JOSEPH KRIESBERG
Original funding utilized
The state Legislature has budgeted more for several housing-assistance programs – including one that helps low-income tenants pay rent – after overriding a series of Gov. Mitt Romney’s vetoes.
State lawmakers approved $5 million for the SoftSecond mortgage loan program, doubling the amount that was appropriated last year.
The program, which has assisted 8,800 low-income homebuyers since it was started in 1991, combines a conventional first mortgage with a second bank mortgage that is supported by a one-time state subsidy. It also offers borrowers loans with below-market interest rates and 3 percent down payments. Romney wanted to set aside only $3.5 million for the program.
In addition, the Legislature approved $27.5 million for the Massachusetts Rental Voucher Program, which provides rental assistance to tenants renting privately owned apartments. Funded at $26.2 million last year, money for the program has been slashed by millions of dollars over the last 15 years, according to housing advocates.
Lawmakers also reallocated $5 million for the Residential Assistance for Families in Transition, or RAFT, which is considered a key homelessness prevention program. RAFT provides up to $3,000 to low-income families to pay for moving costs, unpaid utility bills and back rent.
Advocates for the homeless last week also were cheering the inclusion of $600,000 for the Home and Healthy for Good initiative. The initiative, administered by the Massachusetts Housing and Shelter Alliance and its service-providing members, will pay for medical and support services for people with serious chronic health problems who had been living on the streets for long periods of time but now have housing.
The budget appropriations were over the objections of Romney, who wanted to slash $3.2 million from the rental voucher program and another $2 million from RAFT and completely eliminate money for Home and Healthy for Good.
The House and Senate boosted funding for public housing to $45.1 million for fiscal year 2007, about 30 percent more than the $34.8 million that was budgeted last year.
Despite the increase, the allocation is not keeping pace with the higher maintenance, utility and salary expenses with which local housing authorities are dealing, according to Aaron Gornstein, executive director of the Citizens Housing and Planning Association.
“The housing authorities have union contracts. They’re locked into certain salary increases, but their budgets have been level-funded or have declined in the last four years,” Gornstein said.
‘A Critical Resource’
In addition to spending more for public housing and programs like MRVP, legislators passed an economic stimulus bill that includes an extension of a program established in 1998 that has provided grants and loans to developers and communities to clean up and develop contaminated brownfields into affordable housing and mixed-use projects.
The economic stimulus package sets aside $30 million for the Brownfields Redevelopment Fund – which is an important resource for community-based development groups because many of the urban sites they have targeted for redevelopment into affordable housing and other uses have some “level of contamination,” according to Joseph Kriesberg, president of the Massachusetts Association of Community Development Corporations.
“That’s been a critical resource to get those properties back into productive use,” said Kriesberg. “The original funding was pretty much fully utilized. This allows the program to continue and hopefully expand.”
Also included in the economic stimulus package is up to $50 million annually for the next six years for a tax credit program that helps developers convert vacant mill buildings and other historic properties into housing and office and retail space.
Romney sought to slash the tax credit program expansion in June, arguing that the tax credits would not lead to more job creation or advancement in technology.
During the legislative session – which ends today – some action was taken on transfer tax proposals for the islands of Nantucket and Martha’s Vineyard, but by Banker & Tradesman’s press deadline the measures were essentially dead for the year. The House rejected a bill last week that had been endorsed by the House Ways and Means Committee that would have established affordable housing banks financed by a 1 percent tax on homes sold for more than $750,000.
Meanwhile, the Senate passed a version of the transfer tax bill last month that included both Martha’s Vineyard and Nantucket, with the sales tax applying to homes $2 million and higher on Nantucket.
The transfer tax proposals faced fierce opposition from the Massachusetts Association of Realtors, which argued that it is unfair to impose such a tax on only a segment of a community’s population and that transfer taxes ultimately drive up the cost of housing.
No action was taken on two other bills that were monitored by housing advocacy groups by Banker & Tradesman’s press deadline. The Metropolitan Area Planning Council – along with CHAPA and MACDC – was pushing legislators to pass a law that would speed up the process of selling state-owned land. Supporters say the law is needed to promote the production of more housing, manufacturing and commercial space and to protect pubic open space.
The House and Senate filed two versions of a bill designed to reform the land disposition process. Both bills would have given the right of first refusal to cities and towns to purchase surplus parcel for less than the appraised value and directed funding toward the Smart Growth Housing Trust Fund created by Chapter 40R.
But the House bill would have required legislative approval for the sale of any state-owned parcel, while the Senate bill called for special legislation approval for parcels larger than 25 acres.
MAPC – and a coalition of groups that included the Massachusetts Municipal Association and Massachusetts Smart Growth Alliance – opposed including a provision that would require legislative approval for all parcels, regardless of size.
Such a requirement would “unnecessarily slow down the disposition process,” said Benjamin Meshoulam, MAPC’s deputy legislative director.
In addition, a bill that would have given cities and towns the right of first refusal to purchase so-called expiring-use properties was stalled. Hundreds of such properties – which are federally financed affordable housing developments – are at risk of being converted to market-rate housing because owners can increase rents or sell properties once the mortgages are paid off, according to housing advocates.
