Councilor Lydia Edwards (Charlestown, East Boston, North End) today proposed taxes on property speculation as a way to keep Boston from becoming another Manhattan.
Councilors agreed to schedule a hearing on Edwards's proposal, which she made in her first formal speech to the council as a newly elected member - in November, she replaced Sal LaMattina, who retired.
Edwards said she doesn't buy the idea that all the new housing development going on in Boston now is going to do anything for the people who cannot afford even the "affordable" units developers are required to include, because it's based on the "area median income," which keeps increasing as more well off people move into the city.
"I do not believe we can build our way out this problem," especially in an era when growing numbers of units are being rented out by concerns such as Airbnb rather than being rented or sold to actual residents, she said.
Her proposed ordinance would levy fees on property flipping and units bought by foreign speculators and would limit home-share units to just one unit in owner-occupied buildings.
The funds from the fees would go to buy or build units actually affordable to Boston residents not in the market for luxury space.
"We need to play defense," as well have some "frank discussions" with developers about how Boston needs to remain affordable for all Bostonians. She said they need to adjust to the fact that they have to adjust to Boston, rather than Boston adjusting to them.
She cited her own district, where at one end a developer has proposed turning Suffolk Downs into a massive mixed-use development and where at another end the BHA is looking to let a private developer rebuild and expand the Bunker Hill project into a large mixed-income development.
"Boston is not for sale," she said. "Our future is at stake, and we have work to do. But Boston knows how to work and we will rise to this situation."
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 Edwards's hearing request | 192.58 KB |
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"I do not believe…"
By Jeff B
Wed, 01/24/2018 - 3:41pm
That she might have the strongest grasp of economics. Whatever the argument about taxing non-occupants that let property sit, if this is targeting people renovating homes to sell it is pretty dumb.
We can *only* reform zoning and build our way out of this http://marginalrevolution.com/marginalrevolution/2...
Let's see...
By anon
Wed, 01/24/2018 - 3:57pm
Buy a shabby house, fix it up for a pretty penny, sell it for a prettier penny, pay capital gains tax. Isn't that enough of a tax? Or should we depress housing redevelopment to keep our neighborhoods gritty? I mean, I liked Boston in the 70's but today its much better. JMHO
No it's not enough
By BlackKat
Wed, 01/24/2018 - 5:44pm
If you buy property with any intent other than to be an owner occupant, whether you intend to rent or flip the property, you are contributing to the over-inflation of housing prices that prevents normal, non-rich people from being owner occupants.
What difference does it make
By eherot
Thu, 01/25/2018 - 2:00am
What difference does it make whether or not you plan to live there?
You're right.
By anon
Thu, 01/25/2018 - 8:27am
You're right. I'd rather the dump with the junkies living in it than some speculator renovating the property and selling it to a nice family, or anyone else who wants to buy a move in property and not have to endure a renovation process.
who says...
By anon
Thu, 01/25/2018 - 1:21pm
Who says it is an either/or situation? What about regular middle class folk who can not purchase the over-inflated post-renovation units and want to get into the market and renovate themselves? Do we really only want the upper-upper-middle class and above to be able to afford to live here? Because that is what happens when regular people can't buy houses here that they can fix up, especially when they have to compete with flippers armed with cash.
Renovation is VERY expensive,
By anon
Thu, 01/25/2018 - 3:36pm
Renovation is VERY expensive, even if you're a homeowner hiring somebody else to do the work. I just signed for a bathroom renovation, a 5' x 9' room, not moving anything around, and just the labor is gonna be 20k, plus costs of materials. Sure there's DYI, but considering the reason I have to renovate is shoddy DYI pipework leaking everywhere, I'm doubtful that's the solution to all our problems.
Oh really
By anon
Thu, 01/25/2018 - 9:20am
So where do you live? A condemned building?
Flippers are usually small fish who are returning housing stock to the market by making it habitable.
It's amazing how many people seem to have missed all the ads
By adamg
Thu, 01/25/2018 - 10:04am
Yes, there are people who buy rundown units and rebuild them into their former glory and sell them and wow, the neighborhoods is all the better (except when it happens all at once and then all the people who used to live there are priced out).
But that's not what we're talking about here.
Have you really missed all the commercials and ads for seminars on how to buy perfectly fine units, make modest improvements and then PROFIT? I suspect that's what Edwards is talking about - investors who buy large numbers of units, then flip them.
Or maybe you missed all the news of all the people who were indicted - and convicted - for doing this in Dorchester during the Great Recession?
We're not talking gritty urban pioneers rolling up their sleeves and turning a condemned house into a jewel. We're talking rentiers seeking to game the system at the expense of the shrinking number of low- and middle-class people struggling to stay in the city.
Maybe On Some HGTV Show
By anon
Thu, 01/25/2018 - 10:10am
However in Boston, Massachusetts and its immediate suburbs, house-flippers are buying fully tenanted buildings, evicting all of the residents from their homes, for the purpose of reselling them to much wealthier people. (Often singles and couples who will take over a unit that previously housed a family of 3-6.)
This.
By adamg
Thu, 01/25/2018 - 10:18am
It's particularly acute in places such as East Boston and JP.
I can't speak for Eastie, but
By eherot
Thu, 01/25/2018 - 12:19pm
I can't speak for Eastie, but I can tell you that in JP, the unit generally does have to be renovated first before people are willing to pay more for it. It's not complicated: Why would someone want to pay a bunch more money to live in a unit that hasn't been improved at all when, presumably, they could just buy the crappy unit themselves to begin with? The improvements may just be cosmetic but the buyer is actually taking a risk with the building and that risk is born out in the sale price. If you added a tax to that, some flippers would presumably decide it was not worth the risk and not bother buying it in the first place.
The problem is it doesn't stop there: The rich kids who were looking for housing are, well, still in need of housing, so the shortage continues until eventually the distressed properties will fetch so much money after rehabilitation that it becomes worth it even with the speculation tax. Meanwhile, anyone who's looking for a place that's not on the verge of being condemned AND not $700k for a 1br is SOL.
Yes and the #1 reason is
By anon
Fri, 01/26/2018 - 10:46am
Yes and the #1 reason is NIMBY. Neighbors won't allow new construction to a density that makes it affordable to build and the city and neighbors drag out the process so it takes a year just to get permits. So what's a developer to do?
Unconstitutional
By Lunchbox
Wed, 01/24/2018 - 4:28pm
A tax directed at foreign investors would be an unconstitutional tariff. Only Congress can levy such taxes / tariffs.
And it feels kinda Trumpian, too. MakeBostonGreatAgain, keep them foreigners out
Taxing rich people to help
By Kinopio
Wed, 01/24/2018 - 4:46pm
Taxing rich people to help out the middle and lower class is the complete opposite of Trumpian, though.
You realize
By bosguy22
Wed, 01/24/2018 - 4:56pm
Taxes aren't intended to "help out" on subset of citizens at the expense of others, right?
Wait that's not right...
By BlackKat
Wed, 01/24/2018 - 5:47pm
otherwise my federal taxes would be spent here and not in Alabama.
The trouble is that it doesn
By eherot
Wed, 01/24/2018 - 5:20pm
The trouble is that it doesn't discriminate between rich and poor, it discriminates between foreign and domestic. That is, fundamentally, a tariff and may also run afoul of many of our international trade agreements which generally don't allow governments to favor local companies over foreign ones (lest it lead to a trade war).
Leave them alone
By anon
Wed, 01/24/2018 - 4:31pm
There's palace in he'll for flippers and speculators.
As always, the devil is in the details
By Gary C
Wed, 01/24/2018 - 4:38pm
I too applaud her for taking on a serious topic with wide-ranging ramifications.
Many of the comments here assume huge new taxes or communism or worse. Some reasonable taxation on home flipping would not stop people from doing it, it would just change the economics. The key is finding a sweet spot where the flipping fee is generating a meaningful stream of revenue to fund affordable housing, without making it too expensive to bother fixing up tired properties in the first place.
(She should also merge this discussion with Walsh's plan to charge a fee to Airbnb owners. Getting short-term rentals under control is closely linked with speculation and flipping.)
1st speach
By Stephen Bickerton Sr
Wed, 01/24/2018 - 4:50pm
Out of the gate is taxes.
YIKES!!!!
We already are becoming
By anon
Wed, 01/24/2018 - 5:37pm
We already are becoming another Manhattan. In Boston you're either wealthy or homeless or borderline homeless. The housing being built is way too expensive. By the way, has the annual census for the homeless population in Boston come out from City Hall yet??
No , Boston does not have the
By anon
Sat, 01/27/2018 - 6:16pm
No , Boston does not have the vibe or diversity of Manahattan. You can still buy a nice condo in Upper Manhattam for 350K near the subway, near open space, near amenities, access to world class cultural institutions and it is MUCH safer, more tolerant and there is more opportunity than Boston. There are millions of middle and lower middle class people on Manhattan, there is NYCHA, HUD, mixed income, rent stabilization, a few rent controlled units and right to remain. Sorry Manhattan has Boston beat despite there own housing crisis. However the retail is getting pushed out due to speculative rents.....which already happened here...
You need to broaden your horizons a bit
By adamg
Sat, 01/27/2018 - 7:40pm
There is more to Boston than downtown and the Back Bay.
I'm not disputing your overall defense of New York, but let's not get carried away. For starters, Manhattan does not have "millions of middle and lower middle class people" - the entire island has a population of about 1.6 million people and, sorry, there really isn't that much room for the middle class there anymore.
If you want to look for large numbers of middle-class people, you need to go into the outer boroughs, and really, the outer parts of those - like away from Williamsburg. You know, like leaving the Back Bay for, oh, Dorchester or Hyde Park.
Then if she decides to flip
By anon
Wed, 01/24/2018 - 6:44pm
Then if she decides to flip property of her own she better pay up on taxes!
She's an owner-occupant of a
By anon
Thu, 01/25/2018 - 5:21pm
She's an owner-occupant of a small multifamily and has been for years. I'm sure the definition of "flipping" would involve some time horizon - If you occupy the property for a reasonable 3-5 years or something, That's just normal life.
People who never occupy the property or do so for a matter of months and never intended to make it their home? Sorry, my tiny violin must have slipped between the floorboards. The ones I restored so I could walk on them, instead of ripping them out to replace with the cheapest linoleum on the market.
Definition please
By Hugo
Wed, 01/24/2018 - 7:03pm
I wonder if she even tried to define who would be considered a "flipper"?
If I buy a condo in East Boston with a plan to live there for many year but then in 2 years my job transfers to Springfield so I have to sell and move - am I now a flipper?
What if my wife gives birth to triplets and we need to sell and move to a bigger home 1 year after buying it, are we now flippers?
So yes, in the grand scheme of things it seems like a "flip tax" might curtail something but pray tell, how would the city manage it? They can't even manage the city's current affordable housing program. (My neighbor, a banker, bought an affordable unit 3 years ago then moved to NYC 2 years ago and has been renting out the 3 bedroom unit at market rate.)
Your Neighbor, A Banker,
By Oscar Worthy
Thu, 01/25/2018 - 10:16am
Sounds like a douchebag.
Given the history of the area
By anon
Thu, 01/25/2018 - 7:07am
Given the history of the area, what's up with the zealousness for taxes in Boston/Massachusetts.
Yeah, I know, right?
By erik g
Thu, 01/25/2018 - 11:22am
It's almost like people here have collectively realized that government is capable of doing good things, and we're willing to pay money in exchange for roads, schools, fire departments, and law enforcement ¯\_(ツ)_/¯
What history would that be?
By anon
Thu, 01/25/2018 - 11:27am
The whole taxachusetts thing was a myth and is still a myth.
It will be interesting to see how the other Councilors feel...
By anon
Thu, 01/25/2018 - 10:50am
especially since one of them is married to one of the biggest property flippers in the city.
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