Working group to study broker fees in Boston
Building on his commitment to expanding access and removing barriers to housing for residents, Mayor Martin J. Walsh tonight announced that he is launching a working group to study broker fees in Boston, and how they impact renters across the City of Boston. Mayor Walsh will name members of the working group by the end of February, which will include a wide range of stakeholders. This working group builds on the Walsh Administration's work to ensure all those who live in Boston have access to equitable, affordable housing choices.
"The housing crisis in our city requires a comprehensive, and multi-pronged approach to achieve our goal of creating and preserving new housing, while also ensuring that our housing is accessible to all residents," said Mayor Walsh. "I am proud to pull together this working group to move us forward in determining how broker fees are impacting our renters and our housing market in Boston. This is another tool we are putting forward to tackle the underlying challenges of housing affordability in Boston."
The state of New York recently passed state law in 2019 intended to stabilize housing and protect tenants, which has led to a change in brokerage fees in New York City.
In his State of the City address last month, Mayor Walsh pledged to dedicate $500 million over the next five years to create thousands of homes across Boston affordable to households with low and middle incomes. These new investments will support the City's goals of creating rental and homeownership opportunities, preserving public housing units, and establishing the first city-funded voucher program.
Through increases in the City's operating and capital budgets, the investment will double the City's current funding in affordable housing to $100 million. Additional revenue will be generated by selling the Lafayette Garage, as well as working with the Massachusetts Legislature to approve a transfer fee of up to 2 percent on private real estate sales over $2 million in the City of Boston. These combined investments will increase the available funds for affordable housing to five times current funding levels over the next five years.
Since Mayor Walsh took office, the City of Boston has built over 65 percent of the new homes in Greater Boston, with 20 percent of new homes being affordable housing, according to the Metropolitan Area Planning Council. Boston has surpassed 32,000 units permitted under the administration's housing plan, including over 6,200 affordable housing units and over 500 units for senior housing. More than 1,000 BHA units have been renovated and the Department of Neighborhood Development (DND) has assisted over 600 homebuyers in purchasing their homes.
Boston's strategy of increasing overall supply of housing units is beginning to show a stabilizing effect on the housing market. Year over year rental listing data from 2017 and 2018 in Boston shows rents increasing by 2.7 percent in older housing stock, and 3.3 percent in all housing, including newly-built stock.
Boston has been trending away from large year-over-year increases in rent costs for several quarters as development catches up with demand, creating more rental opportunities across the City. This trend continued in 2019: a year-over-year comparison of the first two quarters in 2018 and 2019 show rent prices incrementally increasing by 1.7 percent in older housing stock, with a 1.5 percent increase in all housing stock.