The Boston City Council gave initial approval Wednesday to a proposal to offer property tax breaks to landlords who choose to keep their rents affordable — a policy that also happens to be the centerpiece of Josh Kraft’s housing platform as he seeks to unseat Mayor Michelle Wu.
Councilor Gabriela Coletta Zapata, who sponsored the legislation, brought it up for a vote at the end of the council’s regular Wednesday meeting. The council voted 10-0 to approve the measure, with two councilors absent.
The order would allow Boston to opt in to a relatively new state law allowing municipalities to offer tax breaks to landlords who rent their units at a federally determined affordable rate. The landlord would also have to rent the unit to a person whose income is below a certain amount, to be decided by the city.
The Massachusetts State House passed the legislation as part of its 2023 tax package, according to Coletta Zapata. State Senator, and former Boston city councilor, Lydia Edwards, who Coletta Zapata used to work for, was one of the original sponsors of the proposal.
In mid-January, amid growing concern about the impact of property tax hikes on city homeowners, Coletta Zapata filed the measure, which would make Boston the first community in Massachusetts to opt in to the tax break program. Councilors considered it in a hearing on Jan. 27, along with three other property tax proposals, including Wu’s refiled property tax home rule petition.
When she brought the measure up for a vote Wednesday, Coletta Zapata argued it is one tool the city can use to try and offer relief to homeowners struggling with higher taxes due to rising home values and sagging commercial property tax revenue. She referenced one elderly woman in East Boston, who bought her home in the 1970s and rents her first floor to a young family at a below-market rate.
“The recent increase in property valuations has pushed her over the threshold of monthly expenses, and she is in need of immediate relief,” Coletta Zapata said. “She does find herself at an impasse: Does she raise rents and potentially displace this family ... whom she knows can’t afford an increase, or does she live on a tighter budget?”
Now that the council has given its initial approval, the measure will go to the mayor’s office to draft details of the policy, including the amount of the tax exemption, what rents the city will consider “affordable,” income restrictions for participating tenants, and any other eligibility restrictions the state law requires. The council will then have to vote again to approve the final version.
Kraft, who formally launched his campaign to challenge Wu last week, is promoting a very similar policy as part of his housing platform, referring to it as a version of “rent control.” On Tuesday, he released details of the plan, which would offer a 20 percent break on property taxes for 10 years to landlords who agree to cap rent growth at up to 10 percent per year, for tenants who earn up to twice the region’s area median income (or nearly $294,000 for a three-person household).
In an interview with the Globe Thursday, Coletta Zapata refuted the idea that she offered the proposal or pushed it forward in an effort to undercut Kraft’s proposal. She said that Edwards drew her attention to the state law when it passed in 2023, and she and her team have been thinking about proposing that Boston opt in since last year.
And Coletta Zapata noted that she filed the legislation, and the council debated it in a hearing, in January, well before Kraft officially announced his campaign or unveiled his proposal. It’s more tied to the long-running discussions about the city’s post-pandemic tax base.
“Right now we’re having this conversation of what we can do to provide direct relief” to property owners, she said. “We just passed this extensive and fiscally responsible tax classification; this is a part of that discussion.“
“I have not looked at Josh Kraft’s proposal in detail, but I do know that some of it resembles this good landlord tax abatement that has already been passed by the state,” she continued.
A spokesperson for Kraft’s campaign argued that the timing of the council’s vote was not a coincidence.
“Josh has been a candidate for mayor for just over a week, and this is the second instance where city government is moving to adopt his policy ideas,” a Kraft campaign spokesperson said in a statement. “Mayor Wu announced a review of bus and bike lanes, and [on Wednesday] the Boston City Council fast-tracked action on Josh’s opt-in rent control plan. Unfortunately, the Council’s proposal does not go far enough to help people.”
More properties would be eligible for the tax break under Kraft’s proposal, the spokesperson said, because it has a higher income limit for renters who could participate in the program. The policy the council approved Wednesday limits eligibility to renters who make up to 80 percent of the region’s area median income, however, Coletta Zapata said that could change as the mayor’s office and the council refine the proposal.
In a statement to the Globe, Wu thanked Coletta Zapata and Edwards for pushing the measure on the city and state levels.
“We look forward to shaping the parameters of this program to balance relief for landlords supporting affordability with sound fiscal management for the city,” Wu said in the statement.
But on Wednesday, on GBH’s “Boston Public Radio,” Wu slammed Kraft’s proposal, calling it “fake rent control,” and a “distraction” from efforts to address the city’s housing crisis, arguing it will do little to make housing more affordable.
“This program, a voluntary program, is not going to capture or protect against the worst offenders,” she said. “What it will do is take those who are already in the space of wanting to be good landlords and reward them, and give them tax dollars and a tax break. But it is a use of resources without offering the types of protections that we really need.”
Niki Griswold can be reached at niki.griswold@globe.com. Follow her @nikigriswold.