The affordable housing crisis facing the commonwealth’s residents is pervasive and multi-dimensional. To address it in a comprehensive manner, we need to be persistent and prioritize the needs of our most vulnerable neighbors.
Massachusetts is the third-most expensive state in which to rent, as the fair market rent for a two-bedroom apartment of $2,165 requires an annual household income of more than $86,000 to afford. The median home price is more than $600,000.
The homeownership rate for households of color is half the rate for white households.
The Citizens Housing and Planning Association estimates that Massachusetts needs to create 200,000 additional homes, including 60,000 affordable homes, by 2030.
A soon-to-be-released report by the Green and Healthy Homes Initiative estimates there are more than 1 million housing units in Massachusetts with significantly deteriorated lead-based paint.
We need a three-pronged policy approach to this crisis.
An All-of-the-Above Strategy
First, Massachusetts needs to scale up a broad policy approach to meet its affordable housing needs. The state has an array of programs and a demonstrated commitment to supporting affordable housing. We need to do more – much more.
We need to ramp up the development of affordable rental housing, through increased state funding and enactment of the Tenant Opportunity to Purchase Act (H.1350 / S. 880) to provide tenants the opportunity to purchase their buildings when offered for sale. We need more funding to improve the condition of existing housing. MACDC has introduced the Massachusetts Healthy Homes Program which would allow homeowners and landlords to address substandard housing conditions, including lead paint.
We need to grow programs to address the racial homeownership gap, through down payment and mortgage assistance for first-time and first-generation homebuyers as well as through supply-side subsidies. These supply-side subsidies can be modeled on the successful Commonwealth Builder Program, but expanded to include all communities across the commonwealth. We also need to maintain funding to support homebuyer counseling and foreclosure prevention counseling, including an override of Gov. Maura Healey’s veto of funding provided by the state Division of Banks.
Second, Massachusetts needs new revenue sources dedicated to addressing the affordable housing crisis. This can be generated by enacting two pieces of legislation.
We need passage of state legislation to allow municipalities to adopt a transfer fee of up to 2 percent on high-end real estate sales. According to Jay Coburn, CEO of the Community Development Partnership, which serves the Lower and Outer Cape, this would provide a local tool allowing any community to determine the kind of housing relief they want and need.
We also need to pass state legislation to double the statewide deeds excise tax (which is currently less than half the rate as neighboring Vermont and New Hampshire) as proposed in the HERO (H.2894 / S.1799) legislation, which would raise essential funding for affordable housing and climate adaptation and resilience.
Expand Key Tax Credit
Third, Massachusetts should lean on community development corporations to play their already critical and unique role in addressing the affordable housing needs of the communities they serve. Passage of legislation to extend and expand the Community Investment Tax Credit (CITC) is the best way to ensure CDCs’ continued success.
CDCs are an efficient and effective delivery system for affordable housing, and many are triply-vetted by the state Executive Office of Housing and Livable Communities (EOHLC). First, each CDC undergoes a certification process, and must demonstrate that its constituency, including low-and moderate-income people, are meaningfully represented on its board of directors.
Second, to be eligible for an award of credits under the CITC program, a CDC must submit a community investment plan to EOHLC, describing in detail its plans to undertake community development programs, projects and activities to serve the needs of its constituency.
Third, to successfully compete for limited affordable housing subsidy resources, a CDC must demonstrate the quality of its proposal, site and development team. Last year, CDCs created and preserved over 1,400 homes across Massachusetts, many of these located in low-income communities and communities of color, and our collective impact generated more than $1.6 billion investment in these communities- with every dollar reinvested back into their communities.
CITC is approaching its 10-year anniversary of fueling resident-led community development that drives opportunity in communities across the commonwealth. Legislation to expand the CITC cap on annual donations from $12 million to $15 million, and to eliminate the program’s 2025 sunset, awaits action in the state legislature and needs to be enacted.
We can do this together. MACDC is poised to continue its strong partnerships with our member CDCs, state agencies, allied organizations and philanthropic partners. The three-pronged approach described here offers an ambitious yet practical roadmap to make significant inroads into addressing the commonwealth’s affordable housing crisis.
Emily Haber is president and CEO and Don Bianchi is housing director of the Massachusetts Association of Community Development Corporations.