Opinion piece about transfer tax in Globe
Kathryn Roy
That idea was widely viewed as a common-sense way to raise significant cash to build more housing. It seemed to have serious momentum on Beacon Hill — until, as the Globe recently reported, the real estate industry’s lobbyists descended on the Legislature and convinced leadership to drop it, arguing that it could depress the high-end housing market.
House leaders have recently taken to calling it a “piecemeal” solution to a larger problem, because it would have more impact on communities like Boston and Nantucket — which have more seven-figure properties — than it will have in working-class communities.
That’s true, but so what? Pass it, and let it provide much-needed relief to Boston and the other communities where it will have impact. If it creates some working-class housing on Nantucket, that’s a great thing, as far as I’m concerned.
Fortunately, the idea is far from dead. Senator Lydia Edwards of East Boston, the Senate housing chair, has been a fierce proponent for the transfer tax since her days as a Boston city councilor. It wouldn’t be a surprise to see it included in the Senate version of the housing bill, which has yet to be released. (The chambers will resolve their two versions in conference committee, ideally before the legislative session ends on July 31.)"
Avram Baskin
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<Is Beacon Hill finally getting serious about housing? - The Boston Globe.pdf>
Ruth Thomas
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Umesh
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Kathryn Roy
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Umesh
Glenn Parker
On 12 Jun 2024, at 10:03, 'Ruth Thomas' via LexTMMA wrote:
A one million dollar property is now considered "affordable" or "attainable," at least in Lexington. Many buyers and sellers in the price range from one to two million dollars are not exceedingly wealthy in today's economy.
That might sound reasonable, but I submit that you’re only considering the people who somehow manage to purchase a home in Lexington.
And this may sound obvious, but a $1 million property is only considered affordable if one can actually afford it. The overwhelming majority of people in Massachusetts won’t even look at Lexington, because they can’t. Furthermore, the median price for a single family home in Lexington is well over $1 million. IMHO, the people buying $2 million houses are wealthy by any standard, even if their buying power is lower here compared to many other parts of the state.
“Wealthy” is a fairly subjective quality, but “affordable” is something we can discuss in quantitative terms.
Lexington, as a town, is not at all affordable for most buyers in the Commonwealth. We know this from a report by the Joint Center for Housing Studies at Harvard. That report analyzed the annual income needed to cover the mortgage on a median home in regions across the state. Lexington sits in a larger region where the median home price was $659K (in 2022). For the region, an annual income of $181K was necessary to make that “affordable”, i.e., not cost-burdened.
The median (single-family) home price in Lexington is currently about $1.6 million, over twice the regional median. That means the required annual income is in the ballpark of $440K for a new homebuyer today. In my book, someone making $440K/year is wealthy relative to someone making the state average of $77K/year. We sit at the high end of what is already one of the most expensive areas in the state.
Oh, but it’s not fair to use the state average salary? OK, in 2022, the average income in Lexington was about $300K, almost four times the state average, and yet that is only 68% of $440K. So, the cost of housing in Lexington implies that a significant portion of our residents are likely to be “cost-burdened”.
By the way, what exactly does “attainable” mean? Does it mean buying more house than one can truly afford, then making do under a cost-burdened budget?
Tying this back to the transfer tax: a 2% marginal tax on the sale price of a home over $1 million would work out to $12K for a $1.6 million home in Lexington, about 0.75% of the total price. That would be paid by the seller, who would most likely factor it into the asking price. That would push up the cost for some housing, but it would also help to fund more truly affordable housing in Lexington, which would push down on the average cost of housing.
Raising the minimum home price for the transfer fee well above the median value, say to $2 million, would largely negate its utility in Lexington, IMHO.
Glenn P. Parker, Pct. 3
glenn....@lexingtontmma.org
Henry Lau
I just wanted to let you know that I have resigned from the Town Meeting Member position, effective tomorrow, because I am moving to Precinct 8.
I hope to rejoin the TMM next year.
You can reach me at yhlau...@yahoo.com
Sincerely,
Henry Lau
TMM, Pct. 3
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