Q: What happened in Boston on Tuesday night will affect the region’s housing.
A: Question 5 in Boston passed!
Q: What’s that?
A: It was a ballot measure that increased property tax on Boston residents by 1 percent. This money will be dedicated to affordable housing, recreation, and historic preservation projects. The expectation is that 70 percent of these funds will be earmarked for affordable housing. This initiative follows the Community Preservation Act guidelines, to learn more.
Q: What will it cost Boston homeowners?
A: The owner of a $500,000 house will pay an additional $24 a year. Businesses are taxed, too.
Q: How much money are we talking about?
A: The Boston Herald estimates that this will total to $16.5 million a year. This is a substantial economic driver for affordable housing. Year after year, this could change the face of Boston and restore workforce housing to our area. When affordable housing is available, it stabilizes prices for everyone in the area.
Q: What does Boston’s affordable housing have to do with housing elsewhere in the region?
A: When housing prices are stabilized in one town or city, the landlords in surrounding towns and cities must stay competitively priced. This initiative will create a steady stream of affordable housing that will lead to rental price stabilization. It should not shock the housing economy into any sudden drops in rental pricing.
The opposite happened when rent control in Cambridge and Boston was abolished, by ballot question in 1995. There were sudden rental price increases, a sudden increase in housing purchase demand, a jump in property rehabs and resales. By September 1997, rents roughly doubled throughout the greater Boston area. Sale prices also jumped, but this was due to a combination of economic factors. Increased demand was caused by both the end of rent control and the beginning of the national real estate bubble.
Q: Is Question 5 passing good news for wanna-be house hunters?