The Cambridge City Council on Monday voted unanimously to seek permission to put a special fee on certain real estate transactions. It will submit a home rule petition to the state legislature asking to enact a real estate transfer fee.
If the legislature advances the fee, Cambridge could place up to a 2 percent tax on the value of real estate transactions above $1 million. Revenue raised by the fee would go towards funding affordable housing throughout the city.
The petition likely faces slim odds. Somerville submitted its own home rule petition for a transfer fee in 2018, which Rep. Mike Connolly has reintroduced each session since. So far, no vote has been taken on the bill. About ten other proposals from cities and towns across the state have met a similar fate.
Governor Maura Healey proposed legislation in 2023 that included a provision to allow all municipalities to enact a transfer fee (given certain property value requirements), but that also failed to make it through the legislature.
Councillor Jivan Sobrinho-Wheeler, a vocal advocate of the transfer fee, said he thinks an enabling act like the one Healey proposed is the city’s best bet for getting the transfer fee authorized by the state.
“Cambridge’s home rule petition is one way the city can help keep attention and pressure on the issue, and I’m glad we moved forward with it last night,” Sobrinho-Wheeler told Cambridge Day via email.
The proposal has been discussed at several city council meetings this year. The council was poised to pass it during its last regular meeting when Councillor Tim Flaherty proposed a last-second amendment to move the onus of paying the fee from the seller to the buyer. The council moved to table the petition to give them more time to consider the amendment, which passed with eight councilors voting in favor and one, Councillor Ayah Al-Zubi, voting present.
While the proposed fee could be negotiated between the buyer or seller, Flaherty said he introduced the amendment as an obstacle for big property developers.
“If it serves as a block to developers buying up homes for the purpose of demolishing them and constructing apartments with zero affordability requirements, then I’m in favor of it,” he said during last night’s meeting.
Councillor Patty Nolan noted that the fee would be factored into the cost of the property regardless of who pays it. She also highlighted the revenue possibilities it could bring, primarily from corporations.
“The overwhelming bulk [of revenue] will come from commercial property transfer, which is in the tens and fifty millions of dollars,” Nolan said. “We also know it may be a little bit longer for the legislature to pass it, but we really should keep trying.”
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