After months of research, debate, and refinement the Real Estate Transfer Fee Home Rule Petition has been finalized, approved by the city and is set to be scrutinized by the state legislature.

By Jim Clark

At their latest meeting last week, the City of Somerville Board of Aldermen unanimously passed the final draft of the Home Rule Petition (HRP) designed to target and impede targets house flippers, speculators and investor-owners.

The HRP was the subject of much debate between public officials and the public at large. Many in the community came forward at public hearings to express their views on the matter, both pro and con.

The HRP would authorize the city to impose a fee of up to 1% on investors, developers, and absentee landlords who buy property in the City of Somerville, as well as up to a 1% fee on investors, developers, and absentee landlords who sell property in the city.

Under state law, the city could not institute a transfer fee without the permission of the state legislature. Therefore, the city first sought the approval of the Board of Aldermen to submit the HRP to the state legislature to seek this general permission.

If the legislature approves the petition, the fee will not automatically go into effect. Rather at that time, once it is known whether the city has the option of establishing a transfer fee, it is the city’s stated intent to launch a broad community discussion on this issue. The outcomes of that discussion would guide the deliberations about any final ordinance.

Once implemented, revenues generated by the transfer fee would be directed to the Somerville Affordable Housing Trust Fund (SAHTF), created in 1989 by a city ordinance to preserve and create affordable rental and homeownership units in Somerville, and to carry out programs to directly assist homeowners and renters. All of its activities are intended to benefit low to moderate income households (with incomes at or below 110% of area median income).

Prior to the final vote on approval of the HRP at last week’s Board meeting, a number of procedural matters were addressed.

The Director of SPCD was asked to prepare a detailed explanation of how funding from a transfer fee or other local sources could fund housing initiatives.

Additionally, the Director of SPCD was asked to share options for establishing the residency status of prospective buyers, as related to exemptions and the proposed transfer fee.

Also, the Administration was asked to draft the minimally necessary language to amend the HRP to allow a separate fee on the buyer and seller based on their status as a resident/owner-occupant, including estate protection for a decedent who has such status.

After the HRP was approved by the Board, Mayor Joseph Curtatone immediately signed the document.

In a public statement, the mayor expressed his gratitude to the Board for bringing the process to completion.

“Huge credit to the BOA for the serious, open process that led to this vote,” said the mayor. “They made thoughtful amendments and built consensus. Community advocates also played a big role, keeping us focused on the big issue (a housing emergency that must be addressed) and asking tough questions that demanded serious answers. The city’s housing and legal departments also burned the midnight oil to make sure every i got dotted and every t got crossed. This is how government is supposed to work.”

The mayor also offered his thanks in advance to the Somerville legislative delegation. “They have already been involved in this process and they are ready to support this to the hilt as moves to Beacon Hill.”