Affordable housing activists are worried that an amendment to the housing bond bill passed by the legislature last week could undermine the state’s affordable housing law, Chapter 40B. “It raises a lot of questions, and the consequences are unknown,” said Rachel Heller, director of public policy for the Citizens’ Housing and Planning Association. “We think it could have a significant impact on housing development in the state.”
Chapter 40B allows developers to proceed with a project despite a town’s objections so long as 25 percent or more of the units being built will be sold as affordable housing and that fewer than 10 percent of the existing housing units in town are deemed affordable under the state’s housing laws. The measure had often proved unpopular in development-averse towns, though a proposal to repeal the law failed to pass the ballot in 2010.
Now, however, the town of Norwood seems to have found a way around the law. In both the House and Senate versions of the $1.4-billion housing bond bill by the legislature last week, an amendment was included that would prevent a 40B project from being built in an area if the town has created a certain kind of tax break, called a TIF, to incentivize commercial construction there.
If passed by the governor, the amendment will block the construction of a 296-unit affordable housing project on the site of a former Polaroid plant, proposed by Braintree-based Campanelli. Campanelli has already completed two projects on the site, redeveloping former industrial buildings for office and lab use.
TIFs Vs. DIFs
But Norwood is far from the only town that may be affected by the amendment. Tax Increment Financing zones, or TIFs, are used to incentivize development across the country. In Massachusetts, TIF and the similar District Improvement Financing, or DIFs, are highlighted as part of the “smart growth toolkit” state planners provide to towns, said Jennifer Raitt, chief housing planner for the Metropolitan Area Planning Council.
The measures provide tax breaks to businesses relocating to or remaining in an area, as well as allowing for funds to be provided to upgrade or remediate sites, with the understanding that future taxes from the area will be used to cover the costs of the deal. The idea is that by enticing a large employer or a new project to anchor a certain neighborhood, more businesses will be attracted to the district and the value of nearby properties will be increased, increasing the amount of taxes generated by the parcels in years to come.
How effective TIFs are at incentivizing development and preserving jobs remains a matter of debate. But they’ve been a fairly popular tool in the state. The most recent survey undertaken by the Department of Housing and Economic Development shows 561 TIFs were created in dozens of Massachusetts towns between 1995 and 2012, covering areas as small as one building or as large as an industrial park.
How many of the TIFs that have been created are still active is unclear. TIFs are generally created with a built-in time limit that caps the number of years the abatement will be in effect. But towns may elect to continue providing the relief to a certain business on an individual basis even after the incentive lapses, or elect to renew the entire agreement.
It’s unclear whether simply having a TIF in place – even if inactive – would allow a town to block a 40B development. And while the Senate version of the bond bill applies only to existing TIFs, the House version could apply to any area where a TIF is created in the future. That could allow towns to preemptively block 40B developments, advocates worry.
Already, the measure has attracted attention: Republican state Sen. Robert Hedlund of Weymouth, an advocate of 40B reform, temporarily yanked the bond bill from the floor when he learned of the amendment, saying his own district contained several projects more onerous then the one planned for Norwood.
Campanelli, for its part, declined to comment on what it plans to do with the site if the amendment is signed into law. “We have a long history of working closely and cooperatively with the town of Norwood and with the neighbors who are most immediately affected by development at Upland Woods,” Campanelli partner Dan DeMarco said in a statement. “We know that there are important local concerns that must be addressed. As property owners in the area we expect to be part of this process and look forward to working closely with the ZBA and other local officials throughout this process.”
Email: csullivan@thewarrengroup.com
