Somerville BOA Unanimously Approve Home Rule Petition For Real Estate Transfer Fee

By Matt McLaughlin

The Board of Aldermen unanimously approved a Home Rule Petition for a Real Estate Transfer Fee tonight.  I plan on canvassing the neighborhood to explain the final bill, but I want to dispel misinformation I routinely hear.  This is a simplified version but I am happy to go into detail for anyone interested.

The proposed transfer fee is a one percent fee on real estate transactions in Somerville. The money will be used for affordable housing in Somerville.  This fee will not apply to any owner occupied units. It will not apply to sellers or buyers who live in Somerville. Family transactions and inheritances will also be exempt.

So who will pay the fee?:

The only people that will end up paying this fee are developers, speculators, home flippers, multiple property owners and individuals who own properties that do not live in the city.

Can’t the law be changed at any time?:

The only aspects of the bill that can be changed is if the city decides to allow more exemptions, not less. I know this because I was the one that inserted the language.  In order for any substantive changes to be made it would have to go through the same rigorous process this bill will, which requires approval from the state legislature and the governor. After spending more than a year and a half on this, I can state confidently that no one would want to go through this process again to make changes.

There was no public process:

I have never taken part of a more rigorous process for anything in my time on the Board.  Zoning, budgets, the High School, the Green Line, none of these processes were as through as this. We held two public hearings, published the hearings in all newspapers and televised them. We met in committee longer than I’ve ever spent on any city legislation. Some people said they wanted a city wide mailer to all property owners, excluding renters.  The Board requested the city use mail and reverse 311 to notify residents, which they declined. To be fair, they stated that they have not done that for any other public hearings, and the two hearings were so well attended the message clearly got out.

Additionally, this is still just the beginning of the process.  The Home Rule Petition still has to go to the state legislature for approval and then the governor.  There will be yet another public hearing at the state level.  If this petition somehow gets through that process, it will return to the Board where we will codify it into an ordinance.  Only then do we even get to talk about implementing the fee.

Why don’t you make the developers pay?:

At this point the developers are some of the few people who will pay.  There is no exemption for them and when they do pay it will be substantively larger fee than an individual home purchaser.

I support affordable housing, but not like this. Do something different:

I have heard this mantra for the last decade of my life. There is someone at every attempt to address affordable housing who says to take another path. I will take any and all routes to preserve affordability in this city.  Critics suggested that we regulate condo conversions and Air BNB’s, pass a revised zoning code, make budget cuts and use the general fund for housing, hold developers like FRIT in Assembly accountable, that Tufts and Partners should pay more.  Anyone paying attention knows that I have been at the very front of all of those fights. I will do all of the above, and expect the same resistance that we got from the transfer fee.

Who gets the affordable housing?:

Somerville residents and people who work in Somerville get preference, so long as it abides by housing law.  State and federal laws limit residential preference due to historic discrimination in affordable housing.  This bill takes into consideration the needs of Somerville residents, but also respects the law

This is a regional problem that requires regional solutions:

Yes, this is indeed a regional, and even a national and international problem. Unfortunately we are essentially on our own to solve this problem. The state government refuses to take substantive action on affordable housing, and may likely kill this bill as well.

The federal housing department does not believe in money for affordable housing.  This Board and I were elected to address affordable housing, not make up excuses.

We will lead the way as a national model rather than wait for others to act.

This is just one of many ways to address affordable housing. In my mind a one percent fee on interests that don’t live in the city and have reaped massive benefits from an out of control market is more than reasonable.  Unfortunately every attempt at affordable housing is met with massive resistance from special interests who manipulate people understandably mistrustful of government. There is a reason nothing has been done about the affordability crisis.  I voted in favor or this effort and will support any and all efforts to preserve the city that I love.

5 thoughts on “Somerville BOA Unanimously Approve Home Rule Petition For Real Estate Transfer Fee”

  1. I was at one of the hearings where someone stated that 30 percent of the units would go to out of towners. Is that the case?

  2. I already sent my e-mail to Governor Baker asking him to oppose this and many of my neighbors will do also.

  3. It’s so nice to see the wishes of the people supported. But apparently not here it is not. What is it they do not get? They are our employees. We would be fired from our jobs doing this. It is always so disappointing that once again they have failed the people of Somerville.

  4. No mention of the actual problem: which is supply of housing. I still don’t understand how we are going to have more affordable housing without actually having more units available. A LOT more. I find it incredible that we are stuck with vague “it’s for affordable housing” statements without specifying in what form that affordable housing will be provided. Rental? Sold? Apartments? Houses? Large projects? Be specific!

    Instead this just looks like what it probably is: a way to slow down development *which benefits existing owners by limiting new housing development*. Similar to the totally bizarre new rule against converting two families into three families. Folks: we need many more smaller and affordable units on the market, not fewer, larger, more unaffordable units. SMH. I know I and many friends grew up in <800sf apartments. On what planet do we need to preserve 1500 two floor mega-condos "for families?" And why are we wasting time on this around-the-margins stuff, anyways?

    An actual major long-term problem in Somerville is that we have ACRES of single-story garbage up-and-down our major arteries. Look around Davis, Union, Ball, Magoun, and up and down our major commercial roads: Broadway especially. What you see are single-story garbage buildings–some with HUGE parking lots around them. It's time to start charging A LOT more in taxes on land–particularly parking lots, and less on square footage of buildings (which punishes building taller and denser). This would encourage mixed-use development of parking lots and single-story buildings into something useful and tax-generating. This is a real problem that requires research and thoughtful planning, but will reward us with an urban fabric that will last for a century or more. Instead, we are talking about nit-picking around the edges because that's politically easy.

    I'm not against paying more in taxes in order to allow families to afford to stay in Somerville. Together with a real understanding of successful urban building patterns and a plan to implement them, this tax could be fine. But taken alone, this reeks of existing homeowners wanting to slow development to preserve the value of their own houses. Immoral and counter-productive.

  5. Hey Matt, An exception should have been made for a mailing to go out to taxpayers as many are still in the dark on this tax. I am a third generation Somerville resident who loves this city too but am deeply concerned about its future. Your previous drafts were a mess when you tried to push the transfer tax through as a result created mistrust from residents when you considered taxing long time resident landlords before you made us exempt. Where is this money going? Has anyone thought the repercussions through? You may want to google Henry George…he got it right. When landlords find out about this tax they will raise their rents. How is going to help the affordable housing crisis? Increase the housing stock..Its common sense. Also I find it very insulting that you address us who spoke at city hall as the “Boston accents”. Time will tell with all the results from the poor decisions especially tax increases. Changes need to be made and we hope people vote next election.

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