Cheers for housing, jeers for tax
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 as high costs of housing and living push people out of Massachusetts 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, adding that “reasonably priced housing” 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.
Massachusetts Fiscal Alliance spokesman Paul Craney said the bill boosts 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 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.
“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,” Healey said at an event in Chelsea.
Healey wants to give municipalities a revenue stream to build affordable housing in the form of 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 Boston’s Mayor Michelle Wu.
But not all are on board with the transfer tax, including the Greater Boston Real Estate Board.
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,” Vasil 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.