Massachusetts Legislature Passes Largest Housing Investment in State History
$5.16B housing bond bill adds resources for new units, makes sweeping policy changes to simplify and incentivize development
(BOSTON—8/5/2024) The Massachusetts Legislature has passed the Affordable Homes Act, the largest housing investment in Massachusetts history and a powerful first step in tackling the state’s housing affordability crisis.
The legislation authorizes $5.16 billion in bond authorizations and tax credits to spur housing production in Massachusetts, while implementing sweeping policy initiatives to facilitate the development of affordable housing and preserve public housing in Massachusetts.
“I’m incredibly proud of the investments included in this bill, which together make the largest investment in affordable and middle-income housing in the history of the Commonwealth. Given that Massachusetts is one of the most expensive states in the entire country to buy a home or rent an apartment, the funding and tax credits provided by this bill will be crucial as we work to ensure that every Massachusetts resident can afford to live here, work here, and raise a family here,” said House Speaker Ronald J. Mariano (D-Quincy). “I want to thank Governor Healey for filing the Affordable Homes Act, as well as Chairman Michlewitz and Chairman Arciero for guiding this bill through the legislative process. I am grateful to all my colleagues in the House, and to our partners in the Senate, for carefully considering every aspect of this legislation, and for recognizing the need for significant action on housing.”
“An affordable, equitable, and competitive Commonwealth is one in which a renter can find an apartment within their budget, a family can afford a down payment on their first home, and residents aren’t priced out of communities where they want to live,” said Senate President Karen E. Spilka (D-Ashland). “Today the Legislature took concrete action to make that vision a reality, a first step in rectifying decades of underinvestment that has led to our housing crisis. I am profoundly grateful for Senator Brownsberger’s leadership of the conference committee and Senator Edwards’ leadership on the Senate bill and the compromise legislation, as well as to each member of the Senate, and our partners in the House for recognizing the urgency of this issue and taking meaningful action.”
“The Affordable Homes Act is the largest investment in housing in the history of the Commonwealth. The investments we passed in this legislation reduce barriers for individuals seeking affordable home options; increase housing production and inventory; and create more tools in the toolbox to help cities and towns offer more affordable housing options,” said Representative James Arciero (D-Westford), House Chair of the Joint Committee on Housing and House Chair of the conference committee. “I'm incredibly proud of this encompassing bill, as I would like to thank House Speaker Ronald Mariano and House Ways and Means Chairman Aaron Michlewitz for their leadership on this important legislation that will positively impact Massachusetts's housing landscape for years to come. I would also like to thank Joint Committee Co-Chair, Senator Lydia Edwards and my Senate conferee, Senate President Pro Tempore, Will Brownsberger, for their leadership and diligence throughout the process.”
“The high cost of housing makes it hard for people to stay in Massachusetts,” said Senate President Pro Tempore William N. Brownsberger, Senate Chair of the conference committee. “This bill is a big step forward and will help control housing costs over the short and long run. Many, many people contributed to this bill and I’m glad that it came together in time to cross the finish line.”
To help municipalities convert commercial properties into multi-unit residential or mixed-use properties, the bill makes project sponsors eligible for a tax credit of up to 10 percent of the development costs upon completion of a project.
The bill includes a new tax credit to incentivize production of homeownership units targeting households with incomes of up to 120 per cent of the area median income (AMI). It also makes permanent the Community Investment Tax Credit (CITC) while expanding the statewide cap on donations from $12 million to $15 million. Further, it extends the sunset of the Historic Rehabilitation Tax Credit through December 31, 2030, while increasing the total available amount from $55 million to $110 million.
Among the many policy initiatives included in the bill to create more housing is a provision to permit one accessory dwelling unit (ADU) equal to or less than 900 square feet to be built by-right on a property in single-family zoning districts in all Massachusetts communities. The bill further provides consumer protections to help prevent homeowners from being pressured into waiving a home inspection, protects tenants who have a years-old eviction record from having that record held against them when securing new housing, gives seasonal communities new tools to tackle their unique housing challenges, and protects renters from having their unit redeveloped into a condominium.
“This comprehensive bond bill will help address the Commonwealth’s undeniable housing crisis. By putting billions of capital resources towards constructing new homes and towards rehabilitating our aging public housing infrastructure, we will be making a difference to the thousands of residents who live in these facilities,” said Representative Aaron Michlewitz (D-Boston), Chair of the House Committee on Ways & Means and a member of the conference committee. “The policies also contained in this legislation will help incentivize housing production, increase affordability options for residents, and help alleviate the pressure on the housing inventory as a whole.”
“This bill is the necessary course correction our housing system needed,” said Senator Lydia Edwards (D-East Boston), Senate Chair of the Joint Committee on Housing and a member of the conference committee. “From zoning reform to capital investments to protecting tenants, we did it all. We laid a great foundation, and I am grateful to my co-conferees, Senate President Spilka, and Governor Healey for their leadership.”
Bond authorizations include:
Public housing
$2 billion to support the repair, rehabilitation, and modernization of over 43,000 public housing units across Massachusetts, with 25 per cent of the funds dedicated to preserve housing for those with incomes below 30 percent AMI.
$150 million to decarbonize the public housing stock and $15 million for accessibility upgrades.
$200 million to support Local Housing Authorities (LHAs) who partner with developers to add mixed-income developments on LHA land, leveraging funds to maintain and preserve public housing while increasing the overall housing supply.
Housing vulnerable populations
$200 million to support innovative and alternative forms of rental housing, including single person occupancy (SPO) units, transitional and permanent housing for people experiencing homelessness, housing for seniors and veterans, and transitional units for persons recovering from substance use disorder. 25 per cent of funds must be used to fund projects which preserve housing for those with incomes below 30 per cent AMI.
$70 million to support the development of appropriate community-based housing for Department of Mental Health (DMH) and Department of Developmental Services (DDS) clients
$60 million to modify homes of individuals or families with disabilities or seniors so that they may maintain residency or return home from institutional settings.
$55 million to support appropriate housing for people with disabilities who are not DMH or DDS clients.
Housing development
$800 million for the Affordable Housing Trust Fund which provides resources to create or preserve affordable housing for households earning less than 100 per cent of AMI.
$200 million to accelerate the development of mixed-income multifamily housing.
·$100 million for the Middle Income Housing Fund which funds housing development for households earning less than 120 per cent of AMI.
$100 million for the Commonwealth Builder program for the construction of affordable single-family homes for households earning between 70 and 120 per cent of AMI, primarily in Gateway Cities.
HousingWorks
$425 million to support preservation, new construction, and rehabilitation projects through the Housing Stabilization Fund and the Community Investment and Preservation Fund.
$275 million to consolidate the existing Transit Oriented Housing Program and the Climate Resilient Housing Program and create a new, innovative program to accelerate and unlock new housing. 25 per cent of the funds must be used to fund projects which preserve housing for those with incomes below 60 per cent of AMI.
$175 million for municipal infrastructure projects to encourage denser housing development.
$50 million to provide payments to municipalities that receive a Housing Choice designation through high housing production and/or demonstration of best practices, including a grant program to assist MBTA Communities in complying with the multi-family zoning requirement in the MBTA Communities Law.
$50 million for grants to municipalities for planning and zoning initiatives that support housing production, workforce training and economic opportunities, childcare and early education initiatives and climate resiliency initiatives.
$20 million to provide incentive payments to municipalities who adopt smart growth housing districts.
Having passed both chambers, the bill now goes to the Governor for her consideration.
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