Mayor Martin J. Walsh announced he would commit $ 5 million, generated by the Commonwealth’s new short term rental law, to increase affordable housing opportunities and remedy chronic homelessness in Boston, as part of his 2020 (FY20) operating budget proposal.
As part of the short term rental law, Walsh plans to increase Boston’s Room Occupancy Local Excise Tax by 0.5 percentage – to 6.5 percent – for all lodging establishments, such as office spaces and hotels.
Justin Sterritt, Boston City Budget Director, said that the tax increase is necessary because the City of Boston has limited means to garner revenue.
“We are capped in our property tax and we have very limited revenue raising opportunities compared to other cities, like New York which has income tax and Denver, which has sales tax” said Sterritt. “This is an unique opportunity to maximize what we have under existing law for an important issue of the city.”
In the first year of the law’s implementation, $ 4 million of the tax revenue will be invested into creating 50 new permanent ‘supportive housing,’ which refers to the physical housings, rental subsidies, and supportive services. According to Marcy Ostberg, Director of Operations at DND, the city has housed 721 chronically homeless individuals through supportive housing so far, since the launch of Boston’s Way Home in 2016.
DND officials particularly emphasized the city’s increased assistance to homeless veterans.
The remaining $ 1 million will be invested into addressing youth and young adult homelessness. This $ 1 million will accompany Boston’s $ 4.9 million US Department of Housing and Urban Development (HUD) Youth Homelessness Demonstration Program grant, in helping homeless youth find job connections and rental assistance. Marty Martinez, Boston Chief of Health & Human Services, says that specific details will be clarified in a plan, which will be released in a few weeks.
The total Department of Neighborhood Development (DND) FY20 Budget is $ 125.5 million, including the $ 20 million Community Preservation Fund and Neighborhood Housing Trust (Linkage). $ 38.3 million is dedicated to Homelessness and Supportive Housing.
The budget includes a $300,000 investment for four formerly homeless individuals to help homeless people with housing applications, as peer housing navigators. $100,000 will be dedicated to the homelessness outreach services at Boston Public Library.
The budget also includes additional affordable housing provisions, such as an $650,000 investment into expanding the Additional Dwelling Units (ADU) program, which will provide income-eligible homeowners with zero-interest loans – up to $30,000 – to lease out space within their homes for occupants. The scope of the program will be focused in East Boston, Mattapan and Jamaica Plain.
One challenge to the effective implementation of the budget is the lack of information pertaining to displacement. Although the city tracks eviction data on a yearly basis, Sheila Dillon, Chief of Housing and Neighborhood Development, notes that there is a dearth of holistic information about displacement.
“We would love it if there was, but there is no data source that tracks displacement,” said Dillon.
The City’s FY20 budget was formally released on Wednesday, April 10. Boston residents can view it at budget.boston.gov.