BOSTON — Senate Democrats have rolled out a $5.1 billion housing bill that calls for leveraging borrowing, policy changes, tax breaks and other incentives to help boost the development of new homes across the state.
The proposal, expected to be taken up Thursday, would add more than $1 billion in borrowing to Gov. Maura Healey’s $4.1 billion Affordable Homes Act plan filed in October, and includes a range of tax breaks, changes to state laws, and bond authorization to increase the construction of market rate and affordable homes.
But the plan doesn’t include Healey’s controversial plan to give communities the authority to add transfer fees from 2% to 5% onto property tax bills to fund affordable housing, which has been criticized by real estate brokers and others.
Senate President Karen Spilka said the proposal is part of a major effort to ease the state’s housing crunch by authorizing more than $5 billion in borrowing to help spur production and preserve and promote access to affordable homes.
“This important legislation continues the Senate’s commitment to creating a Commonwealth that is more competitive, affordable and equitable, with a focus on helping lower and middle income residents struggling with high housing costs,” Spilka, an Ashland Democrat, said in a joint statement with other top Senate leaders.
The proposal calls for diverting $800 million to the state’s Affordable Housing Trust Fund to create and preserve affordable housing for households whose incomes are not more than 110% of area median income.
At least $2 billion would be devoted to the rehabilitation of more than 43,000 public housing units, with 25% of the money dedicated to preserving housing for those with low incomes.
The plan also calls for expanding funding for the state’s Community Investment Tax Credit Program, which funds community development corporations that partner with nonprofits to build affordable housing across the state. Donations to community development corporations that qualify are eligible to receive a 50% refundable tax credit.
The Senate plan calls for making the program permanent and raising the cap on donations that qualify from $12 million to $15 million. Both Healey and the House included that provision in their housing bond bills.
Policy initiatives in the bill include a proposal to prevent cities and towns from banning or “unreasonably restricting” accessory dwelling units in single-family residential zones. It would also create a Fair Housing Office under the state Executive Office of Housing and Livable Communities to help “correct for decades of racially biased housing policies.” 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.
Earlier this month, the House of Representatives approved a $6.5 billion housing bill that included similar provisions and also scrapped Healey’s proposed transfer tax.
Any differences between the House and Senate versions of the legislation would have to be worked out in negotiations before the measure returns to Healey’s desk for consideration.
Christian M. Wade covers the Massachusetts Statehouse for North of Boston Media Group’s newspapers and websites. Email him at cwade@cnhinews.com.