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Wu Mulls More Developer Fees And Rent Stabilization In New Affordable Housing Agenda


Boston Mayor Michelle Wu is kick-starting an ambitious affordable housing agenda, exploring new development fees and rent stabilization measures that could impact the city's commercial real estate market.

Boston Mayor Michelle Wu answers questions from reporters Nov. 16, 2021, at Boston City Hall.

Wu announced developer fee studies and a legislative push for a real estate transfer tax Tuesday, the progressive mayor’s first actions toward the commercial real estate community after being elected last month. Affordable housing advocates applauded Wu’s announcements, emphasizing the need for the measures in one of the nation’s priciest rental markets and a competitive single-family home sales market.

“The goal is to ensure the wealth and opportunity in this city is shared by all,” Wu said Tuesday during a City Hall press conference.

Her administration’s most immediate action will be submitting a home rule petition to City Hall establishing a real estate transfer fee to generate more affordable housing revenues. If passed, the measure would have to make it through the State House and past the governor’s desk. City Hall will also form a Rent Stabilization Advisory Board exploring tools to protect residents. 

Wu said the city’s legal team will seek a stay on a housing court judge’s decision last month to overturn Boston’s indefinite eviction moratorium. Rent control has been banned in Massachusetts since 1994, and outgoing Republican Gov. Charlie Baker said he isn’t likely to support the measure. Boston’s CRE players expressed doubt over Wu’s rent control push at the time of her election last month.

In a separate affordable housing-related move, Wu signed Wednesday an amendment to Boston’s zoning code eliminating off-street parking minimum requirements for affordable housing developments at projects with at least 60% of income-restricted units. 

One of the city’s upcoming studies will explore changes such as lowering the SF threshold that triggers linkage fee payments from developers, speeding up the payment schedule, and increasing the fee itself. Former Boston Mayor Marty Walsh raised linkage fees in February 42% to $15.39 per SF. 

“Linkage was designed to mitigate the increased housing pressure and displacement of low- and moderate-income residents caused by large-scale commercial development,” Massachusetts Affordable Housing Alliance Executive Director Symone Crawford said in a statement. “The current linkage fee doesn’t do that.”

A multifamily building in Mattapan under construction in September.

Another study will mull raising the Inclusionary Development Program requirements to force developers to include 20% or more affordable housing units in new multifamily projects up from the current 13% level. The studies are due to be completed in five months.

Wu said she’ll also consider executive action alongside the linkage fee study to reduce the number of units needed to trigger affordability contributions, now at 10 units, noting developers often submit proposals for nine-unit housing projects to avoid the threshold.

The Greater Boston Real Estate Board backed Wu’s agenda, suggesting her housing mission could empower minorities and other disadvantaged groups.

"We also believe the Mayor and her study groups should aggressively explore all ideas that reach our shared goal, including taking down barriers to new construction, directly empowering first-time home buyers and more," GBREB President CEO and President Gregory Vasil said in a statement to media.

Longtime Boston real estate attorney John Gahan, a partner at the Sullivan & Worcester law firm, said the industry should take a wait-and-see approach to Wu’s agenda, specifically to rent stabilization, echoing CRE leaders responding to Wu’s election last month. 

“Rent stabilization is not a bad idea per se, but as always the devil is in the details,” Gahan said. “I’m happy with the idea of the mayor. I think it’s always worth looking at, without prejudging.”