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Walsh backs surcharge for affordable housing

Will fund open space, historic preservation

Jule Pattison-Gordon
Walsh backs surcharge for affordable housing
At City Hall Plaza, Mayor Martin Walsh announced support of a potential ballot measure that would fund projects by implementing a property tax surcharge. (Photo: Mayor’s Office photo by Isabel Leon)

Last week, Mayor Martin Walsh announced his support for a ballot measure that would raise revenue specifically for affordable housing, parks and historic preservation. If the Community Preservation Act makes it onto the November ballot and wins voter support, it will generate this funding in part through a 1 percent surcharge added onto property tax bills.

“[The CPA] is an important tool and step to create a more affordable and sustainable future,” Walsh said during an afternoon news conference on City Hall Plaza last Wednesday. He called housing costs one of the city’s greatest challenges, adding, “We have to use every available tool and resource we have to continue to build more housing.”

To date, 160 municipalities across the state — including Cambridge and Somerville — currently utilize the CPA. Had Boston joined them, this year the city would have raised $16.5 million in additional revenue and triggered millions more in matching state funds, Walsh said.

This is not the first time the act has come under consideration. In 2001, Boston voters shot down an earlier version that would have implemented a 2 percent surcharge. City Councilor Michael Flaherty, who sponsored that original bill, has brought it forth again, joined now by Councilor Andrea Campbell. Council President Michelle Wu also has declared support.

Flaherty expressed hopes that this time, the CPA will have the backing it needs.

“It lacked one thing back in 2001, which was full mayoral support,” he said.

City needs

Walsh said, if voter-approved, the CPA could arrive at a critical time. With many development projects in the pipeline, implementing this surcharge “is the best opportunity we have right now to get in there and maximize housing,” he said.

Currently, there are approximately 5,000 low-income seniors spending more than half their income on rent in Boston, noted Sheila Dillon, chief of housing and director of the Department of Neighborhood Development. At times, these seniors choose between paying for housing, medicine or food, she said. And the problem is unlikely to abate without strong action: Dillon said she expects an increase of 10,000 low-income residents by 2030.

Kathy Kottaridis, executive director of Historic Boston Incorporated, said the three areas supported by the CPA complement each other in strengthening neighborhoods. For instance, some of HBI’s projects have involved rehabilitating historic properties to be used for housing and urban farming. And HBI often encounters gaps between needed funds and what can be raised from traditional sources, she told the Banner, making CPA funding a significant potential resource.

How it works

Funds raised by the CPA go straight to key causes, but are not locked in to specific initiatives. This gives officials flexibility in the methods they use to try to achieve the goals. For instance, money designated for affordable housing could go toward subsidizing affordable housing development, homeownership programs and/or other efforts, as officials see fit.

Each of the three areas — historic preservation, parks and affordable housing — would receive at least ten percent of the CPA-generated funds. A to-be-created Community Preservation Committee with five to nine members would make recommendations to the City Council on how to distribute the rest.

In past years, in cities that have adopted the CPA, the state has matched CPA funds at a level of 23 to 50 percent. Special appropriations by the state legislature and a surcharge placed on deed transfer transaction fees are responsible for generating the state’s contributions. But this surcharge is applied to anyone making a transaction at the Registry of Deeds, regardless of whether her or his municipality participates in CPA. If Boston takes up the CPA, it will start tapping into the fund its residents have been helping supply.

Taxpayer impact

For the average single-family home, the property tax surcharge translates into paying an extra $28 annually, according to city officials. The first $100,000 of a property’s value is exempt from the surcharge, and there would be exemptions for senior and low-income homeowners, Walsh said.

In the past, some have expressed fears that any additional property costs will burden businesses. Already, commercial property is taxed at a more than twice the rate of residential property, and the surcharge would rely more heavily on them.

“The majority of new revenue would come from commercial properties,” states a city press release. Walsh administration officials did not have information available on average surcharges for commercial properties.

However, Walsh argued that an increase in affordable housing is also a benefit to businesses. It would make it easier for employees to stay in the city, and thus for companies to fill positions. The news conference also brought out several supporters from the business community, including Boris Kuritnik, real estate agent with Jamaica Plain’s Greenville Group.

He told the Banner that the CPA funding helps retain communities and promote the “historical feel and natural aspect of the city,” — elements he says make Boston attractive to live in and draw people to the city.

Real estate reliance

During his recent budget proposal announcement, Walsh lamented Boston’s reliance on property tax, complicated by the restrictions Proposition 2 ½ places on how much property value can be tapped. With the addition of the CPA, the city turns again to real estate for revenue.