Mass Alliance of HUD Tenants

42 Seaverns Avenue/Jamaica Plain/MA/02130
617-522-5133/617-233-1885 [email protected]

To: Ricardo Arroyo, Chair Date: March 2, 2023
Government Operations Committee

Re: Testimony to support and amend Mayor Wu’s proposed Home Rule Petition to Stabilize Rents

From: Michael Kane, Director, Mass Alliance of HUD Tenants (MAHT) 
Member, Mayor’s Rent Stabilization Advisory Committee

Thank you for today’s hearing on Mayor Wu’s proposed Home Rule Petition. MAHT is here to support Mayor Wu’s Home Rule Petition, and to propose amendments to strengthen it.

MAHT is a coalition of tenant groups in privately-owned, government assisted housing in Eastern and Central Massachusetts. Since 1983, MAHT has helped preserve more than 8,000 subsidized apartments in Boston that were at risk of conversion to high market rents, one building at a time, through tenant organizing.

At the same time, Boston has lost more than 2,100 previously affordable apartments by conversion to high market rents since 1996. Another 928 are at risk of conversion today, including the Forbes Building in Jamaica Plain and Babcock Towers in Brighton. Elderly and disabled tenants at the Forbes, who face up to $1,200 per month rent increases in 2023, urgently need rent stabilization to avoid mass displacement.

Mayor Wu is to be commended for her visionary leadership and courage in proposing a Rent Stabilization proposal in response to Boston’s rental housing crisis. Likewise, a majority of the City Council is to be commended for evident support for rent stabilization, for the first time since the 1970’s. For the 2/3 of Boston voters who affirmed our support for rent control in the 2021 election, this is an exciting and hopeful time. Together, our growing, powerful movement has begun to chip away at the anti-regulation climate at the Statehouse.

Since the repeal of Boston’s “expiring use” rent control by the legislature in 1995, the City Council and three Mayors have unanimously supported MAHT’s Home Rule Petition to restore controls to “expiring use” housing. We appreciate the Council’s vote to re-file this measure in October 2022. While Statehouse leaders have blocked passage of Boston’s “expiring use” HRP--and most attempts to regulate real estate markets--since the late 1990’s, strong leadership by Mayor Wu and the Council, and growing support statewide, offers hope that Boston’s Home Rule proposals, and/or statewide enabling legislation, can be passed in this legislative session. 

After sustained pressure from the Forbes Building Tenants Association (FBTA) with support from the Mass Alliance of HUD Tenants, All City Management (ACM) has notified 75 former 13A "legacy" tenants whose leases expired December 31, of a one-year Rent Freeze!  

These are all lower income tenants who received a six-month lease in May 2022, after state 13A rent restrictions expired.  Tenants were facing up to $1,200 per month rent increases until the freeze was announced.  While the short-term freeze provides much appreciated breathing room, there is still work to be done to save the Forbes as affordable housing for the long term.   

The FBTA has kept the drum beat steady through rallies, in the press and at the Jamaica Plain Neighborhood Council to save their homes, in the face of numerous broken promises and missed deadlines from All City Management.  But we know the pressure is working!  In addition to the rent freeze, ACM's team has now publicly committed to reach a deal that will preserve all 147 apartments as affordable housing for mostly senior and handicapped tenants.  

However, ACM has yet to submit a workable, written proposal to the City and State, and missed a key deadline in October to apply for funds.  Reportedly, ACM is requesting $40 million more in public subsidies than State guidelines allow. Stay tuned! 

The FBTA and Mass Alliance of HUD Tenants are working closely with newly elected Representative, Samantha Montaño, to rengage the City and the State to encourage a timely and favorable preservation deal, and to pursue the passage of a Boston Home Rule Petition that would give the City the authority to require building owners like ACM to accept preservation deals. The FBTA also recently won the approval from the Jamaica Plain Neighborhood Council to send a letter in support of the FBTA affordability goals to City and State officials.

The Forbes Building Tenant Association continues to advocate in the community and with the legislature to win long-term affordability of the building.

Please direct your questions to the Mass Alliance of HUD Tenants at: 617-522-5133 or by email at: [email protected]

Saturday December 17th, we hosted our first in person holiday party since 2019. We were absolutely thrilled to be able to gather back in person this year to eat delicious food, enjoy beautiful music and honor the hard work of our member Tenant Associations, Civic Engagement Team and Lobby Team including:

Forbes Building Tenant Association for continuing their heroic campaign to secure permanent affordability and Save Their Homes. 

Georgetowne Tenants United for winning a model Eviction Prevention Plan from Beacon Communities for 18,000 Beacon tenants nationwide.

We are saddened to announce the recent passing of Ellie McCarthy, long time MAHT volunteer and resident of Ausonia Apartments in the North End. She supported MAHT at various rallies and protests and traveled to Washington D.C. to fight with tenants across the country on housing issues. She will be dearly missed.

The final Boston budget approved on June 30, increased the City Rent Subsidy Program to $9.75 million/year!  This is a major victory for the CRSC and MAHT—we had advocated to increase the $5 million pilot program, by doubling it this year! 

Mayor Wu had originally requested $7.5 million/year in her budget, an increase of $2.5 million but short of the CRSC goal. On June 6, the Council voted to increase this, to $10m and offset the extra cost with cuts to the Fire and Police Departments. The Mayor vetoed the police cuts and responded back with a $9.35 million offer.

It was a beautiful day for our annual meeting this past Saturday to celebrate the many tenant leaders and tenant associations who work hard to save affordable housing across Massachusetts. We were excited to present awards to:

The Forbes Building Tenants Association in Jamaica Plain for gaining community support to get their owner to commit to permanent affordability

Georgetowne Tenants United in Hyde Park for winning a comprehensive survey of water leaks and mold and Emergency Rental Assistance for tenants behind on rent

Babcock Towers Tenants Association in Brighton for securing their landlord’s acceptance of 46 Vouchers from the BHA to save their homes

Marcus Garvey Tenants Association in Roxbury for successfully protesting sudden rent increase notices and restoring dialogue with management

The City Rent Subsidy Coalition for winning support to increase Boston’s City Rent Subsidy Program from $5 million to $10 million annually

Newcastle-Saranac Tenants Association in Roxbury for surviving relocation and renovations and winning owner’s commitment to seek additional Vouchers to lower rents for tenants

The Sandi Padellaro Award for Outstanding Tenant Leader to Yuri Fershter from Babcock Towers Tenants Association for his courageous, brilliant, and compassionate leadership  to win creative new resources for tenants citywide and enable his neighbors save their homes

We also had the pleasure of having chief of housing for the city of Boston Sheila Dillon, Boston city councilor Ruthzee Louijeune, and state representative Mike Connolly stop by and express their support for affordable housing and all of the great work MAHT does. We look forward to continued partnership with them.

Mass Alliance of HUD Tenants

42 Seaverns Avenue/Jamaica Plain/MA/02130
617-522-5133/617-233-1885 [email protected]

Testimony in Support of H4637, Boston’s Home Rule Petition
relative to real estate transfer fees and senior property tax relief

To: Sen. Adam Hinds and Rep. Mark Cusack, Co-Chairs Date: June 7, 2022
Joint Committee on Revenue
Members of the Joint Committee on Revenue

From: Michael Kane, Mass Alliance of HUD Tenants (MAHT)

As a statewide tenants union representing low income tenants in government assisted housing, the Mass Alliance of HUD Tenants (MAHT) urges a favorable report this week for H4637, the Boston Home Rule Petition (HRP): An Act relative to real estate transfer fees and senior property tax relief.

The Committee is to be commended for favorably reporting several local HRPs (Nantucket, Somerville, Concord and others), empowering localities to raise real estate transfer fees and apply the resources for affordable housing in their communities. While time is short, the Committee’s recommendation gives these bills a greater chance at passage in this session. We urge you to add Boston’s HRP to these measures supported by the Committee.

In 2020, the Institute for Policy Studies published a Report, Money on the Table: Beacon Hill Inaction Stalls Affordable Housing Resources for Cities and Towns. Regarding Boston, the Report highlights two luxury residential buildings totaling 243 condos, The Dalton and Pier 4, demonstrating that Boston would have received $28.8 million in estimated revenue from the sale of condo units over $2 million, from these two buildings alone.

In 2020, MAHT identified more than 5,100 units in Boston’s luxury condo “pipeline” opening over the next two years (see attached chart). New luxury housing production has only accelerated since that date. In October 2021, MAHT identified more than 13,100 luxury high rise condo or rental housing units built since 2013 or in the pipeline in Boston. Passage of the Boston HRP will generate hundreds of millions of dollars for the City from increased transfer fees from sales of these high-end properties over the next several years.

Moreover, a substantial portion of the high end luxury condo sales are to overseas investors seeking a tax shelter or “wealth storage unit” to park speculative cash, with little or no intention of actually living in these units. The buyers and sellers of these super luxury condos can surely afford to pay 2% of the sales price for units selling over $2 million.

The vast majority of Boston’s residential sales, of course, are well under $2 million; the vast majority of Boston’s home and condo owners and buyers would experience no additional tax burden with the passage of H4637. And the luxury sellers would not pay a fee, on the first $2million of the sales price, only on the price above that amount.

In contrast to the other local real estate transfer HRPs, however, Boston’s HRP would also tap into another potentially vast source of revenue, from the sale of office and commercial properties in Boston’s booming downtown, Seaport, and other districts. As the hub of the Eastern Massachusetts economy, Boston has a high proportion of the commercial and office sector and has seen an explosion of new investment over the past 20 years. Allowing Boston to tax transfers over $2 million in this sector, would generate substantial additional revenue not otherwise available to the Commonwealth or smaller cities and towns, with no discernible adverse economic effects.

For example, in the year prior to June 2020, Boston registered 11 commercial/office transactions above $2 million each, totaling more than $2 billion in sales. Four flagship properties alone (245 Summer Street, 101 Federal Street, 109 Brookline, One Marina Park Drive) sold for $1.72 billion of this amount (source: Reonomy Report, 7/25/20). If Boston’s HRP had been in place, these 11 sales alone would have generated more than $40 million in revenue for affordable housing.

Most of the buyers or sellers of these properties, are not based in Boston. But they are benefiting from the enormous speculative boom in commercial real estate, linked to global investment trends, and fueled by Boston’s investment in infrastructure and development rights in the downtown/Seaport areas in particular.

One story will illustrate just how much money Boston—and the Commonwealth—are “leaving on the table.” In 2013, the Swedish construction company Skanska spent $159 million to build 101 Seaport Blvd, which opened in 2015. A year later, in 2016, Skanska sold the building to the German real estate fund, Union Investment, for $452 million—close to three times the development cost. With such extravagant windfalls at stake, a 2% tax would have had no effect whatsoever on this sale. In 2015, Skanska then spent $281 million to build 121 Seaport Blvd next door, selling it to American Realty Advisors and Norges Bank for $455 million in 2018, as the building completed construction. Had the Boston HRP been in effect, the City would have collected $18 million from these two transactions alone.

As the Boston Globe writer Tim Logan commented on April 12, 2016 on 101 Seaport, “The deal reflects the surging demand from foreign capital for trophy real estate in Boston. Roughly half of the major office towers in central Boston have changed hands in the past few years, many to international investors willing to pay top dollar.” While one can debate the desirability of foreign speculators playing Monopoly with Boston’s downtown real estate, there is no question that the City is missing out on a huge source of potential revenue due to the current limitations on the state real estate transfer tax, which has not been raised in 50 years. Taxing these transactions over $2 million at 2% will have no negative effects whatsoever regarding whether these transactions occur, or on the overwhelming majority of Boston’s property owners.

According to the City of Boston, passage of H4637 would enable Boston to reap up to $100 million annually in new revenues over the next five years. Some five times greater than the annual revenue generated by the City’s Inclusionary Zoning process, this additional revenue will go a long way toward addressing the City’s affordable housing crisis. Since luxury
development is itself fueling the over-the-top speculation in real estate values and displacement of lower income renters, particularly people of color, across the city, the least we can do is tap into a small fraction of these speculative profits, to create funds to address the rental housing crisis that result.

Boston is poised to spend this money rapidly, and well. In 2020, former Mayor Walsh created a pilot $5 million/year City funded Rent Subsidy Program from the regular City budget, modeled on the successful Local Rent Subsidy Program operated since 2007 by Washington, D.C. MAHT anchors the City Rent Subsidy Coalition, 32 groups that advocated to create this program and currently advises the Boston Housing Authority on program design and implementation. Today, the pilot program is already a success, housing more than 250 homeless families with children in the Boston public schools or others with urgent housing needs. Mayor Wu has proposed to increase the amount to $7.5 million/year, and the City Council is poised to increase it to $10 million/year. If H4637 is passed, and additional funds are made available, the City and the BHA
will be able to expand rapidly beyond 500 families who will be assisted this year.

Of the $100 million/year which Boston would raise by passage of H4637, if Boston were to dedicate $50 million/year to the City Rent Subsidy program, Boston could provide up to 5,000 Extremely Low Income (<30% of AMI) and/or homeless families with permanently affordable housing. This would go a long way toward getting homeless people off the streets and meeting the low income rental housing need of 21,100 families earning less than $25,000 per year, who need housing assistance to stay in Boston, according to the City’s Housing Plan, Housing a Changing City: Boston 2030.

At present, Massachusetts’ paltry real estate transfer fee ($4.56 for every $1,000 of sales) is dwarfed by New Hampshire ($15), New York ($12.50), Vermont ($12,50) and Connecticut ($10.52), applying to all sales in these states (i.e., no exemptions). If these states can collect as much as triple Boston’s ordinary rate, surely Boston can be allowed to collect 2% on deals over $2 million.

We ask the Revenue Committee to expeditiously and favorably report out H4637, and to urge legislative leaders to pass all these vital measures in the current legislative session. Thank you for your consideration. I can be reached at 617-233-1885 if you have any questions.

Tenants continue to report positive results from tenant advocacy. MAHT volunteer and Georgetowne resident Arthur Sutton is excited to report that his apartment has had mold remediation after problems with flooding. We know that mold can bring potential health issues, so this is great news. Apartments continue be inspected so we look forward to hearing more positive outcomes.

Kitchen and closet before mold removal

Kitchen and closet after mold removal

Following years of advocacy from tenant association Georgetowne Tenants United (GTU), property management company Beacon Communities has agreed to hire a contractor to survey 100% of Georgetowne apartments and address major issues after they are detected. This is a huge win for GTU, which has been urging the property management company to treat water leaks and mold as widespread, systemic issues for years.

Already, several Georgetowne tenants have reported that their units have been inspected and that Beacon has successfully addressed longtime infrastructure and mold issues. Check out these before and after photos from one Georgetowne tenant. Prior to the most recent renovations, this tenant experienced frequent floods (~1 per year) and had to run fans all day and night to prevent persistent moisture from forming mold and triggering her allergies. 

We look forward to sharing more stories like this one in the months ahead! 

For years, MAHT has advocated for changes to the State’s Massachusetts Rental Voucher Program (MRVP). Thanks to pressure from MAHT and our partners at the Citizens’ Housing and Planning Associations (CHAPA), we are now seeing results.

On January 26^th, Governor Baker released a FY2023 Budget Recommendation that outlines several significant changes to the MRVP. Included was a plan to lower MRVP tenant rent share from 40% to 30% of household income. This major change, which has long been spearheaded and championed by MAHT, will affect upwards of 9,500 low-income households. Lowering tenant rent share to 30% is within the Governor’s discretion to enact administratively, meaning that the Department of Housing and Community Development can make the change without going through the long budget setting process.