Medford is looking to become the latest Massachusetts municipality to send a home rule petition to the State House to enact a tax on “high-end real estate deals.”
Backers say the measure would address the city’s affordable housing “crisis,” but the idea is not sitting too well with residents. Some engaged in a shouting match with city councilors during a meeting last week.
Eighteen cities and towns across the Bay State are already waiting for action from the state Legislature on their own “real estate transfer fee” proposals, a concept aimed at spurring affordable housing production.
Medford could become the next municipality to join the group after the City Council requested a subcommittee to develop a home rule petition on the measure.
The city, of more than 60,000 residents, needs to build 671 more affordable housing units to meet a state requirement that at least 10% of its housing stock be affordable, said Matt Leming, a councilor behind the push.
Leming highlighted how the tax wouldn’t likely affect older residents and “average homeowners” as it would target “high-end real estate deals.” That generated boos and sighs from residents in attendance.
“We need more revenue streams in order to build up any sort of corpus of money that can be dedicated to affordable housing,” Leming said. “Residents are being priced out of the city, and we need to more actively engage in that.”
Nearby cities and towns that have passed legislation seeking to enact a real estate transfer fee include Arlington, Brookline, Cambridge, Boston, Concord and Somerville.
Boston Mayor Michelle Wu is trying to impose a 2% tax on real estate sales that exceed $2 million, with the seller incurring the fee and proceeds payable to the city.
Officials would then deposit the money into a neighborhood housing trust, for the purpose of furthering housing acquisition, affordability, creation and preservation, and senior-homeowner and low-income-renter stability.
Medford City Councilor George Scarpelli, calling the council’s exploration of a transfer fee “offensive,” said the city has dug itself in its hole by stopping multiple affordable housing projects under Mayor Breanna Lungo-Koehn’s administration.
Scarpelli added how his father worked “very hard” to build a two-family home on Paris Street that is now worth $1.2 million. “Why should a penny of those people’s hard-earned money go to any tax?” he said.
“These renters that live in these condos that are being moved out, we understand that,” Scarpelli said, “But unfortunately, that’s what happens when things prosper. This is what happens when you live near Boston.”
Gov. Maura Healey wants to add a real estate transaction fee of 0.5% to 2% on the portion of a property sale over $1 million, or the county median home sale price, with the revenue generated from the fee directed to affordable housing development.
The governor’s request is part of a $4 billion bond bill her administration released last October. The fee, projected to affect fewer than 14% of all residential sales, would be paid by the seller of real property.
If approved, a city or town’s housing board or legislative body could adopt the fee by a majority vote.
The Greater Boston Real Estate Board has shot back against Healey’s proposal, testifying last fall that “the real estate market is highly sensitive to economic downturns and is an unstable source of revenue.”
Tensions rose at the Medford City Council meeting when Councilor Emily Lazzaro highlighted how the cost-of-living in the region has increased the number of guests needing services at the Malden Warming Center, a seasonal homeless shelter where she works as an assistant director.
Residents started talking over Lazzaro, and President Isaac “Zac” Bears told them to “just show basic decency.”
Lazzaro became choked up while talking about how the city needs to find “diverse streams” for affordable housing, with one resident telling her to “be descript.” The councilor, in her first term, shouted at the crowd, “Sorry, you guys have been so horrible tonight. You’ve been so offensive to me. … I’m doing my best here to try to help poor people. I don’t understand.”
A shouting match ensued before Lazzaro left the meeting for a break, a resident yelling at her: “It comes with the territory. If you can’t take the heat, get out of here.”
