Councilors Lydia Edwards (East Boston, Charlestown, North End) and Kim Janey (Roxbury) say the city's current affordable-housing efforts are not enough to stop the Manhattanization of Boston.
In a proposal filed Monday, the two propose a tax of up to 25% on transactions involving property bought and sold by the same entity within 24 months - a practice known as flipping - and a new tax of 6% on transactions involving pricey properties in the city.
In their proposal, the two say Boston's main affordable-housing program - requiring housing developers to set aside 13% of their units as "affordable" and office developers to pay into a housing fund - is aimed at people making between roughly $50,000 and $100,000 a year.
That means that poor people and people living in apartments are often squeezed out of the city because they do not make that much. The councilors say the flipping provision could reduce escalating real-estate speculation in poorer neighborhoods and that they would use the new money from the taxes, which they told the Globe could raise between $175 million and $350 million a year - to help residents at the lower end of the housing market stay in Boston.
The council will consider their proposal for a formal hearing on the proposal at its Wednesday meeting, which starts at noon in the council's fifth-floor chambers in City Hall. The measure would require the approval of the council, the mayor and, ultimately the state legislature and governor.
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This is about as good idea as
By Bill Solberg
Mon, 01/14/2019 - 8:45pm
This is about as good idea as rent control was. We all know that discouraged landlords from making improvements to their rental real estate which created more slumlords because rents increases were controlled. There will much less incentive to upgrade to attract true professionals. It will lower the tax base which will create higher taxes for the middle class.
Same result as rent control
By John
Mon, 01/14/2019 - 8:51pm
This is about as good idea as rent control was. We all know that discouraged landlords from making improvements to their rental real estate which created more slumlords because rents increases were controlled. There will much less incentive to upgrade to attract true professionals. It will lower the tax base which will create higher taxes for the middle class.
Construction Loans
By Oscar Worthy
Mon, 01/14/2019 - 7:27pm
Professional house-flippers don't finance like Bob and Mary looking to buy their first home. Regular homestead buyers almost always go with traditional mortgages, often from banks and credit unions, with terms often up to 30 years. House-flippers rarely go the mortgage route, instead going for construction loans from private and hard money lenders, that cover the acquisition of the property plus the costs for the renovation - to be paid off at the time of property sale.
Whereas Bob and Mary's 30 year mortgage might have rates under 4%, a construction loan for a house buy-and-flip usually has a term of 12 months or 24 months. And the rates are around 13-16% typically. So that means; buy/evict if necessary/renovate/market/sell in under 2 years, or risk default.
So the proposed 24 month regulatory scheme aims squarely at a time period almost exclusive to the professional house-flipping/profiteering industry, rather than homestead buyers.
And many house-flippers are not going to 'sit' on the property for 2 years to wait out the taxable period. Because in all likelihood, their financing will have to be perfected within a couple of years from acquisition, and they're paying inflated private interest rates in the meantime.
Can we stop calling it Manhattanization?
By ChrisInEastie
Tue, 01/15/2019 - 12:10am
until half the city doesn’t shut down when the sun goes down, liquor licenses aren’t worth more than entire businesses, and we have viable public transit after midnight?
Rent To Own
By BlackKat
Tue, 01/15/2019 - 8:08am
The only way you can stop bad real estate commoditization is to stop all real estate commoditization. All residential property should be owner occupied and purchasable with no money down / no interest mortgages issued by the government - having secured those properties for sale by confiscating all non-owner occupied properties. If scummy investors still want to continue their practices they can focus on industrial and commercial real estate instead.
Ja, ja!
By Bob Leponge
Tue, 01/15/2019 - 9:58am
I read what you're saying as approximately this:
"We will seize their property and redistribute it to the Volk!."
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