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THE ARGUMENT

Should the state allow municipalities to charge an up to 2 percent real estate transfer fee to support housing?

YES

Pamela Hallett

Executive director, Housing Corporation of Arlington

Pamela Hallett
Pamela Hallett

As most people are aware, there is a crisis in housing in Massachusetts. There are not enough rental housing units to meet the increasing demand. This significant demand has pushed rental rates to extreme highs, making units unaffordable to many residents.

In a 2018 study by the National Low Income Housing Coalition, named “Out of Reach,” there is no state in the country in which a two-bedroom rent is affordable to an individual working 40 hours a week at minimum wage. In 2020, a separate study by the coalition, “The Gap,” showed for every 100 extremely low-income households in the Commonwealth there are only 46 affordable units. On a more local level, my organization, Housing Corporation, has a waiting list of over 500 households for the 102 affordable units we own and manage in the town. Clearly something must be done.

To develop affordable housing takes many sources of federal, state, and local funding, in conjunction with equity investments and bank loans. Currently there is not enough funding to solve this crisis. The proposed local option real estate transfer fee -- which would be charged to the seller of any property above the statewide median sales price of a single-family home -- is one more potential funding source, and we ought to put it in place.

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Under the legislation, revenues from the transfer fee could be used only for affordable housing. The amount of the fee -- ranging from .5 percent to 2 percent -- would be decided by each municipality that chooses to adopt the charge.

The fee would generate significant annual revenue to fund new affordable units In Arlington, discussions about the town’s possible adoption of the fee -- if it becomes available -- have weighed heavily towards a .5 percent fee. Most Arlington sales are by homeowners who may sell a building only once or twice in their lifetime. Therefore, the fee would not be overly burdensome. Those who make their living buying and selling property would be more affected, but typically they make a very good income and could afford to support the creation of more affordable units.

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This fee would help make housing more equitable.

NO

Barry Crimmins

Stoughton resident; real estate attorney, partner in land use permitting and consulting business

Barry Crimmins
Barry Crimmins

There is no question a shortage of affordable housing exists in Massachusetts and while I’m generally in favor of any way to expand the supply, this proposed funding mechanism is not the way to go at this time.

The proposal to support affordable housing with a fee of up to 2 percent on real estate sales above the statewide median price for single-family homes might sound commendable. But is it fair to ask buyers and sellers of houses to foot the bill for a common good, as opposed to the community in general? I believe the answer is “no.”

Although it’s two decades old, the Community Preservation Act of 2000 was established, in part, to accomplish much of what this new transfer tax initiative proposes. The local option law enables cities and towns to raise revenue to create a local dedicated fund to preserve open space, renovate historic buildings, build or refurbish new parks and playgrounds, and help expand affordable housing. For the past 20 years, CPA funds have been raised in communities adopting the law, which provides for an up to 3 percent surcharge on local property taxes.

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Should we assume that those with the means to buy a home costing more than the median of approximately $400,000 should have no problem adding to their city or town’s affordable housing coffers? That’s a pretty high-priced assumption, particularly in light of the current economic landscape when investments are tanking, savings are dwindling, and jobs are being lost. Some people already in the process of purchasing a house prior to the novel coronavirus crisis are probably in a financial limbo -- caught between wanting (or needing) to move forward and thinking they’re better off turning back.

I agree that more affordable housing is needed in the Commonwealth. Housing insecurity will not fade as long as rents continue to rise and wages don’t. Yes, many hard-working families are struggling to find quality affordable housing, but should the mechanism to salve the struggle be borne on the backs of equally hard-working families with the means to purchase the house of their dreams? Maybe someday -- but not today.


As told to Globe correspondent John Laidler. To suggest a topic, please contact laidler@globe.com.