Study Highlights Alternative Ways Massachusetts Should Confront
the Housing Crisis
WASHINGTON, May 13, 2024
/PRNewswire-PRWeb/ -- Cities and towns implementing new real estate
transfer taxes will lose as much 60
cents for every dollar in new taxes collected while further
driving down local property values and doing little to solve the
state's housing crisis, says a new report authored by
the Greater Boston Real Estate Board and Building Owners and
Managers Association (BOMA) International, with research assistance
from the Tufts University Center for
State Policy Analysis.
"As this report shows, an increase in
transfer taxes would have a devastating impact on commercial
properties, and that would negatively affect local businesses and
all of the jobs and revenue they generate. Particularly as local
economies continue to emerge from the pandemic"
Indeed, the research finds, a 2 percent tax on real estate sales
last year would have produced an offsetting loss of nearly
60 cents for every dollar collected,
a dramatic inefficiency in the proposals put forward by
Boston and other communities, the
report found.
"Massachusetts needs meaningful
solutions to the housing crisis and this research should tell the
Governor, legislators and local leaders that new taxes won't work,"
said Mike Edward, Chair of the
Greater Boston Real Estate Board and President of Perry CRE. "The
Commonwealth must avoid passing misguided policies like transfer
taxes and instead focus on workable solutions that promote new
housing, reduce red tape and ensure the entire Commonwealth
participates in a stronger housing future."
The report, "Empowering Cities and Towns to Tackle the Housing
Shortage," highlights the negative impacts transfer taxes would
have on the region's residential and commercial real estate
markets. The report notes how, for every one percentage point
increase in the transfer tax, sales decline by seven or eight
percent. Citing a study previously conducted by the city of
Boston, "Empowering Cities and
Towns" discusses how a one percent transfer tax lowers prices by
one percent. Even when real estate sales are thriving, a
Massachusetts community with a two
percent transfer tax would lose 43
cents for every dollar they expect to raise.
The report lays out a detailed roadmap of housing solutions
which will support our state's housing needs without further
impacting the economy or creating an urban death spiral in our
cities. The report comes as the House of Representatives and Senate
prepare to debate Governor Healey's critical housing proposal.
"Massachusetts needs to build
tens or perhaps hundreds of thousands of housing units to meet
demand, so it is key that policymakers understand the right ways –
and the wrong ways – to address this crisis," said Evan Horowitz, Executive Director of the Center
for State Policy Analysis at Tufts
University. "Transfer taxes are a very risky approach. We
really need to focus on making it easier to overcome local barriers
to housing creation."
The report suggests a number of ways the state may address the
housing crisis, including:
- Expand policies similar to 40B to
streamline the creation of affordable and market-rate housing
units.
- Permit Accessory Dwelling Units (ADUs) by right across the
state, as proposed in Governor Healey's Housing Bond Bill.
- Tracking and overseeing existing pots of money meant for
affordable housing, including funds in local housing trusts, which
rarely report their activity, as well as revenue from the Community
Preservation Act, which sometimes sits in municipal bank
accounts.
- Reform policies such as Proposition 2 ½ to exempt affordable
housing initiatives from counting towards the tax collection cap,
granting communities more flexibility in their budgeting.
"The commercial real estate sector is as committed as anyone in
wanting to see vibrant downtowns, and that vision includes
affordable housing, but increasing transfer taxes is not the
answer," said Don Davis, Vice
President of Advocacy and Building Codes at BOMA International. "As
this report shows, an increase in transfer taxes would have a
devastating impact on commercial properties, and that would
negatively affect local businesses and all of the jobs and revenue
they generate. Particularly as local economies continue to emerge
from the pandemic, this is not the right time for tax increases—we
need to encourage business activity that can help downtowns
thrive."
This new report and the previous GBREB/cSPA analysis of the
state Community Preservation Act can be found at
MAHousingSolutions.com.
About BOMA International and BOMI
With more than 100 years of leadership and innovation, Building
Owners and Managers Association (BOMA) International and its
institute, Building Owners and Managers Institute (BOMI), serve the
entire commercial real estate community, including owners,
managers, property professionals, engineers, and service providers
of all commercial building types, encompassing office, industrial,
medical, corporate, government, and mixed-use. BOMA's mission is to
advance a vibrant commercial real estate industry through advocacy,
influence, and knowledge across a federation of 81 U.S. local
associations and 18 global affiliates with over 20,000 members.
BOMI provides critical education and training to industry
professionals and has delivered more than 400,000 courses and
43,000 credentials through its designations (RPA®, FMA®, SMT®,
SMA®, and BOMI-HP®) and certificate programs with a proven record
of increasing job performance and company efficiency. BOMA and BOMI
are committed to championing commercial real estate professionals,
equipping them with cutting-edge insights and unparalleled value to
propel their careers. For more info, visit boma.org and
bomi.org.
Media Contact
Cathy Calliotte, BOMA
International, 410.974.1410 x1257, ccalliotte@bomi.org,
www.boma.org
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SOURCE BOMA International