Housing crisis needs all hands on deck

From Boston to Nantucket the crunch is real, it’s painful, and it demands solutions.

Moody Street in Waltham. Waltham is exploding with new job growth as tech and life science companies are moving in, but they're building very little housing and fighting off affordable housing developments.Lane Turner/Globe Staff

Don’t take prosperity for granted. Massachusetts is fortunate to have a growing economy, but its ability to house the workers and families who are at the core of maintaining that growth continues to worsen. The demand for housing that ordinary families can actually afford in a tight market is a looming problem for the communities around Greater Boston and elsewhere in the Commonwealth.

That’s why everyone needs to take one for the team when it comes to the housing crisis: it’s a shared responsibility of the private sector and government. The latter needs to lay out the rules for development in a way that encourages market-rate housing, while also subsidizing affordable housing for lower-income families. The former may need to chip in a little more to help pay for it.

Boston Mayor Marty Walsh in his State of the City message on Tuesday put it this way: “Housing is the biggest economic challenge our residents face . . . We know we have been making progress, but rents and home prices are still too high for too many people.”

He pledged an additional $500 million over the next five years, doubling the city’s current contribution to affordable housing. But to do that will require approval of a home rule petition on Beacon Hill that would allow the city to collect an additional 2 percent fee on the transfer of real estate valued at more than $2 million. Beacon Hill hasn’t always been eager to allow communities that kind of leeway: Similar proposals from Somerville and Nantucket were left to languish during the last legislative session.

Meanwhile, the housing market in Boston, Somerville, Newton, and Quincy, keeps getting hotter. For example, the value of Boston’s taxable property hit a record high of $164 billion in the last fiscal year, according to the latest study by the Boston Municipal Research Bureau. While most of the tax burden fell on businesses, that’s up 78 percent from 2013. During that same period the unemployment rate in the city dropped from 6.1 percent to 3 percent and nearly 40,000 people moved into the city.

Sure, many of the newcomers are now in those gleaming new towers in the Seaport District, but just about anything within the city limits is in greater demand. The resulting bidding wars put housing largely out of reach to those not making a six-figure salary.

Creating a pool of money in communities like Boston to build more housing affordable for the families who grew up here and want to stay — as well as newcomers without lucrative jobs — is essential not only to a city’s growth, but to its soul.

One vehicle for raising revenue is the home rule petition Walsh signed recently, which city officials estimate could have raised $169 million a year over the prosperous past decade. There are no guarantees of similar boom years ahead, but surely that $100 million per year figure the mayor is looking for isn’t out of the question.

The prospects for Boston’s proposal are unclear, but there are signs that the Legislature might be more attuned to the housing crisis than in the past. During this abbreviated year (formal sessions are due to end July 31), House lawmakers are giving some indications that housing is definitely on their agenda, already advancing two bills on the House floor aimed at encouraging multifamily housing and “smart growth” around transportation hubs.

Some legislators are also eyeing transfer taxes like the one Walsh wants — but their effort simply goes too far. A bill that would allow any community to pass a transfer tax to fund new affordable housing was introduced last week with the support of lawmakers from Somerville, Concord, Brookline, and the Cape and Islands in addition to Boston and a host of housing advocates.

That legislation provides communities with the option to impose the kind of targeted tax Boston has in mind — but it also creates opportunities for municipalities to overreach. Its chief flaw is that it would allow towns and cities to set the bar for a transfer fee far too low. By allowing for a threshold as low as the statewide median home price, it could hit property selling for as low as $400,000. That means it could raise housing prices for exactly the kind of first-time home buyers who are already having trouble finding property they can afford. The truth is Massachusetts needs more affordable housing that’s subsidized by the government, but it also needs more housing that’s affordable. Making market-rate housing for middle-class homeowners more expensive to pay for subsidized housing for the poor doesn’t make sense. It should be levied only on truly high-end properties, as Boston’s bill proposes.

While Beacon Hill should let communities get creative to solve their housing problems, proponents of the statewide local option transfer tax need a reality check. Legislators should strike a balance, finding a way to let towns and cities generate revenue for affordable housing that doesn’t send home prices spiraling upward.