Mayor Michelle Wu on Tuesday signaled a series of moves that — if enacted — would significantly increase funding for affordable housing in Boston while potentially imposing caps on how much landlords can raise rent on tenants.
In a City Hall news conference, Wu said her administration is launching efforts to expand two programs that require developers in Boston to help create affordable housing, and will form an “advisory group” to study rent control — or rent stabilization — with an eye to filing legislation on Beacon Hill by early 2023. She also plans to revive efforts to create a tax on high-end real estate sales, with the proceeds set aside to fund affordable housing, and will conduct an audit of city-owned real estate to look for opportunities to build more.
Taken together, the moves lay out Wu’s strategy to tackle Boston’s long-running housing crisis. It puts more of a focus on affordable housing than former Mayor Martin J. Walsh did. His administration oversaw a historic building boom, but faced mounting criticism that that new housing was too expensive for many residents.
“The cost of housing is among the biggest barriers to people being able to stay and thrive in our city,” Wu said. “It’s the No. 1. concern I hear from residents day in and day out.”
Wu and Housing Chief Sheila Dillon outlined plans to study hikes to both the city’s Inclusionary Development Policy, which requires housing developers to build or fund affordable units in new projects, and its linkage program, which sets a fee on new commercial and lab development to raise money for housing and job training. Next month, the city plans to hire consultants to launch feasibility studies, Dillon said, and plans to come out with formal proposals within 150 days.
“We want commercial development in Boston. The idea is to do it in a thoughtful way,” she said. “We are interested in getting as much from development as we can to help address our housing challenges.”
While details are yet to be finalized, Wu and Dillon suggested that the IDP could grow to require that 20 percent of units in new buildings be set aside at affordable rents, up from the current 13 percent, and that those rents could be set at levels more lower-income tenants could afford. It may also be expanded to apply to smaller buildings. Wu also suggested fees on commercial buildings — especially lab and life-science buildings sprouting across the city — could grow.
The city can change those programs on its own, either through city council legislation or executive orders. But bigger changes — such as assessing a transfer fee and imposing some form of rent caps — will need approval from Beacon Hill. Wu said Tuesday that she plans to start laying the groundwork for that now.
In January she plans to file legislation with the city council to create a transfer tax on expensive sales. A similar proposal in 2019 was passed by the council and signed by Mayor Martin J. Walsh, but as a home rule petition it still needed approval of the state Legislature, which did not enact it. Had it existed during Boston’s pre-pandemic real estate boom, it would have raised, on average, $169 million per year, according to city estimates.
Among those joining Wu on Tuesday was City Councilor Lydia Edwards, who last week won a Democratic primary for a seat in the state Senate. If she wins the general election next month as expected ― there is no Republican on the ballot ― Edwards vowed to help push that measure in the Legislature. She said the city and state need to strike a better balance between enabling development and providing housing for people who struggle to afford to live here.
“We are putting housing first,” said Edwards, who has long worked with Wu on housing issues on the city council. “It is not about developing this city. It is about housing people in this city. Those are not mutually exclusive but the balance has been off.”
A proposal to enact rent control — or “rent stabilization” as Wu has taken to calling it — and other tenant protections could eventually surface in Boston, and perhaps elsewhere in the state. Voters banned rent control in Massachusetts through a ballot measure in 1994, so undoing that would require approval by the Legislature and governor.
But Wu made rent control a key plank of her campaign for mayor, pointing to other cities and states that have enacted versions of it in recent years. And she has vowed to lobby Beacon Hill to free communities to decide for themselves on the issue.
But any formal proposal is likely at least a year off, and its fate may hinge on next fall’s gubernatorial election. Wu said she will create an advisory group to study the issue and recommend a proposal “with a goal to shape language for the next legislative session on Beacon Hill,” which begins in early 2023.
Even Dillon — who is now serving her fourth mayor as chief of housing — acknowledged the controversial waters the city is about to step into.
“I think it’s going to be the most sought-after committee we’ve ever had in this city,” Dillon said.