Q: Yesterday’s headline in @BostonGlobe begs a question about distributive justice, the holy use of money, & some would argue redistribution of wealth.
— Bill Wendel (@RealEstateCafe) January 16, 2019
Housing Justice is emerging as a political issue, and real estate transfer taxes present an opportunity to redistribute wealth. Cambridge, Somerville and Boston are first movers on a real estate transfer taxes proposed in cities and towns across Massachusetts, as documented in the lead story in the Boston Globe above. Could real estate transfer taxes help the state live up to it’s name — the Commonwealth of Massachusetts? What role might faith communities play developing and implementing potential options? That question generated our highest engagement rate on twitter ever!
What if faith communities worked with the FinTech / RETech / PropTech community to explore options and policy implications? What would MLKing do? We asked a similar question 5 years ago but policymakers failed to act then: Will runaway bidding wars create real estate refugees in Cambridge? What would MLK do?
Hackathons are creative ways for anyone to generate ideas — time to invite multiple stakeholders to Hack the #RETransferTax?
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Dear members of the City Council,
From my perspective as an affordable housing advocate, the proposed real estate transfer tax is:
Not bold, and
Those three strikes do not mean you should count it out. To the contrary, it’s a rallying cry to count more than luxury real estate transactions. Count on data in the MLS and count on people of God and goodwill. Really, data points to opportunities and scripture points to social justice teachings on redistributing wealth (and the roots of Habitat for Humanity).
Some might be impressed that a 2% transfer tax on 73 MLS sales over $2M last year in Cambridge would have generated nearly $4.4M in revenue, or approximately enough to build nine affordable housing units at $500K. What’s more impressive — or maybe depressing — is that the 7 homes in Cambridge sold $500k over their asking price last year. Yes, a half a million dollars over asking price generating bidding war premiums totaling $5M. In other words, bidding wars on just 7 luxury homes in @CambMA could build 10 “affordable properties” at $500K each.
Need one argue that the “Gilded Era” of Cambridge real estate has reached unthinkable heights? When winning bids soared $50K over asking price five years ago, some called it “crazy;” now that winning bids are soaring 5 to 10 times that amount, is it time to call it a moral crisis — or market opportunity?
Your answer may depend on whether you think Cambridge is blessed or cursed with an embarrassment of riches. You need not be a member of the clergy or a billionaire to answer that question. We can cocreate innovative responses by engaging multiple perspectives.
In a handful of hotspots around the world, 15% transfer taxes are foreign speculators are finally beginning to tame housing prices. Should Cambridge follow their lead or can we engage the local FinTech / RETech community to do something new, something innovative, and something that leverages the “holy use of money?” For some in the faith community, that’s a moral imperative; for others in the social good community, it’s an opportunity to demonstrate the innovation economy that’s attracting global wealth to Cambridge.
That concentration of wealth begs for a response of biblical proportions. Let’s show the world what’s possible in this City of God and civic good. It’s a fitting rallying cry as we approach Martin Luther King Day.
If God-talk tunes you out, then tune into this: Last year, the PropTech sector attracted $12 BILLION in funding. Can we count on their participation if we begin redistributing real estate wealth, not by focusing solely on a real estate transfer tax but by envisioning and leveraging financial incentives that work within and outside the existing real estate ecosystem?
Let’s see if we can do something new, something bold, and something that exceeds our expectations. Thank you for the opportunity to share my perspective.