Mayor Ballantyne offered her views on The Affordable Homes Act during a public hearing of the state’s Joint Committee on Housing.

Somerville Mayor Katjana Ballantyne weighed in on Thursday, January 18, as the Joint Committee on Housing took testimony on H.4138, The Affordable Homes Act in the State House’s Gardner Auditorium.

Ballantyne’s testimony is as follows:

Dear Chairs Arciero and Edwards, and members of the Committee,

I submit this testimony representing both the City of Somerville as Mayor and as Co-Chair of the Metropolitan Mayors Coalition Regional Housing Taskforce, a coalition of 16 cities and towns in Greater Boston. First and foremost, I want to express my deep gratitude for the wide range of critical funding and policy initiatives which the Healey Administration included in the Affordable Homes Act (AHA). These initiatives, including critical new funding for public and supportive housing and expanding allowable uses of simple majority votes to clear the path to new housing development, give municipalities hope that sustained stability is on the horizon for our residents. I am grateful to the Governor and her team for taking the time to put together this impactful, thoughtful, and robust bill that, once passed, will have resounding impacts on the entire Commonwealth.

Transfer Fee

I am thrilled to see the inclusion of a local option transfer fee in H.4138, The Affordable Homes Act (Sections 19-20). As you know, the City of Somerville and other municipalities around the state face tremendous barriers in regard to the development and preservation of affordable housing given increasing construction and land costs and high interest rates. The City of Somerville and cities and towns throughout the state have recognized that a real estate transfer fee is our greatest hope for a new local revenue tool to fund affordable housing. Over the past several years the amount of local funds that cities and towns need to contribute to affordable housing development projects, even where projects receive state and federal funds, has dramatically increased. We are rapidly depleting funds available in our affordable housing trust fund and without new revenue we will be stalled in our ability to move forward critical affordable housing projects and programs.

As you consider the Governor’s proposal, I urge you to include local option transfer fees in all subsequent versions of the bill, with particular attention to the inclusion of the following components:

Provision/Reason for Inclusion

Local Option/Transfer fees must remain local options so communities that don’t want or need them can simply choose not to opt in.

Appropriate Threshold for Statewide Use/Allowing communities to set a threshold higher than the statewide threshold will allow them to tailor local transfer fees to local needs and market conditions.

Threshold Flexibility/Allowing communities to set a threshold higher than the statewide threshold will allow them to tailor local transfer fees to local needs and market conditions.

Reg’l Affordable Housing Commissions/Allowing collaboration between multiple municipalities through regional affordable housing commissions is critical to making the tool available for rural communities across the Commonwealth.

Fee Bearer Flexibility/Allowing communities flexibility to determine whether buyers or sellers of a property bear fees will enable them to tailor their local transfer fee to local needs and market conditions.

Further Local Exemptions/Allowing municipalities to create further local exemptions to transfer fees through ordinance will enable them to protect vulnerable populations in their communities. Vulnerable populations differ by community, and thus further local exemptions are also necessary in some cases to prevent vulnerable communities.

Applying Fees to Full Transaction/Allowing municipalities to apply fees to the full amount of transactions, rather than only the amount in excess of the threshold, will allow communities with higher needs and sales prices closer to the $1,000,000 threshold to generate significantly more revenue, which is desperately needed to fund the increasing costs of affordable housing development

Eviction Sealing

Another policy I am thrilled to see included in this bill is eviction sealing. Our Office of Housing Stability works with approximately 1400 households per year, many of which need new housing to avoid homelessness. Eviction records are too often a barrier to obtaining new housing even where eviction cases were dismissed, tenants prevailed, or cases were brought for no fault reasons such as building sales. I strongly support inclusion of this critical policy tool in the final housing bond bill. I also support modifications to the language in the AHA as it relates to eviction record sealing which includes the ability to have the automatic sealing of eviction cases where cases were dismissed, tenants prevailed, or cases were brought for no fault reasons.

Momentum Fund (“Social Housing”)

I am very excited to see that the AHA has included $50 million dollars for development of a Social Housing pilot. We need to continue to innovate and incorporate new strategies into our response to the Housing crisis. Social Housing seems to be a promising part of the state’s affordable housing production agenda. We need to keep funding for this type of innovation in the AHA.

Neighborhood Stabilization

In addition, I am extremely pleased to see $50 million in the AHA for neighborhood stabilization. Given Somerville’s status as one of the densest cities in the nation, it is critical to have tools in our tool chest to allow for the acquisition of existing buildings as there are limited places we can develop new construction. Somerville administers a program called the 100 Homes program which does just this. Neighborhood Stabilization funds may be a lifeline for cities such as ours needing to purchase and rehab buildings to prevent displacement of long time Somerville residents.

Last, I want to note two critical tools that I strongly urge be included in the final version of the AHA.

Right to Counsel

I strongly urge inclusion of $7,000,000 in funding for a right to counsel initiative since legal representation is a critical component of any successful Anti-Displacement strategy. Currently there is a huge disparity in the percentage of landlords and tenants with representation in court. In addition, attorneys working with tenants can often find win-win solutions to keep their clients housed or enable them to relocate in a way that is acceptable to both the landlord and the tenant.

Tenant Opportunity to Purchase (TOPA)

Lastly, I strongly urge inclusion of language to provide tenants and their agents the right to notice that their buildings are being sold and a right of first purchase – often known as “TOPA”. Market sales are huge drivers of displacement throughout the Commonwealth. Over 50% of our three family homes were sold by investors according to the recent MAPC Homes for Profit study. Tenants and non-profits simply cannot compete with investors looking to maximize profit. We do not have much open space for new affordable housing to be built in Somerville – the opportunity to purchase existing buildings at fair market prices and to keep tenants in their homes is critical to our Anti-Displacement efforts. Somerville has a pending HRP on this and I strongly urge its inclusion in H.4138.

Thank you.