The Assembly Ways and Means Committee heard testimony Wednesday from opponents and proponents of imposing a real estate transfer tax to combat the housing crisis.
The pressure comes as home prices and mortgage rates continue to rise, forcing people out of the market.
Officials in 10 communities across the state are lobbying to impose varying amounts of transfer fees on property sales. That money would go towards affordable housing. Community and affordable housing advocates are also asking Congress to pass a bill to change state law that would allow cities and towns to collect such taxes without permission from the Legislature or the governor.
The cities and towns are Amherst, Arlington, Boston, Cambridge, Chatham, Concord, Provincetown, Somerville, Truro, and Wellfleet.
Some of these communities have been pushing for this tax for years. Concord, for example, voted yes in 2019 and 2023.
Pamela Schwartz of the Western Massachusetts Network to End Homelessness said her region has a shortage of 11,000 affordable housing units, which is expected to grow to 19,000 units by 2025. Stated. She cited the unprecedented homelessness rate in the region and 36% year over year. With evictions increasing every year, she argued that communities should be allowed to allocate transfer fees without state permission so that funds can be withdrawn from rural communities into local housing funds.
“This will shorten a desperately needed process for communities to decide how to apply transfer fees to their affordable housing needs,” Schwartz said.
Mark Kavanaugh, chairman of the Massachusetts Association of Realtors Government Affairs Committee, voiced strong opposition at the public hearing.
“We are adamantly opposed to taxing housing, as it is proposed in some of the bills on the table today, because it goes against what we are trying to do with affordability. Because we know that,” Kavanaugh said. “Real estate agents are on the front lines of the housing crisis.”
“Transfer taxes negatively impact our communities…deprive homeowners of equity, increase income stratification, limit diversity and inclusion, and enforce existing patterns of de facto segregation.” “We’re going to do that,” Kavanaugh said.
“For every $1,000 increase in home prices, 1,727 Massachusetts residents will be priced out,” he said, adding that the transfer tax would increase competition for homes below that price threshold.
In 2022, Mayor Michelle Wu has proposed a 2% transfer tax or the sale of real estate worth more than $2 million in Boston.
“Housing is about health, safety and opportunity, and housing stability must be the foundation of our recovery from the pandemic,” Wu said at the time. “As housing costs become increasingly unaffordable for families, we must take urgent action to keep families in their homes and build cities for everyone. .”
The Ways and Means Committee is required to take a final vote by February.
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