Governor Charlie Baker said on Thursday that he is unlikely to support a proposal from Boston Mayor Michelle Wu to impose a new fee on high-dollar real estate transactions to fund affordable housing.
“As a general rule, I don’t support these sorts of things, and I especially wonder why we’re doing this at a point in time when we have billions of dollars available to us to spend on housing,” Baker said, referring to the stockpiles of federal COVID relief dollars available to state and city government. “The city of Boston has hundreds of millions of dollars available to them to spend on housing.”
His comments, made during an interview on GBH News’ “Boston Public Radio,” came a day after the Boston City Council approved a new 2 percent fee on real estate transactions above $2 million. It requires approval from state lawmakers before it can go into effect. According to city estimates, the fee would have raised nearly $100 million last year, enough to more than double Boston’s affordable housing budget at a time when many residents say housing is their top concern.
Wu has said that new revenue would be a “game changer” for Boston. And she has emphasized the importance of creating a sustainable funding stream for affordable housing, as opposed to relying on the one-time influx of federal cash available to the city now.
“We’re hoping that the amended language and this moment of recovery after the pandemic gives us a new window to be able to advocate for passage,” she said on Wednesday. “The interest is there, the appetite is there, the need is certainly there.”
Baker’s opposition is an early hurdle for a policy that already faced plenty.
It’s not the first time Boston has asked the Legislature to approve a transfer fee for affordable housing. But state lawmakers have never backed the policy, either for Boston or for the numerous other municipalities that have also sought permission to impose such a tax. Home-rule petitions on any number of issues routinely die quiet deaths in the hands of the Legislature.
But some on Beacon Hill believe Boston’s transfer fee now has its best chance yet. Wu and her allies hope that the new administration’s political capital, as well as some new additions she has made to the policy, will push the idea further than it has gone in the past.
Baker’s opposition is an obstacle, but not necessarily a death knell, for Wu’s proposal. Should they support Boston’s transfer fee, Democratic lawmakers have the votes in both the state House and Senate to override a veto from the Republican governor.
Baker, a former local official in Swampscott, said he typically supports home-rule petitions from municipalities across the state.
“It’s very unusual for us not to,” Baker said. “This is an exception.”
In 2019, Baker himself proposed a real estate sales tax hike to fund climate programs, though the Democratic-led Legislature never took up the legislation.
During the radio interview Thursday, Baker distinguished between that proposal and Wu’s, saying he had proposed a much smaller increase to an existing tax.