House Speaker Ron Mariano (right), flanked by House Ways and Means Committee Chair Aaron Michlewitz (center) and Housing Committee Co-chair Rep. James Arciero (left), speak to reporters about their $6.2 billion housing bond bill redraft on June 3, 2024. Photo by Sam Drysdale | State House News Service
House Democrats will seek a vote this week on a bill that combines $6.2 billion in state borrowing and tax credits with policy reforms designed to unlock new housing production, including development of units on single-family lots.
With sky-high sale prices and rents suffocating residents, the House will try to shift the tide by pumping more money into existing housing programs and rolling out a few new strategies, but not the local-option transfer tax Gov. Maura Healey proposed.
The House Ways and Means Committee bulked up the five-year, $4.1 billion bill Healey filed in October (H.4138), calling for $2 billion to fix the state’s aging public housing stock and $1 billion to expand the Massachusetts Water Resources Authority’s service area into more suburbs with the goal of spurring housing production currently curbed by limited local water and sewer infrastructure.
Top Democrats sought to portray the proposal as a landmark – Housing Committee Co-chair Rep. James Arciero called it “the largest housing investment in state history” – and as merely one step toward untangling a thicket that for years has generated dire warnings.
Some estimates have suggested Massachusetts needs to generate 200,000 more units of housing to keep up with population growth and prevent workers from departing for other states.
“You don’t have the capacity to build all those units all at once anyway, so it’s ridiculous to think that you’re going to solve this with one bond issue. I think it’s the beginning of a process,” Mariano said Monday.
“We hear all the time about people not staying, college grads looking for more affordable housing, and I think that’s something we have to be aware of and we have to begin the process right away,” he added. “We can’t wait.”
The House plans to take up the redrafted bill (H.4707) on Wednesday.
Housing challenges were at the forefront of public concern at the outset of the 2023-2024 session, but lawmakers are only now about to embark on deliberations about concrete policy reforms, more than seven months after Healey filed her own proposal.
Healey has suggested her bill could lead to more than 40,000 new housing units, and House Democrats said Monday they’re unable to put an estimate on the number of new units Massachusetts could expect from the major funding commitment. One component of Healey’s bill that House Democrats removed – a local-option real estate transfer tax to fund affordable housing – would have generated around 3,000 new homes by the administration’s estimates. That move was cheered by a leading real estate group and lamented by the coalition of municipal officials, community activists and some Cape and Islands real estate figures that had been pushing the idea.
Funding Funneled to Existing Programs
Much of the bond authorization in the bill would recapitalize existing programs, typically at higher levels.
Close to half of the House bill’s bottom line covers just two provisions. It would direct $1 billion toward the MWRA expansion efforts, and make $2 billion – $500 million more than Healey proposed – available for repairs, rehabilitation and modernization to the roughly 43,000 public housing units in Massachusetts.
Many of those homes are in a state of disrepair, and WBUR and ProPublica reported last year that about 2,300 units were vacant.
Another $800 million in the bill would flow to the Affordable Housing Trust Fund, which works to create or preserve homes for families who earn about the median area income or less.
One idea House Democrats added to the mix would make $150 million available to help cities and towns convert commercial properties into multifamily residences or mixed-use options. Project sponsors could also qualify for tax credits worth up to 10 percent of development costs.
House Ways and Means Committee Chair Aaron Michlewitz said that proposal would “tackl[e] two different issues at the same time” by helping to create a path forward for vacant commercial properties, which have become more common since the COVID-19 pandemic rewired work patterns.
The bill also embraces Healey’s proposal to allow for accessory dwelling units, or ADUs, by right in single-family zones across the state. Supporters say those homes offer a viable option for larger families who want to keep adult children or aging parents close by, and the Healey administration previously estimated the reforms could lead to production of up to 10,000 ADUs in five years.
Bill Mostly Shaped by Mariano’s Lieutenants
The next decision for transfer fee supporters is whether to marshall support for any amendments to the House bill, which could provide a route to bring the measure into the fold.
Within hours of the bills release, representatives had already filed more than 325 amendments.
Virtually all of the major changes to Healey’s bill – one of the most impactful proposals of the two-year term – occurred in the final stage of review, the step controlled by Mariano’s top deputies.
The Housing Committee spent more than four months reviewing Healey’s proposal before advancing it without altering a single word, and the Bonding Committee also left the original bill intact. The House Ways and Means Committee, which unlike the other two comprises only representatives and no senators, then substantially raised the bill’s bottom line and spiked the transfer tax language.
Bond bills authorize capital spending but annual state borrowing amounts across a wide range of priority areas are limited by how much debt service the state can afford in its annual budget.
Michlewitz said he wants to take advantage of the April 2023 rating upgrade Standard & Poor’s Global Ratings awarded to Massachusetts.
“We’re trying to take advantage of our most recent bond rating increase. Now’s the time to go higher on that, to take advantage of it, as high as we can,” he said.
State House News Service staff writers Alison Kuznitz and Sam Drysdale contributed reporting.
