MARK LEFF
‘Major initiative’ needed

With the gubernatorial election just a week away, Bay State Realtors, homebuilders and housing advocates are watching closely and hoping that housing will become a top priority for whoever takes over the corner office.

Expanding affordable housing programs, preserving the existing affordable housing stock and maintaining existing laws that have spurred housing production in the state are among the issues they want the next governor to keep high on the agenda.

“What we think we need is a major initiative led by the next governor like we have had on health care and education reform to really focus on how the regulatory environment is choking the supply of new housing,” said Mark Leff, president-elect of the Home Builders Association of Massachusetts and senior vice president of Salem Five, a Salem-based bank. “I guess what we’re not looking for is more studies Â… I think the issue has been studied and I think [gubernatorial candidates] are familiar with the causes of our [housing] problems.”

Housing has been identified as a key economic development issue in Massachusetts in recent years as business groups and numerous studies have highlighted how land-use policies are driving housing costs up and helping to prompt young working families and professionals to leave the region for states where housing is less expensive. Hospitals, educational institutions and businesses have said one of the key obstacles in recruiting and retaining workers is the region’s steep home prices. Polls have shown that housing is among the top concerns of Bay State residents, closely behind health care and public education.

Massachusetts was the only state to lose population for the past two years in a row, and some economists have pointed to the state’s high cost of living as a key reason for the exodus. The state has lost residents between the ages of 25 and 34 at a greater rate than the rest of the country.

David Wluka, a Sharon real estate broker who is president of the Massachusetts Association of Realtors, said the candidates for governor have emphasized the importance of bolstering the state’s educational system. But Wluka said it’s also important to remember that students graduating from the state’s colleges and universities are opting to live elsewhere.

“They’re leaving because they have no place to live or they can live much more cheaply in other markets,” said Wluka. “We need both workforce housing and housing for our young graduates and young professionals.”

Wluka said he would like to see the candidates offer a housing agenda “that’s more clearly spelled out.”

“[None of the candidates] are against housing Â… The question is, what will they do about it?” he added.

Wluka said the next governor must support Chapter 40B, the state’s so-called anti-snob zoning law, which has been credited with creating about 43,000 new housing units; and strengthen and expand Chapter 40R and 40S, recently passed laws that provide financial incentives to communities that make it easier for housing to be built in smart-growth zoning districts.

He added that the new governor must find a way to bring more jobs to western Massachusetts, where housing is less expensive, and more affordable housing to eastern Massachusetts, where jobs are plentiful.

Peter Forman, president of the South Shore Chamber of Commerce, said both Lt. Gov. Kerry Healey, the Republican candidate, and her Democratic opponent Deval Patrick understand the connection between the high cost of housing and the effect it’s having on the labor force and economic development.

“They get it and they both seem to get that the problem is largely related to permitting and local land-use regulation,” said Forman, adding that they probably have different approaches to solving the problem.

‘Leading the Way’
All of the candidates – Healey, Patrick, Independent Christy Mihos and Grace Ross of the Green Rainbow Party – have discussed the need for more affordable housing. But throughout their campaigning, the candidates have focused more on other issues like taxes, immigration and crime.

“It’s been hard to get really substantive dialogue on affordable housing issues,” said Aaron Gornstein, executive director of the Citizens’ Housing and Planning Association.

CHAPA is pushing for more funding for affordable housing programs, which Gornstein said has been significantly reduced over the last decade even though acquisition and construction costs have skyrocketed. Today, the state spends $215 million on affordable housing programs, compared to $410 million in 1990, according to CHAPA.

“While housing has been talked about a lot more in the last four years than in the past 12 years, there haven’t been a lot of resources going to affordable housing programs,” said Thomas Callahan, executive director of the Massachusetts Affordable Housing Alliance. “It’s important to have the state leading the way in terms of putting money into new affordable housing production.”

MAHA, CHAPA and other affordable housing groups want the new governor to devote more to programs like the Affordable Housing Trust Fund, which has helped build 2,600 homes across the state, and the Massachusetts Rental Voucher Program, a rental assistance program for low-income tenants living in privately owned apartments.

They also want the next administration to increase the bond cap for the programs administered by the Department of Housing and Community Development. “To stay even or increase affordable housing production, we would need the increase in the bond cap for DHCD,” said Gornstein.

Both Healey and Patrick have expressed support for the housing trust fund, with Patrick promising to double funding to $40 million per year. In June, Patrick unveiled his housing-related agenda, which in addition to the trust fund included a proposal to develop incentives for businesses that offer employers help for down payments with first homes.

Besides supporting the trust fund, housing groups also are calling on the next governor to back the SoftSecond mortgage loan program, which has assisted 8,800 low-income homebuyers since it was started in 1991. All four candidates have expressed support for the SoftSecond program.

Healey has included expansion of the SoftSecond program as part of her 50-point plan and also has said she wants to partner with the banking community to establish low-fee, tax-free savings and investment accounts, similar to individual retirement accounts, for prospective first-time homebuyers to save money to use for a home down payment. In addition, she has proposed providing incentives to communities that change their zoning regulations to allow for accessory apartments on existing properties as a way to increase the housing supply.

While creating new housing for low- and moderate-income families is critical, housing advocates also want the state to preserve existing housing – particularly public housing units.

“One failure of the Romney administration has been its ideological opposition to using money for preservation purposes,” said Marc Draisen, executive director of the Metropolitan Area Planning Council, a regional planning agency.

However, efforts have been made under the Romney administration to speed up housing production. The state recently passed an expedited permitting law on housing development in smart-growth locations.

Draisen said the next administration will have to deal with the implementation of the expedited permitting law, and should make sure that development taking place under that law be located in smart-growth locations.

Some groups have called on state leaders to tie local aid to housing production as a mechanism for encouraging communities to accept growth.

Callahan said the current administration has tried to tie some forms of state aid to housing production through its smart-growth initiatives. The state, for example, has created the Transit Oriented Infrastructure and Housing Support Program, or TOD Bond Program, which provides financial assistance for pedestrian improvement and housing projects within a quarter-mile of transit stations.

The Romney administration also has provided millions in grants and loan-interest loans, so-called Commonwealth Capital funds, to communities to help build housing near public transit.

Despite some of those efforts, communities haven’t really gotten the message from the state that they have to do more to create housing for low- and moderate-income families in order to receive aid, according to Callahan. “It would take a more aggressive approach” to really get cities and towns to be more proactive in creating affordable housing, he said.

“I believe that the municipal finance will need to be part of the solution. It’s not the entire solution,” said Leff, of the homebuilders’ group. “We have to make communities feel like they’re not going to get crushed financially if they allow new housing.”

While the homebuilders’ group generally has been supportive of smart-growth efforts, Leff said, “We’re not looking for an ideological solution [to the state’s housing problems]. We believe that smart-growth projects play a role in the solution but housing around train stations is not going to solve the housing problem in this state.”

Currently, the state’s incentives to communities to embrace housing development are “fairly limited” and “fairly shallow,” according to MAPC’s Draisen.

“I have long felt that housing production should be a factor in the local aid formula,” said Draisen.

But in the end, Draisen said, “what ought to matter is the production and not the way in which a community produces housing.”