Ed. note: Paul Mark, a student in the LL.M program at Georgetown University Law Center, and Research Assistant for thre Project on State and Local Government Policy and Law (SALPAL), is a State Senator for the Commonwealth of Massachusetts. This post is part of our "Voices from the Field" series
Skyrocketing housing prices in Massachusetts threaten the competitiveness of the Comminwealth at a time when the ability to work remotely has become more common, more desirable, and much easier for employers to sustain. At the same time, home ownership is increasingly out of reach for the average resident, even though in Massachusetts the average resident is likely to make an income higher than their peers across the country and have completed at least a bachelor’s degree. Renting is not a cheaper or more reliable backup either: the average monthly rent in Boston now hovers around $3,000 per month. Compare these prices to Massachusetts’ competitor states, California with now mostly lower rates and North Carolina and Texas with significantly lower average prices, and it becomes clear that the Commonwealth is at risk for outmigration that can hurt its economy and productivity.
Stabilizing this market was a priority for Governor Maura Healey after her election two years ago. A housing bond bill entitled The Affordable Homes Act , H. 4138, is a first step. It is intended to produce 200,000 new housing units in the Commonwealth by 2030. The bill would use direct funding to increase the supply of housing, facilitate the rehabilitation and modernization of public housing units, and provide assistance and protections to vulnerable tenants. This funding is intended to complement and expand upon recently enacted tax credits intended to encourage and support the development of affordable and market rate housing stock throughout Massachusetts.
In addition to direct investment and tax credits, H. 4138 also includes several policy initiatives intended to stimulate housing growth. Massachusetts is a place where direct democracy still exists in the form of the Town Meeting, which allows every resident of the town to vote directly on all town affairs including budgets and zoning rules. Following the lead of eight states, four of them in New England, a proposal in the Healey bill would change the rules for zoning statewide by allowing Accessory Dwelling Units to be built by-right in all districts zoned as single family. It would also change the rules for zoning by allowing inclusionary zoning districts to be adopted by a simple majority in a municipality as opposed to the current two-thirds majority.
A local option real estate transfer fee is also included in the proposal. Municipalities would be able to opt-in to establish a fee between 0.5% and 2% paid by the seller of property on the portion of the sale over $1 million, or the county median home sales price, whichever is greater. Revenue raised through a real estate transfer fee would be required to be used for affordable housing purposes, including for public housing, through a community’s municipal affordable housing trust fund. A bill to allow multiple municipalities to work together and combine their affordable housing trust fund resources could potentially be added to allow rural communities the flexibility to take full advantage of this provision.
There are also several innovative policy ideas included that are aimed at modernizing how and where housing stock is developed. Rental supports and tenant protections in the package are intended to keep people in their homes during the crisis and for the long term.
Goals of the new policy initiatives would include accelerating and supporting innovation strategies for housing, repurposing existing office and commercial spaces as residential units, developing new housing around reliable public transit zones, and investment in the acquisition and redevelopment of abandoned and foreclosed properties. Governor Healey has actively been seeking unused or underutilized state properties to be converted into housing as well as opportunities for responsible development on state owned land.
In Massachusetts, unlike most states, bond bills must be filed by the Governor in order to be considered by the legislature. Now that Governor Healey has filed H. 4138, the House and Senate will begin the deliberate process of evaluating her proposals and putting their own stamp on the bill. The public hearing before the Joint Committee on Housing took place January 18, with testimony from mayors and other stakeholders.
Massachusetts is currently a trifecta state, with Democrats holding both the Governor's seat and the majority of each house of the Legislature. Yet political observers believe that there will be significant changes to the bill as it goes through the hearing process, with the ultimate content still to be determined. Whatever the result, it looks like a win for affordable housing in the Commonwealth.