A long-awaited housing bond bill from Gov. Maura Healey has finally arrived, complete with proposals for $4.12 billion in capital spending, 28 policy proposals, three executive orders and two tax credits.
In addition to new policies aimed at ramping up housing production in the face of the state’s housing crisis, the bill is expected to lead to the creation of more than 40,000 new homes in combination with a tax relief package signed into law earlier this month.
“The cost of housing is the biggest challenge facing the people of Massachusetts. We said from day one of our administration that we were going to prioritize building more housing to make it more affordable across the state,” Healey said in a press release Wednesday. “The Affordable Homes Act delivers on this promise by unlocking $4 billion to support the production, preservation and rehabilitation of more than 65,000 homes statewide. It’s the largest housing investment in Massachusetts history. Together, we’re going to make our state a place where people can afford to move to and stay to build their future.”
The largest piece of spending by far comes in the form of $1.6 billion earmarked for the repair, rehabilitation and modernization of 43,000 public housing units across Massachusetts, three times the appropriation in the previous bond bill in 2018.
This spending includes $150 million for decarbonization; $100 million for mixed-income housing demonstration, or the replacement of aging developments with newer ones, which frequently include some market-rate units to subsidize the affordable units; and $15 million for accessibility upgrades.
“Our public housing stock in the commonwealth has lacked capital investments for decades,” said Executive Office of Housing and Livable Communities Secretary Ed Augustus. “The proposed investment by this administration meets the moment. It will create powerful ripples for decades to come to ensure that families and individuals live in communities they can take pride in.”
Several policy proposals in the bill also deal with public housing, such as allowing local housing authorities to regionalize without filing a home rule petition; allowing housing authorities to borrow against their capital funds; and establishing protections for tenants during redevelopment projects.
Some of the other policy proposals included in the bill are steps housing advocates have been asking for, including establishing a local option for real estate transfer fees allowing individual communities to raise money for affordable housing.
This proposal echoes a bill currently on Beacon Hill and would give cities and towns the option to, by majority vote, place a tax of 0.5 to 2% on the portion of real estate sales over $1 million, or the county median sale price. The policy includes exemptions for properties being used for affordable housing, transfers between family members and intergovernmental transfers, according to EOHLC.
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Another proposal would allow accessory dwelling units (ADUs) — sometimes called in-law apartments —less than 900 square feet to be built by right in single-family zoning districts everywhere in Massachusetts. Communities would not be able to place owner-occupancy requirements or parking minimums above one parking space on ADUs, and they would not be able to place any parking minimums at all within a half-mile of transit stations.
Municipalities would still be able to place reasonable dimensional requirements on ADUs, according to EOHLC.
EOHLC estimates that the ADU proposal could create 10,000 new housing units in the five years after its adoption, based on similar regulations introduced in New Hampshire and California.
What other policies are proposed?
Other policy proposals include establishing a process for the sealing of eviction records; establishing an Office of Fair Housing; allowing municipalities to pass inclusionary zoning regulations by simple majority, instead of a two-thirds majority; and creating a designation for seasonal communities with substantial seasonal variations in population and employment.
This last proposal would also create a Seasonal Communities Coordinating Council to provide recommendations to EOHLC on regulations to govern seasonal communities.
The bond bill includes two tax credit programs, including the newly established Homeowner Production Tax Credit, which would be available to developers to incentivize the production of homeownership units aimed at households making up to 120% of the area median income.
The bill would also eliminate the planned 2025 sunset for the Community Investment Tax Credit, which allows donors to local community development corporations or nonprofit community support organizations to write-off donations of $1,000 or more. The statewide cap on donations for this program would also be raised from $12 to $15 million.
Another major capital investment included in the bill is the Affordable Housing Trust Fund, which would receive $800 million if the bill is passed. The AHTF provides funding for housing projects affordable for households making 110% or less of the area median income. This would be a 100% increase over the 2018 housing bond bill.
Other major investments include $425 million for the Housing Stabilization Fund and Community Investment and Preservation Fund to support preservation, new construction and rehabilitation projects; $275 million for Sustainable and Green Housing Initiatives, aimed at transit-oriented and sustainable development; $200 million for the Housing Innovations Fund, which funds alternative forms of rental housing such as single-room occupancy apartments or transitional and permanent housing for people experiencing homelessness or substance abuse; and $175 million for the HousingWorks Infrastructure Program, which funds municipal infrastructure projects to allow for increased housing density.
The bond bill would also create a new program, the Momentum Fund administered by MassHousing, which would provide funding for housing development projects which have made it through the planning process but stopped being financially viable due to inflation or other constraints. This program would receive $50 million under the governor’s proposal
What executive orders were proposed?
Three executive orders were also included in the bond bill announcement. The first establishes a Housing Advisory Council to develop a statewide housing plan; another would create an Unlocking Housing Production Commission, which will identify ways to streamline housing production; and the final executive order directs EOHLC and the Division of Capital Asset Management and Maintenance to work with Lt. Gov. Kim Driscoll to create an inventory of government-owned property suitable for housing production.
This executive order is accompanied in the bill by a policy proposal that would streamline the process of disposition of state-owned land for housing purposes and a proposed $30 million for surplus property disposition.
“As a former local official, I’ve seen firsthand how new housing can transform communities and help them flourish. But we only get those benefits when people can actually afford to live in these homes,” Driscoll said. “The Affordable Homes Act is full of new tools for municipalities to help them implement the solutions that work best for the unique needs of their communities so that they can build consensus and build new homes.”
