About the Transfer Fee Home Rule Petition
In 2015, Mayor Curtatone established the Sustainable Neighborhoods Working Group to pursue bold and innovative ideas that would support the City’s efforts to protect and preserve existing affordable housing, expand the City’s resources for creating more affordable housing, and address the need for middle-income housing for working families.
After nearly a year of research and deliberation the Working Group, which was chaired by Alderman Mark Niedergang and former City Housing Director Dana LeWinter, issued a series of recommendations, including that the City adopt a requirement of a fee on certain real estate transactions (known as a “transfer fee”) to support affordable housing, with specific exemptions to be established.
The updated version would exempt ALL owner-occupant sellers as well as ALL buyers who will be owner-occupants. The updated proposal would rather 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 cannot institute a transfer fee without the permission of the State Legislature. Therefore, the City is first seeking the approval of the Board of Aldermen to submit a Home Rule Petition to the 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 intent to launch a broad community discussion on this issue. The outcomes of that discussion would guide the deliberations about any final ordinance.
Affordable Housing Trust Fund
To further study this recommendation, the City retained consulting firm RKG Associates to conduct an analysis of the potential impacts of this initiative on Somerville’s real estate market and its contribution to the City’s affordable housing resources. The analysis found that the proposed transfer fee program could potentially raise between $6.6 million and $9.1 million annually, depending on real estate conditions and exemptions such as for owners facing a loss on the sale of their property or for long-time homeowners.
The Mayor convened a Real Estate Transfer Fee Task Force in December 2016 to study the issue in greater depth and provide a report for the Administration, the Board of Aldermen and the public. A report from Housing Director Michael Feloney on the recommendations of the Task Force along with a draft Home Rule Petition were submitted to the Board of Aldermen on January 11, 2018.
Opportunity for Community Input: Full Community Process
Under state law, the City cannot institute a transfer fee without the permission of the State Legislature. Therefore, the City is first seeking the approval of the Board of Aldermen to submit a Home Rule Petition to the 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 intent to launch a broader community discussion on this issue. The outcomes of that discussion would guide the deliberations about any final ordinance. The details of the fee including the types of exemptions and other requirements would then be determined after public feedback is gathered via the community process including an additional Board of Aldermen public hearing (or hearings) together with deliberations by the Board.
BOA Public Hearing April 4, 2018
The Home Rule Petition process does require that some details that cannot be changed at a later time be determined before submitting the Petition. For this reason, the Board of Aldermen held a public hearing on the matter prior to submission of the Home Rule Petition. The Board is currently reviewing and revising a draft Petition, submitted by the Mayor as a starting point, but not intended as the final version. At the hearing, the public was given the opportunity to voice support for or against the fee overall, as well as comment on a range of issues such as exemptions. Official written comment for the record to the Board of Aldermen was accepted through Friday, April 6, 2018, at 5 p.m. The Board of Aldermen will vote on the details of the final draft and whether to submit it to the Legislature.
Public Comment at State Level
If the Board of Aldermen approves the petition and it proceeds to the Legislature, community members can once again voice their opinions and provide feedback as part of the State legislative process. As more information about opportunities for public comment at the State level become available, they will be posted here.
- State Legislature to vote on whether to approve the Transfer Fee Home Rule Petition.
- If approved, the City will host a community process to discuss details of a potential ordinance.
- City will follow the framework of rules established by the Home Rule Petition to develop a detailed ordinance setting the final fee and criteria for what transactions are subject to the fee.
- The Administration would submit a draft Transfer Fee ordinance, within the framework approved by the legislature, to the Board of Aldermen for deliberation.
- The Board of Aldermen would hold a public hearing or hearings on the proposed ordinance before voting on any amendments and final approval.
The adjacent tabs on this page contain the draft ordinance, previous drafts, minutes of the meetings at which it was discussed by the Board of Aldermen’s Committee on Legislative Matters, the RKG analysis, a memo from Housing Director Mike Feloney reporting on the work of the Transfer Fee Task Force, the Sustainable Neighborhoods Working Group Report, and other relevant materials. Feel free to contact your Alderman, one or more of your four Aldermen-at-Large, or Sustainable Neighborhoods Coordinator Hannah Carrillo in the City's Housing Division with any questions. You can reach Hannah at [email protected] or 617-625-6600 x2575.
MA Joint Committee on Revenue
- June 20, 2018
BOA Committee on Legislative Matters
The Board of Aldermen’s Committee on Legislative Matters discussed this item at the following meetings:
- May 31, 2018
- May 7, 2018
- April 25, 2018
- April 11, 2018
- April 9, 2018
- April 4, 2018
- March 15, 2018
- March 1, 2018
- February 15, 2018
- February 1, 2018
- January 18, 2018
Drafts of Transfer Fee Home Rule Petition
- Approved Home Rule Petition from 5/31/2018
- Updated Draft from 5/23/2018
- Updated Draft from 4/26/2018
- Updated Draft from 4/24/2018
- Updated Draft from 3/20/2018
- Updated Draft from 3/13/2018
- Updated Draft from 2/28/2018
- Original Submission from 1/9/2018
Memos, Analysis, and More
- Transfer Fee Home Rule Petition Summary
- Transfer Fee Home Rule Petition FAQ
- Transfer Fee Impact Analysis from RKG
- Memo from OSPCD to Mayor Curtatone Re: Updates on the Real Estate Transfer Charge Task Force
- Memo Re: Financing of Transfer Charge Payments and Payment Responsibility
- Memo from OSPCD to Board of Aldermen Re: Insufficiency of Current Affordable Housing Requirements
- Proposed Funding Scenario Summary Sheet (4/24/2018)
- Handout: Proposed Amendments by Alderman Mark Niedergang (4/9/2018)
Affordable Housing Trust Fund
The Somerville Affordable Housing Trust Fund (SAHTF) was 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 must benefit low to moderate income households (with incomes at or below 110% of area median income).