BOSTON — The state House of Representatives on Wednesday approved a $6.5 billion housing bill aimed at spurring the production of new homes, but dropped a controversial tax on real estate transactions to pay for housing development.
The proposal, which passed 145-13, calls for a mix of tax breaks, changes to state laws, and bond authorization to increase the construction of much-needed market rate and affordable homes throughout the state.
“The rents are high, the availability of stock is decreasing, there’s very few homes on the market,” House Speaker Ron Mariano, a Quincy Democrat, told reporters ahead of a final vote on the bill. “When you talk to folks and they say they don’t want to locate here because they can’t find homes for their staff or their employees, it’s a real problem.”
The House bill adds more than $2.4 billion to Gov. Maura Healey’s $4.1 billion Affordable Homes Act plan, filed in October, which also included a range of tax breaks, policy changes and borrowing.
It also didn’t include Healey’s controversial proposal to give communities the authority to add transfer fees from 2% to 5% onto property tax bills to pay for affordable housing projects.
The proposal faced significant opposition from real estate brokers and other critics who argued it would drive up the costs of housing.
The bill includes $1 billion to allow the Massachusetts Water Resources Authority’s water system to expand to the Ipswich River Basin, which includes Beverly, Danvers, Ipswich, Middleton, Peabody, Salem and other communities north of Boston.
Lawmakers argue that the spending will help expand access to water resources in the region to offset the impact from building new homes and housing complexes.
The proposal also includes a new $150 million program to help municipalities convert commercial properties for multiunit residential or mixed use. Developers would be eligible for a tax credit of up to 10% of the development costs.
The bill also includes a new tax credit to incentivize production of home ownership units targeting households with incomes of up to 120% of the area median income, according to House Democrats.
At least $2 billion would be devoted to the rehabilitation of more than 43,000 public housing units in the state, with 25% of the money dedicated to preserving housing for those with low incomes.
The plan also makes permanent the state’s Community Investment Tax Credit Program, which funds community development corporations that build affordable housing, and raises the cap on donations from $12 million to $15 million.
The policy initiatives in the bill include a proposal to authorize accessory dwelling units equal to or less than 900 square feet to be built by-right in single-family zoning districts in all communities.
House lawmakers slogged through more than 200 amendments to the bill and approved dozens of them in bundles that passed on voice votes. The changes added another $300 million in borrowing to the final version of the bill.
The legislation must be approved by the state Senate before it returns to Gov. Maura Healey’s desk for consideration.
Beacon Hill leaders are trying to incentivize more home building amid a shrinking inventory they say is edging first-time buyers out of the market.
The prolonged housing crunch is hurting the state’s economic growth, they say, making it much harder to attract new families and companies to invest in the state.
Massachusetts has some of the highest housing costs and rents in the country. The median price of a single-family home hit a record $560,000 in March, according to real estate industry reports. Meanwhile, single-family home sales were down 7.4% in March versus the same month last year.
Christian M. Wade covers the Massachusetts Statehouse for North of Boston Media Group’s newspapers and websites. Email him at [email protected].
By Christian M. Wade | Statehouse Reporter
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