Back in September, Boston Mayor Michelle Wu expressed her frustration to the Greater Boston Chamber of Commerce at how higher interest rates were preventing construction from starting on thousands of housing units that already have city permits. City Hall, she said then, was strongly considering a tax incentive program to jump-start many stalled projects.
Developers saw this as a welcome change following Wu’s push for rent control and a transfer tax, not to mention higher environmental and affordable housing standards. Eventually, the word around town was that Wu would unveil tax incentives at her State of the City speech in January. Nope.
Last fall, the mayor did launch a tax break program to spur conversions of older downtown office buildings to housing. So far, City Hall has received six applications, totaling nearly 220 housing units.
But developers are eager for a more expansive set of incentives, to get new construction going. After the State of the City didn’t pan out, they pinned their hopes on the mayor’s annual speech to the Boston Municipal Research Bureau, a budget watchdog group.
But when Wu delivered the speech on Thursday, it was more bad news.
Wu touted her controversial proposal to ask the state Legislature for permission to hike property tax rates on commercial properties — a move aimed at protecting residential taxpayers from taking a hit due to declining values of downtown office towers.
And then she talked about how her administration worked with Harvard professor Edward Glaeser to analyze the housing tax incentives she floated last year. In the end, they deemed that interest rates remain too high for tax incentives — at least ones the city can afford — to make much of a difference. Forgoing many years of future tax revenue for the program, Wu said, isn’t in the best interest of the city’s residents right now.
“Some of you have been in the room with us as we have weighed every option and explored what levers we might be able to pull,” Wu told the crowd. “I know all of you feel the complexity involved in exploring something like this.”
Might the Wu administration reconsider at some point? Many developers have apparently given up.
“The impression many people took away from the speech ... is that door has closed,” said Tamara Small, chief executive of the NAIOP Massachusetts trade group. “It’s death by a thousand cuts, that’s kind of how it’s viewed.”
This is an installment from the Globe’s weekly Bold Types column, which runs in print each Tuesday.
Jon Chesto can be reached at jon.chesto@globe.com. Follow him @jonchesto.