Legislators have made valuable strides towards tackling our state’s housing crisis with federal pandemic relief money. But more needs to be done, and soon. 

As of this writing, Gov. Charlie Baker is grappling with whether to sign the $4 billion bill allocating a large chunk of the commonwealth’s American Rescue Plan Act funds before Dec. 6, the bill’s pocket veto deadline.  

Perhaps the most exciting portion of that bill is the $624 million in allotments for housing production and other housing-related investments. This includes $65 million for efforts to boost homeownership, $115 million to boost the production of owner-occupied units, $115 million to boost rental housing, $150 million to fund the production of supportive housing and $150 million for maintenance of public housing projects.  

The legislature’s compromise spending plan leaves around $3 billion in ARPA money and a significant chunk of the state’s record budget surplus unspent. Given the scale of the state’s housing problems, legislators have the ability to comfortably grow their initial investment in addressing them. 

Funding for affordable housing projects is constantly in short supply. Construction of inexpensive owner-occupied units is critical to stabilizing communities and closing the racial wealth gap, as Jay Fitzgerald reported in last week’s issue of Banker & Tradesman, but proposals face serious obstacles. One prominent developer, HYM Investments’ Tom O’Brien, said such units would cost him 10 to 20 percent more to build in his massive Suffolk Downs project. And most developers, nonprofit or for-profit, don’t have the ability to cross-subsidize affordable units with other high-earning product as O’Brien has. 

Three of the state’s most prominent affordable housing groups recently called for Beacon Hill to pass a second ARPA spending bill specifically aimed at doubling the housing investments contained in this first bill.  

As the Citizens Housing and Planning Alliance, the Massachusetts Association of Community Development Corporations and the Massachusetts Affordable Housing Alliance noted, ours is the third least-affordable state in the nation for renters and has profound racial gaps in access to homeownership – gaps getting worse by the day as market conditions keep bidding up the price of homes. 

Heeding this call to invest over $1 billion in housing construction will find synergies in the legislature’s other big housing achievement this session: mandatory transit-oriented multifamily zoning in Greater Boston. While the Baker administration has slow-walked regulations implementing this new “MBTA communities” portion of the Housing Choice law, they are expected soon. And as towns and cities adapt their zoning to this new mandate, developers of all stripes will need help financing new affordable units on these new sites. 

We have the money. And Beacon Hill can be assured the immediate need for another $600 million in housing finance funds is there. When legislators reconvene next year, they should make this proposal a priority. 

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Beacon Hill Should Boost Funds for Housing

by Banker & Tradesman time to read: 2 min