Business and faith organizations cheered a $4.1 billion housing bond bill filed by Gov. Maura Healey as a potential silver bullet to counteract the high cost of living in Massachusetts while real estate and fiscal groups pushed back on parts of the proposal.
Advocates said the legislation comes at a crucial moment in Massachusetts as high costs of housing and living push people out of cities and towns to other parts of the country. Critics, like the Massachusetts Fiscal Alliance, argue the legislation is packed with “just about every bad idea.”
Associated Industries of Massachusetts President Brooke Thompson said the business group supports the bill, and the development of “reasonably priced housing” in Massachusetts will ensure workers can live and raise families in the state.
“Virtually every employer in Massachusetts has at one time heard a valued employee say: ‘I love working for this company, but my family can’t afford a house here,’” Thompson said in a statement. “AIM looks forward to working with the Healey-Driscoll administration and the Legislature to ensure those conversations become a thing of the past.”
Massachusetts Fiscal Alliance spokesman Paul Craney said the bill includes state borrowing when interest rates are high, a prospect that “will only make Massachusetts more unaffordable to the taxpayers who have to pay it all back.”
“If Healey wants to make housing more affordable, she needs to call on President Biden to lower interest rates, she needs to provide a way to lower property taxes, she needs to reverse the arbitrary green mandates which limit consumer choice and penalizes affordable energy options,” Craney said in a statement.
The Healey administration said the $4.1 billion bond bill will help create more than 40,000 homes, including 22,000 for low-income households and 12,000 for middle-income households.
Housing is the single biggest challenge facing residents across Massachusetts, Healey said, pointing to “vital signs” like vacancy rates and home sales that she said do not indicate a healthy market in Massachusetts.
“Across the board, people are feeling the pressure of the high cost of housing. It’s impacting and adding to stress in people’s lives. And it’s also affecting in very real ways whether or not people are going to stay in Massachusetts. High housing costs are hurting people, and they are hurting our great state,” Healey said at an event in Chelsea Wednesday morning.
Healey wants to give municipalities a revenue stream to build affordable housing in the form of a transfer tax between .5% and 2% on the portion of property sales over $1 million, or the county median home sale price. Local legislative bodies or housing authorities could adopt the tax by vote.
It’s an initiative that many local leaders have backed, including Mayor Michelle Wu, who said Wednesday that she is “grateful” to the Healey administration for empowering local communities with tools “we urgently need to take action across the commonwealth.”
“From doubling our funds for affordable housing by enabling a modest transfer fee, to supporting office-to-residential conversions and accessory dwelling units, these proposals match Boston’s plans to move on all fronts for more housing and more affordability,” Wu said in a statement.
But not all are on board with the real estate transfer tax, including the Greater Boston Real Estate Board, which also opposes a separate transfer fee proposal Wu filed on Beacon Hill that lawmakers heard last week.
Doubling spending and advancing policies to develop state-owned land “will lead to the creation of more housing units,” Greater Boston Real Estate Board CEO Greg Vasil said in a statement. But there are “deep concerns” about the inclusion of a “sales tax on real estate,” he said.
“It’s an unstable source of revenue that would cause more harm than good at a time when people and businesses are leaving the state because it is just too expensive,” Vasil said.
The proposal shuttles $1.6 billion to repair, rehabilitate, and modernize more than 43,000 public housing units, including $150 million to start “decarbonizing” public housing through the installation of heat pumps and electric appliances.
Another $200 million is set aside to support alternative forms of rental housing for people experiencing homelessness, housing for seniors and veterans, and transitional units for people recovering from substance abuse. The bill does not address rent control, a measure that is also being pushed at the state level through a ballot question.
Greater Boston Interfaith Organization Chair Rev. Burns Stanfield said the housing bond bill is an “expansive step” toward addressing a housing crisis in Massachusetts.
“$1.6 billion allocated to the capital needs of state-funded housing authorities will make a tangible difference in restoring our housing supply to a dignified state, and the real estate transfer fee provision will open up many new opportunities for our communities to invest in developing affordable units,” Stanfield said in a statement.
