule petition will also include property tax relief for seniors who are long-time owner occupants in our neighborhoods," Wu said from City Hall.
Further evaluations of city-owned properties, rent stabilization in the city and housing policies are coming, or already in progress, the mayor said Tuesday. Boston’s inclusionary development policy, or IDP, will be studied by the city to see how it can be expanded and changed, an announcement that spurred some blowback from local real estate leaders.
The city, according to Wu, recently started an audit of city-owned property and will soon form an advisory group on rent stabilization, a first step toward her campaign promises to both identify locations where more housing can be built and attempt to bring rent stabilization to Boston.
Additionally, Wu said, the city will conduct a separate study on Boston’s linkage policy, another measure that leverages the development market for housing funding.
"Together, these actions will help us move with urgency towards creating a more affordable city where our working families can stay in their neighborhoods," Wu said.
The IDP is intended to create units for the city's moderate- to middle-income residents who make too much to qualify for many units restricted at lower income points and not enough to comfortably afford market rate.
Right now, it applies — with certain exemptions — to market-rate residential projects that have at least 10 units, and are either financed by the city or are on property owned by the city or the Boston Planning and Redevelopment Agency.
The policy requires that they either designate a portion of their development units as income restricted (typically 13%); create some income-restricted units near their building; or pay a fee in a fund based on where their developments are located.
As of 2019, the IDP has led to the creation of about 4,000 units since it was put in place in 2000, according to the Boston Planning and Development Agency.
Wu said the IDP study will explore how Boston can change the policy to demand a 20%, or higher, cut of units from developers. She added that another potential adjustment, lowering the 10-unit threshold that triggers the policy, could come via executive order in the new year.
"You could look at any [Zoning Board] agenda and there are so many nine-unit proposals because developers realize that there's a strict cut-off there," Wu said. "So, as we're looking at infill development in our neighborhoods and the opportunity to really link resources ... with the growth and development of our communities, that is one option that we're analyzing very closely."
Wu was flanked by supporters such as Councilors Lydia Edwards and Kenzie Bok as well as local housing nonprofit leaders at Tuesday's press conference. But others, like Douglass Quattrochi, executive director of Mass Landlords, said Wu should focus on measures that do not require new laws.
"I really think the mayor would do a lot more good for a lot more people looking at things that are entirely within her control to just change," Quattrochi said, suggesting things like universal multi-family zoning to allow for more density.
Mass Landlords is opposed to rent stabilization, and Quattrochi was dubious about making headway even if he was given a seat on Wu’s new advisory committee.
"If it's a whole bunch of folks who come from the perspective that rental housing should be publicly owned and there shouldn't be private landlords, we're not going to have any common ground," he said. "I just can't imagine the people Mayor Wu's going to get for this rent [stabilization] committee would be even-handed."
Other development groups in the Greater Boston area offered Wu praise over her goals.
“We commend Mayor Wu for her commitment to making housing more affordable and available in Boston, a shared goal of the Greater Boston real estate community," said Gregory Vasil, CEO of the Greater Boston Real Estate Board in a statement. The group markets itself as the oldest real estate trade association in America.
Vasil added Wu should assemble a broad array of stakeholders on the committee "to ensure the best, most workable solutions on the table."
"We also believe the Mayor and her study groups should aggressively explore all ideas that reach our shared goal, including taking down barriers to new construction, directly empowering first-time home buyers and more," Vasil's statement continued. "Policies such as these will especially benefit those who often face unjust barriers to acquiring and owning their own home, such as Black and brown, low income, and immigrant individuals.”
Beyond the IDP, Boston's linkage policy will also be re-examined for ways to extract money from new developments — "including from lab space," Wu said.
The linkage policy, enacted in 1986, requires developers seeking zoning exceptions for proposals larger than 100,000 square feet to pay into a fund for housing creation and job training.
According to Wu’s administration, the IDP fund’s balance is $32.3 million and the neighborhood housing trust, funded by the linkage policy, has a balance of $16.2 million. All of the money in both funds have been awarded to housing project.
At the announcement Tuesday, Wu also responded to public pushback over her decision to expand COVID-19 vaccination mandates within the city. During a press conference announcing the new rules, a small band of protesters disrupted the mayor and other elected officials with chants and singing.
"Some of the hardest decisions we make are the most important ones to make," she said. "We see a lot of emotion around many issues, but often times emotion is also tied to feeling confusion or unpredictability," she added, vowing the city would work to coordinate and inform residents.
