House Authorizes $1.7B for Affordable Housing

House Authorizes $1.7B for Affordable Housing

House Authorizes $1.7B for Affordable Housing

Authorizes bonds for programs crucial to affordable housing development across Massachusetts

Affordable housing continues to be at the center of our conversations here in Boston, Brookline, and across Massachusetts. We know and feel the impact of the housing crunch first hand. In many ways, we are victims of our own success – our thriving small businesses along Centre Street, our unique arts and culture scene, and beautiful parks have people flocking to our vibrant neighborhoods, but with these perks come higher costs and space limitations to present renters and owners.

The numbers back this feeling up. In 2017, Massachusetts had the 7th highest rents in the country, with Boston ranked as the 4th most costly urban area for housing. In greater Boston, nearly half of all renters are considered “cost burdened,” meaning they pay more than 30% of their income toward rent.

This is why the Massachusetts House of Representatives took concrete policy actions to address the affordable housing crisis by passing a bill that authorized $1.7 billion for state programs to construct and preserve affordable housing.

Successful housing finance is a patchwork of state programs, grants, and partnerships. Our bill ensures that the state is able to hold up its end of the deal. But beyond the numbers and spreadsheets, these programs help ensure people can have a place to call home.

See below for a summary of the legislation...

Background

  • Bond authorizations for certain housing programs are running low while projects continue to apply for funding.
  • Certain programs are forward funded, so they must be re-authorized so deals can move forward in a timely manner
  • Certain tax credits are set to sunset in 2019 and must be extended.
  • According to the US Census Bureau’s 2015 ACS Survey, MA had the 7th highest rents in the country, with Boston area ranked as the 4th most costly urban area for housing.
  • Currently, the Commonwealth’s housing supply is about 44,000 units short of demand.
    • MA population is forecast to rise 7% to 7.3 million by 2035.
  • According to the Joint Center for Housing Studies at Harvard University, nearly 50% of all renters in Massachusetts are rent-burdened, paying more than 30% of their income for rent.

State Budget Programs

  • MA Rental Voucher Program (MRVP): $92.7M provided vouchers for >8,000 families in FY18.
  • Emergency Assistance Family Shelter System (EA): $155M currently provides shelter for 3,592 families, continuing to be the only state in the nation that grants its citizens the right to shelter.
  • HomeBASE: $30M currently provides 3,150 families, who are eligible for EA shelter, a housing assistance benefit of $8,000 per 12 month period in FY18.

2013 Housing Bond Bill

  • Authorized $1.4B for these 11 programs (see below).
  • Has supported 240 projects creating 12,137 total housing units, of which 92% were affordable.
    • 8,779 in urban areas and 3,358 in non-urban areas.
    • 8,345 for families, 1,535 for elderly, and 1,703 for individuals with special needs.

The Bill

Bond Authorizations - $1.7B total authorization

  • Affordable Housing Trust Fund (AHTF) - $400M
    • Provides flexible funding to create and preserve affordable housing, ranging from transitional homes for homeless to homeownership programs.
  • Housing Stabilization/Investment Trust Fund (HSF) - $150M
    • Provides funding for acquiring, preserving, and rehabilitating affordable housing.
  • Capital Improvement and Preservation Trust Fund (CIPF) - $125M
    • Provides funding for the preservation and improvement of existing affordable rental developments (private, or state/federal public housing) at risk of losing affordability restrictions.
    • Allows properties to be eligible for CIPF loans even while receiving state/federal aid.
  • Housing Innovations Trust Fund (HIF) - $100M
    • Provides funding for innovative and alternative forms of rental housing.
  • Commercial Area Transit Node Housing Program (CATNHP) - $50M
    • Provides funding to encourage homeownership/rental housing in mixed-use commercial areas served by public transit.
  • Facilities Consolidation Fund (FCF) - Community-Based Housing for DMH - $65M
    • Provides funding for DHCD, DDS, and DMH to house individuals receiving services.
  • Community-Based Housing (CBH) - $55M
    • Provides funding for integrated housing for people with disabilities.
  • Public Housing Renovation - $600M
    • Provides funding to modernize and rehabilitate public housing (e.g. abatement of lead).
  • Public Housing Demonstration - $50M
    • Provides funding to allow for public housing authorities to leverage new funds and partners to rehabilitate public housing.
  • Home Modification Loan Program (HMLP) - $60M
    • Administered by Health and Human Services, provides loans/grants to assist homeowners or tenants with disabilities to make their residence more accessible.
  • Early Education and Out of School Time (EEOST) - $45M
    • Provides grants for non-profits for early education and out of school time program facilities that serve low income children.
    • Increases the percentage of slots in early education facilities for low-income children to be eligible for EEOST Capital Fund programs from 25% to 50%.

Tax Credits

  • Low Income Housing Tax Credit (LIHTC): Allows for tax credits to investors (corporate and individual) in qualified low income projects in affordable multifamily rental projects.
    • Extends $20M LIHTC allocation through 2025 (currently set to decrease to $10M in 2020).
    • Allows developers to take LIHTC while also receiving state assistance from CIPF.
  • Community Investment Tax Credit (CITC): 50% tax credit for individuals who donate to community development corporations.
    • Extends tax credit through 2025.
    • Removes cap on total amount taxpayers may claim (currently capped at $1M).
    • Changes limit on how much community partners can claim from $150K to 2.5% of total credits available in one year.
  • Brownfields Tax Credit: Allows for tax credits to permanently clean up contaminated sites.
    • Extends tax credit to 2024 (set to expire in 2019)
  • Housing Development Incentive Program (HDIP): Allows for tax credits (individual and corporate) for developers in Gateway Cities to construct or rehabilitate properties.
    • Extends the $10M tax credit until 2024 (set to expire in 2019).

Other Provisions

  • Allows MassHousing to provide financing services outside of MA, necessary for MA to remain competitive due to changes in HUD grants that require multistate contracts.
  • Provides DHCD the option to purchase certain housing units utilized for community-based DMH housing or for institutionalized individuals at appraised value, to preserve affordable housing, within 120 days of the authorization of affordable restrictions.

 

The bill now goes to the Senate.

jeffrey4

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