Attorney General Maura Healey (left) and former state legislator Geoff Diehl (right) are facing off in this fall's gubernatorial election. State House News Service photos

With the final match-up between Republican and Democratic gubernatorial candidates now clear, the stakes for the real estate industry in November’s general election are starting to come into focus.

But the race is scrambling some traditional ideological lines that the industry may have gotten used to.

For the last eight years, Republican Gov. Charlie Baker has been the state’s biggest cheerleader for housing production in the face of reluctance from Democratic supermajorities in the state legislature. It’s a mantle that Attorney General Maura Healey looks to seize as she tries to become the first Democrat in the State House’s corner office since 2014.

Meanwhile, Republican nominee Geoff Diehl has made decrying a much-heralded reform aimed at building more housing a core element of his campaign.

Republican primary voters opted for Trump-backed candidate and former state legislator Diehl as their choice for governor of Massachusetts on Tuesday, kicking off a nine-week uphill battle against the Democratic ticket of Healey and Salem Mayor Kim Driscoll, the latter of whom emerged Tuesday from a three-way primary to be the party’s lieutenant governor nominee.

Healey, a Boston Democrat who has been the state’s attorney general of the last eight years, cleared the gubernatorial field after she entered the race in January and has been able to largely waltz to the doorway of the governor’s suite since Sen. Sonia Chang-Díaz ended her Democratic primary campaign in June.

The corner office is up for grabs by virtue of Baker’s and Lt. Gov Karyn Polito’s joint decision announced last December to not seek a third term for their popular Republican administration. Polito’s decision not to seek the governor’s office herself left no heir apparent to assume Baker’s mantle on the Republican side.

Diehl Would Scrap MBTA Communities Law

The Associated Press called the GOP primary for Diehl at 10 p.m. when he had about 56 percent of the votes counted to 44 percent for Wrentham businessman Chris Doughty, whose campaign focused on affordability issues and mostly eschewed federal political issues. Diehl said Tuesday night that his campaign will be the first to focus “specifically on we the people – our freedoms, our rights and our prosperity.”

“Maura Healey as governor would lead our state in the wrong direction, down a path of higher taxes and radical legislation. We don’t want that, right? Under her leadership, Massachusetts would be more expensive, more excessive and more restrictive,” he said. “So when it comes to your rights, your freedoms, your wallet, your businesses, your kids’ education, I declare Maura Healey to be the people’s worst nightmare and I’m here to stop her from ever bringing her radical policies to the governor’s office.”

Diehl’s “Blueprint for the Bay State” pledges to enact the tax reform proposals made by Baker, suspend the state gas tax whenever the pump price is above $3 per gallon, create a statewide “jobs boss” who would focus on attracting new companies to Massachusetts and growing existing companies, increase mental health care capacity, repeal the state’s new transit-oriented zoning regulations, increase the presence of police officers in schools, and create a new state agency to monitor schools for the promotion of a political agenda. He also has vowed to rehire state workers who were fired for refusing to comply with the state’s COVID-19 vaccination mandate.

In a column published in Banker & Tradesman last month, Diehl reiterated his opposition to the MBTA Communities zoning reforms.

Streamlined permitting is often cited as a major need in order to jump-start the creation of more housing. I support efficiency and streamlined service for permitting and other government functions. But I also favor local control over the process,” he wrote.

GOP Running Mate Knocks TOPA

Diehl hasn’t specifically spoken out on issues important to real estate lobby groups like transfer taxes, rent control or tenants’ right of first refusal legislation – also called TOPA – that failed in the legislature this year, but made it through in 2021 only to be met with a veto from Gov. Charlie Baker.

His running mate for lieutenant governor, nurse and former state legislator Leah Cole Allen, spoke in general terms at a virtual candidate forum held by the Greater Boston Real Estate Board last week about how legalizing accessory dwelling units statewide might fit in with the campaign’s opposition to “excessive regulations.” She also articulated opposition to low-carbon construction requirements, which she called “greenlining,” real estate transfer taxes and TOPA legislation, although she said she had only passing familiarity with the latter concept.

However, Allen also endorsed the idea of rent stabilization legislation, which she distinguished from rent control. She described rent control a bad solution to the state’s housing problems and said increasing housing production would let the market “correct itself.”

“Rent stabilization is something that maybe we could explore if we exclude smaller landlords and new construction so we’re not hampering development that will increase housing,” she said.

Healey Promises ‘Zoning Barrier’ Pushback

Once Healey’s place as the Democratic nominee for governor was cemented Tuesday night, she told supporters at a Dorchester union hall wedged between the Red Line and the Southeast Expressway that she’ll cut taxes, and fix roads, bridges and the MBTA. She also touted her bipartisan working relationship with Baker, whom she said “has led with respect and worked with both parties,” and cast herself as a politician in his mold.

“Unfortunately, Geoff Diehl and Chris Doughty will put us on a different path. They’ll bring Trumpism to Massachusetts, and they both already said they’ll support Donald Trump in 2024. I don’t know about you, but I am tired of the anger, the vitriol, the division. That’s not who we are. That’s not what Massachusetts is all about,” Healey said before her Republican opponent became clear. “I want a different path. My path is one of optimism; working together with urgency and intention to get things done.”

Healey has said that her gubernatorial administration would tackle “local zoning barriers” to build more housing. It’s a key area many industry leaders, housing advocates and academics have blamed for the shortage of apartments for rent and homes for sale statewide that’s sent prices for both skyward, with Boston’s suburbs coming in for the harshest criticism.

However, she has also said she would support local-option rent control or rent stabilization, like those Boston Mayor Michelle Wu has said she’ll bring before the legislature in 2023, but would not push for any statewide policies.

Driscoll, Healey Back Local Rent Control

With Healey having endured little opposition until now, the lieutenant governor’s race became a forum this summer to try and divine some of the Democratic gubernatorial ticket’s policy priorities on hot-button issues affecting the real estate industry.

Driscoll, the mayor of Salem since 2006, got into the lieutenant governor’s race in January promising a “new focus from Beacon Hill” on the needs of cities of towns. She bested two members of the legislature in the primary, defeating both Sen. Eric Lesser of Longmeadow and Rep. Tami Gouveia of Acton. As Salem’s mayor, Driscoll won plaudits from the real estate industry for her relentless focus on increasing housing production in her city, in the face of stiff opposition from some politicians and residents’ groups.

During the GBREB forum last week, Driscoll echoed Healey’s position when she told moderator Lynn Bora, executive vice president at Winn Residential, that she sees rent control measures as having “drawbacks” when trying to incentivize housing production, but that she saw a need to promote “local autonomy” in solving the housing crisis.

“I don’t think [rent control or stabilization] is the answer, for sure, but I wouldn’t want to hold back a local community that thinks it‘s a necessary part of the toolbox” to address housing costs, she said, citing her own experience as a municipal leader.

Driscoll also expressed concerns about TOPA laws which, she said, can be “onerous” for homeowners and small landlords.

One of the things that worries me about TOPA is it’s so reactive,” she said. “[In Salem,] we’re reaching out proactively to buy right of first refusal, then working with our housing nonprofits to assemble funding.”

When GBREB CEO Greg Vasil asked Driscoll about her support for increased transfer taxes, an idea that’s emerged on Beacon Hill as one way to fund affordable housing, Driscoll was similarly noncommittal.

“You’re always worried about adding additional fees and costs. Myself, as a mayor, I like having the autonomy over the tools I have at my disposal,” she said. “Maybe it’s for building affordable housing, maybe it’s leaning in on the issues we’re just talking about [like housing affordability]. I wouldn’t want to take that away.”

What Do Diehl, Healey Wins Mean for Real Estate?

by Banker & Tradesman time to read: 6 min