All of sudden, Boston’s proposed linkage bill is in danger of becoming unhinged.
The home-rule petition appeared to have momentum earlier this month when members of Boston’s state senate delegation agreed on a revised version of a bill that stalled at the State House last year due to opposition from some legislators, including Sen. Marian Walsh, D-West Roxbury. Backed by Mayor Thomas Menino, the measure increases the linkage fees Boston developers pay to fund affordable housing and job training, and also accelerates the time period under which the payments have to be made.
Although the proposal initially had the backing of many business groups and real estate interests, such support is eroding. Along with the declining economy, business leaders are concerned about November’s election in which Hub voters will decide whether to adopt the Community Preservation Act. Under that new Massachusetts law, cities and towns can receive matching state funds if they opt to place up to a 3 percent surcharge on property taxes. The money can be used for affordable housing, historic preservation or other civic uses. Boston could raise upward of $52 million under its plan, according to supporters.
But the Boston Municipal Research Bureau, a city watchdog agency supported by business interests, is concerned by the recent placement of the CPA on the ballot. It would impose a 2 percent surcharge on Boston property owners, with the BMRB estimating that 81 percent of the levy would fall on the commercial sector.
“Certainly there is no way to talk about the linkage bill now without talking about the Community Preservation Act,” BMRB Executive Director Samuel Tyler said last week. “In terms of business support, I think they both go hand-in-hand … It would really be a double hit.”
Greater Boston Real Estate Board Chief Executive Officer Edwin J. Shanahan expressed similar concerns, and said his trade group is also hesitant because it has not seen the revised version of the linkage bill. The piece was submitted to the Boston City Council last week for its approval prior to moving to the State House, but Shanahan said GBREB has not been briefed on those alterations.
“I would ask what are the changes, and how do they impact developers, especially in light of the fact that things have changed so dramatically since Sept. 11,” Shanahan said, referring to the World Trade Center attacks. “Everything is very much in a state of flux at the moment.”
Interestingly, Boston Redevelopment Authority Director Mark Maloney agrees with Tyler’s main point, acknowledging that the CPA and linkage bill would represent a form of “double taxation” for developers. The problem, Maloney said, is that the CPA is more suited for suburban communities which do not have funding mechanisms in place for affordable housing, whereas that is linkage’s main goal. In addition to calling the 2 percent levy “a significant number,” Maloney said those who crafted the CPA initiative should have acknowledged the presence of the linkage formula.
“We would think that the CPA needs to be softened so it is respectful of the [Boston] business community that already supports housing,” Maloney said. He suggested the local version of the CPA could be modified, perhaps providing credits for those who support one source or the other.
“There are ways to do it,” said Maloney, pledging his willingness to bring the business community and CPA members together. He said he has already been in contact with the Greater Boston Chamber of Commerce regarding the matter, and is committed to hammering out a compromise.
Seen as a way of ensuring that the benefits of new construction are enjoyed by all residents, the city has had a linkage bill in place since 1987. Under the home-rule petition, it would require developers of large-scale projects to pay $7.18 per square foot for housing and $1.44 per square foot for job training. That compares to current per-square-foot rates of $5.49 for housing and $1.09 for job training. Developers would also have pay the fees within seven years vs. the current 12-year timetable.
Beyond the CPA matter, Shanahan said his members might be reluctant to back linkage given the tenuous nature of the economy. “We are clearly in a recession, and some experts are talking about a depression,” he said, adding, “We just have to look at the whole picture and ask, ‘Is this the right time?'”
Maloney, however, insists the time has long passed to hike the linkage fees considering that the 1987 law allowed the city to incremental three-year raises tied to the Consumer Price Index. “It is not an increase beyond what was originally contemplated many years ago,” he said. “I think it is justifiable even if the economy is softening.”
Other Boston state senators who have come out in favor of the latest home-rule petition for linkage include Sen. Dianne Wilkerson and Sen. Robert Travaglini. The revised plan was crafted by a 27-member commission appointed by the mayor last October, a group that included residents, housing activists and private developers. Some of the commission members are also prime supporters of the CPA proposal.
