The Housing Bank Transfer Fee Legislation Loses Again At The State House

JohnCarl McGrady •

IMG 0647 e3a40f7172c3e2402cbe8afa5c931de5
A transfer tax on high end real estate transactions, which Nantucket has sought for more than a decade, would go to fund affordable housing projects like the ongoing affordable apartment project on Fairgrounds Road.

Cape and Islands Senator Julian Cyr has withdrawn an amendment from the Senate’s Housing Bond Bill that would have reinstituted a controversial measure allowing a local option for a transfer fee on real estate transactions to fund affordable housing, all but guaranteeing the proposal, which Nantucket has championed for years, will not be adopted this year.

Cyr spoke in favor of the amendment during Thursday’s meeting, but ultimately withdrew it without a vote.

“We are doing a lot in this $5.2 billion bill here but the Commonwealth can’t finance all of our housing needs here,” he said. “This is an amendment I really wanted to put forward to show the scope of what’s possible here, how we could harness a luxury transfer fee to work for certain communities.”

This is a route he has taken before, and one some local advocates of the transfer fee, including former Nantucket Housing Director Tucker Holland, have been skeptical of. It is common practice for legislators to withdraw amendments that will not pass to avoid a negative vote being taken. This may have been the impetus for Cyr’s decision to withdraw the amendment Thursday after the Joint Committee on Housing endorsed a version of the bill without a local option for a transfer fee.

Advocates of the transfer fee, which would allow municipalities to impose a small tax on real estate transactions over $1 million to fund affordable housing, had their hopes raised last fall when Healey unveiled a housing bond bill that included the fee. But both the House and now the Senate opted to exclude the provision.

Local housing advocates had been optimistic that an amendment to the bill might have been able to pass Thursday. It is still possible that the transfer fee could be added back into the bill during negotiations between the House and the Senate, as the two legislative bodies passed different versions of the bill, but it seems unlikely, as neither version contains the local option.

Healey's bill would have allowed municipalities and regional affordable housing commissions to adopt a transfer fee between 0.5 percent and 2.0 percent on real estate sale proceeds over $1 million or the county median home sales price, whichever is greater. The fee would be required to be used for affordable housing development. It is a concept first floated by Nantucket more than a decade ago, and now supported by communities across the state, including Boston.

“A luxury real estate transfer fee has broad support, evidenced by the nearly twenty municipalities that have sent us home rules requesting it,” he said. “Two-thirds of the states have transfer fees on luxury real estate transactions.”

But the Massachusetts Association of Real Estate Brokers, among other groups, has lobbied hard against the legislation. Although Nantucket passes the local option transfer fee as a home rule petition at Town Meeting every year, it cannot go into effect without state approval, and the legislature has repeatedly stymied Nantucket’s efforts. It is likely that the fight for the transfer fee will continue in the next legislative session.

Loading Ad
Loading Ad
Loading Ad

Current News