Mayor Marty Walsh’s administration has announced a five year $500 million investment in affordable housing, but a vital revenue stream needed to fund the investment isn’t a sure thing.
The administration has proposed a transfer tax of up to two percent, which according to Chief Financial Officer Emme Handy would generate “something like in excess of $100 million,” if the Massachusetts legislature approves the maximum two percent tax.
Handy declined to speculate on any alternative funding sources they can turn to should the legislature not approve the tax, saying “we feel confident that it will.”
Handy didn’t provide a direct answer to the transfer tax question at a roundtable held for reporters at City Hall on Jan. 6, nor did she reply to an email from Spare Change News requesting comment on any potential contingency plans in place to ensure the money will be available to invest in housing if the Massachusetts legislature doesn’t approve the transfer tax.
The administration also plans to raise money for the investment through the sale of the Lafayette Garage in Downtown Boston.
According to the administration, the City currently spends about $20 million per year on housing programs, and they plan to double that number to $40 million beginning in fiscal year 2021. Money will also be provided through the Inclusionary Development Policy, the Neighborhood Housing Trust, the Community Preservation Act, and federal grants.
The administration outlined a number of initiatives it plans to fund with the investment, including a voucher program for renters, which will provide assistance to homeless families who don’t qualify for emergency assistance from the state, people who used to be chronically homeless, and “extremely low income” elderly and disabled people.
The administration did not specify how many people would receive the vouchers or exactly how much money would be allocated for them, saying only that it would “provide hundreds of city-funded vouchers to those with the most need.”
The administration did not specify what level of income they believe constitutes “those with the most need.”
In addition to the voucher program, the administration plans to “create and preserve” 1,000 units of affordable housing, and expand the Acquisition Opportunity Program, which provides money for buying market rate properties and converting them to affordable units. The city is also aiming to construct homes to be sold to low and middle income residents, and will provide financial assistance to first time home buyers who need help with down payments.
Walsh said in a statement that the City of Boston is funneling more money to housing at a time when the federal government has been doing less and less for those who are most in need.
“Housing is the biggest economic challenge our residents face,” Walsh said in a statement. “We know we have been making progress, but rents and home prices are still too high for too many people. These investments are transformative and I invite housing advocates and residents to help us bring them to life. At a time when our federal government is stepping down in creating and preserving affordable housing, Boston stands firm with our belief that housing is not a commodity, but our community.”
The plan did not address any possible legislative solutions such as rent control, however Walsh has previously spoken out in support of a bill currently before the Massachusetts legislature that would reestablish rent control in Massachusetts, after it was abolished in 1994.
While more money for housing is welcome and needed, if landlords are allowed to raise rents by hundreds of dollars every year, those vouchers won’t go very far.
A rent control bill was submitted to the legislature in 2019, and there will be a hearing on it Jan. 14, 2020 before the joint committee on housing. There will be a rally outside of the State House at 1p.m. in support of the bill.