A Boston tax proposal hit the House floor on Monday in a late-session advance over the controversial idea of imposing a new charge — up to 2% — on real estate transactions over $2 million. in the most populous city in the state.
The House gave the bill an initial approval vote after a positive report from the House Steering, Policy and Planning Committee chaired by Boston Rep. Kevin Honan.
The bill aims to direct new revenue into affordable housing, while opponents have said there are other sources of funding available and the cost of a top-up on transfers would be passed on to tenants.
The Boston City Council and Mayor Michelle Wu approved the legislation in March before it was introduced in the Legislative Assembly by Rep. Brandy Fluker Oakley. The revenue committee, chaired by Rep. Mark Cusack of Braintree and Sen. Adam Hinds of Pittsfield, extended its review of the measure until July 31 before awarding it a favorable report.
Opposition from any lawmaker gains momentum after July 31. The two branches must meet for the remainder of the term in informal sessions, where only one lawmaker can oppose consideration of a prosecutorial bill.
Revenue Committee reports on several local transfer tax proposals featured dissenting votes from Sen. Ryan Fattman of Sutton, according to the House calendar, and a Boston senator backed the idea of the transfer tax. transfer at a hearing in June.
Sen. Nick Collins of South Boston called the proposal a “tax hike” during his testimony before the Revenue Committee in June, while adding that he supported “the spirit of the bill” and the ” intentions of the funds”, which the city would direct towards affordable housing.
In a year when calls for tax relief echoed across the state, Collins warned against “taking a step in the wrong direction of tax increases, instead of prioritizing our expenses or to see what leeway we have to do in terms of revenue generation, which is already the authority of the municipalities.
Asked about his feelings on the bill’s progress on Monday, Collins told the News Service that “my priority is really to focus legislative efforts, at the state level, to help the City of Boston resolve the crisis at Melnea Cass and Mass. Ave. is secondary at this point.”
The bill now goes to the House Committee on Bills for third reading. If the chairperson, Rep. Denise Garlick of Needham, withdraws the bill from that group, another favorable House vote would send it to the Senate.
At the Revenue Committee hearing, Wu cited housing costs as “the number one challenge and stress our residents are raising with me” and said the proposed tax “would have a huge impact”.
“Based on 2021 numbers, this would generate up to $100 million in local revenue to address our housing crisis, and would only affect about 700 real estate sales citywide out of nearly 10,000 transactions, or about 7% affected,” Wu said. “…It’s not about increasing upfront costs, it’s not about adding to the burden as developers seek to reconcile licensing costs and get through the process. This adds very small transaction fees at the point of sale, when the resources are there, to be able to have a huge impact in our city.
Other transfer rights bills are pending in the early stages of the legislative process, such as the Somerville and Brookline Bills, both of which have been favorably flagged by the Revenue Committee and are currently pending on the schedule of bedroom. The Senate gave initial approval in March to a transfer tax bill for Concord, which has since sat on the Senate committee for third reading.