BARRY BLUESTONE
‘Precisely’ what’s needed
A proposal to build starter homes for young families in Massachusetts is sparking controversy even before it leaves the starting gate.
Business and civic leaders have unveiled a draft of a plan that would funnel state payments and more school aid to communities that zone for smaller-sized homes that are sold to moderate-income families.
Supporters say more such homes need to be built to retain and attract young professionals who are leaving Massachusetts for states that have cheaper housing, as well as job opportunities. They maintain that new, affordable starter homes are critical for the state’s economy.
“What we’re not producing is precisely the type of housing we need for economic development in this state,” said Barry Bluestone, a founder of the Commonwealth Housing Task Force, which is pitching the plan.
But critics argue the proposal could cost the state millions of dollars and divert state resources from existing programs that help needier families in Massachusetts.
“Since resources are not unlimited and the state faces serious challenges, should the state be spending resources on housing [that is] particularly geared at people [earning] over $100,000 when the needs are so much greater among those of lower income?” asked Michael D. Stone, professor of community planning and policy for the University of Massachusetts at Boston.
Under the proposal, communities would receive $5,000 for each starter-home permit they issue. The homes, which would have at least three bedrooms and be 1,700 square feet or smaller, would be priced between $300,000 and $350,000. They would be targeted toward those earning up to 150 percent of the area median, which translates into over $120,000 in Greater Boston.
Stone, who called the plan “ill-conceived” and “irresponsible,” said there are hundreds of thousands of existing homes in the state that qualify as starter homes.
“I have had serious problems with the almost single-minded focus of the Commonwealth Housing Task Force and the previous state administration on production of new housing to the exclusion of existing housing. New housing is always a small fraction of the entire housing stock. It’s never a large share of the housing that’s available,” he said.
The plan calls for zoning that would allow six single-family homes per acre and eight duplexes or 10 townhouses per acre. In developments where half the homes are sold to people earning up to 150 percent of the area median income, there’s no restriction on the price of the remaining units.
In developments where less than half of the homes are affordable to moderate-income households, a quarter of the units would have to be sold to people earning up to 130 percent of the area median income. Those homes would include a restriction limiting how much a homeowner could sell the home for within 10 years after purchasing it.
Communities that zone for such housing would receive state money annually covering all the costs of educating each child who resides in a starter home development.
Proponents project the initiative could create up to 11,000 units in a decade.
Builders and housing advocates say current zoning doesn’t allow for smaller, starter housing to be built. They say communities resist new family housing because of the costs of educating children and providing other services.
‘The Most Effective Way’
Supporters emphasize that the initiative is not intended to serve lower-income families or to compete with other affordable housing programs.
“Remember, this is a narrowly targeted program. It is specifically aimed at creating product for primarily, but not exclusively, young families who are leaving the state. And the young families who are leaving the state tend to be in that income range because they’re leaving to buy homes in other states,” said Eleanor White, an affordable housing consultant and co-chairwoman of the task force. “These are not low-income families leaving the state to buy homes in other states.”
Since 2004, the state has lost between 50,000 and 62,000 residents annually and the largest losses have been among people 20 to 34 years old, according to a report co-written by Bluestone that was released last week.
Bluestone, who is the director of Northeastern University’s Center of Urban and Regional Policy, said the proposed housing is not for the “super-rich” or “well-to-do.”
“The starter-home proposal is not aimed at the lowest-income people of the state. It was never intended [as such]. But it is aimed at trying to keep the state economically viable so people of all incomes can survive here and have jobs here,” he said. “And the kind of cost we’re talking about is modest enough that if in fact it does help us generate a more prosperous economy, this is one of those programs where a rising tide does lift all ships.”
Some housing advocates questioned whether enough analysis was done to pinpoint how many smaller starter-type homes already exist in Massachusetts.
Tina Brooks, the state’s senior housing official, said there are hundreds of such homes in mid-sized cities throughout the state that are underutilized.
The state is working at trying to create incentives for lower- and moderate-income people to invest in that housing, Brooks noted. “We absolutely need that smaller-scale product and ability to develop densely,” she said.
The task force didn’t calculate how many starter homes exist, according to Bluestone. “I’m not even sure how to calculate that,” he said.
The report co-written by Bluestone hints there could be a significant number of homes available as baby boomers age and seek to downsize. However, there’s no data on the size and cost of the homes and how many of them will be available.
The starter-home initiative comes four years after the task force presented a plan for smart-growth development. The task force’s ideas led to the 2004 passage of Chapter 40R, a law that provides state money to communities that zone for dense mixed-income housing near public transit and in town centers.
A year later, a companion law known as Chapter S was passed. Chapter 40S helps communities pay for extra educational costs stemming from new development in smart-growth districts.
Future funding for 40R is uncertain. A Smart Growth Housing Trust Fund was initially set up to pay for 40R.
Money in the fund was supposed to come from the sale of state-owned surplus property. But a law allowing for the quicker sale of such property expired, jeopardizing the flow of money into the fund. Currently, no money is available.
White said a line item in Gov. Deval Patrick’s supplemental budget includes $15 million for the trust fund. In addition, the state owns a parcel in Boston that could fetch up to $11 million. According to White, legislators have said that money is sufficient to fund 40R for at least another year.
The Legislature also is considering a bill that would funnel income taxes from residents living in smart-growth districts into the fund.
“This is not an insignificant issue,” acknowledged White.
Supporters of the starter-home initiative have discussed dipping into the Smart Growth Housing Trust Fund to pay for the program.
Some observers wonder why the task force is introducing another proposal when 40R funding has been a problem.
“Until we resolve that issue and get a permanent and predictable revenue stream for 40R, it probably doesn’t make much sense to provide a new incentive program like this,” said Andre LeRoux, executive director of the Massachusetts Smart Growth Alliance.
LeRoux said the alliance would have preferred “to see efforts go into solving the problems with Chapter 40R before starting a new proposal like this.”
Smart-growth advocates like LeRoux also fear that the starter-home program could create sprawl. The initiative encourages communities to locate starter homes in smart-growth locations where infrastructure and services exist.
“The proponents of the proposal have tried to respond to some of the concerns we’ve expressed, but we’d like to see the smart-growth locational criteria strengthened, not just encouraged,” said LeRoux.
Joseph Kriesberg, president of the Massachusetts Association of Community Development Corporations, said the starter-home initiative will “be extremely expensive.”
If 11,000 units are produced, the state would have to pay up to $55 million, and hundreds of millions of dollars in school assistance, he said.
And since it’s unclear where these homes would be located, some suburban communities could get extra school-aid assistance at the expense lower-income communities, he noted.
“I think we need a lot of different housing types, but to tilt the scale so dramatically to one type of housing doesn’t seem appropriate at this time,” he said.
Homebuilders and Realtors, who provided input to the task force on the initiative, pushed for a starter-home proposal that would have forced cities and towns to participate. They say the financial incentives aren’t enough to get communities to zone for family housing.
“It is our position, and has been, that a purely voluntary approach will not work,” said Benjamin Fierro, counsel for the Home Builders Association of Massachusetts. “It is our belief that we need a mix of incentives or disincentives.”
Builders wanted to include a provision that would have reduced local aid to communities that didn’t produce starter homes.
But White said legislators told task force members that they would not support a mandatory program.
“The Commonwealth Housing Task Force staff decided to recommend a completely voluntary program because we believe that that’s the most effective way to generate community collaboration and support and because we believe that that’s most likely to gain passage in the Legislature,” she said.
