City Rejects Property Tax Hike to Fund Affordable Housing

BOSTON-No one in this city was taken aback when city Mayor Thomas M. Menino won his reelection bid easily but it was surprising that the city responded relatively clearly to the ballot question on whether to enact the Community Preservation Act, which would involve a 2% surcharge on property taxes here. The answer was no.

The Act was question number one on the ballot and according to the latest poll results 43% of voters voted against the act while 32.4% of voters voted for it. The funds generated from the surcharge were to be used to pay for affordable housing and the preservation of historic and green space here. The bulk of the tax would have been paid by businesses because of the number of exemptions for homeowners and the commercial tax rate in the city. A coalition of business groups led by Fidelity Investments and including the National Association of Industrial and Office Properties, ran a campaign opposing the Act, emphasizing that with the downturn in the economy, this was not the time to be raising taxes.

A coalition of advocacy groups, including the Boston Preservation Alliance, the Massachusetts Affordable Housing Association, promoted the passage of the Act, emphasizing that it would raise $14 million in its first year, which would be matched by state funds. At the last minute, city Mayor Thomas M. Menino came out for the Act but that was apparently not enough to convince voters to open their wallets.

“It is disappointing,” Patrice Todisco, executive director of the Boston GreenSpace Alliance, tells GlobeSt.com. “I thought the vote would be closer. I was surprised.” Todisco says that it is unclear whether the coalition will try again to get the Act passed. “We tried in this cycle because it was a mayoral election,” she points out. “I don’t know what the next step will be. People need to remember that these issues aren’t going to go way just because the CPA wasn’t passed.”

David Begelfer, CEO of NAIOP, tells GlobeSt.com that while his organization is relieved that the Act did not pass, its rejection is viewed with mixed feelings. “We felt it was the wrong time to consider a tax increase, especially to an industry that pays 80% of the real estate taxes in the city,” he tells GlobeSt.com. “On the other hand we’re disappointed that we’re not on the same side as the housing advocates. We do feel we desperately need more affordable housing and we want to work with housing advocates on other initiatives to develop affordable housing.”

Begelfer points out that the business community supported the recent increase in linkage fees and payout period that developers will pay to the city for development projects. Those funds will go to affordable housing and Begelfer emphasizes that his organization is working with housing advocates to get the measure approved by the state legislature.