Senate Affordable Homes Act sets course for thousands of new units, sweeping renovations of public and affordable housing, and protections for residents
(Boston – 6/28/2024) Yesterday, the Massachusetts State Senate unanimously passed S.2834, An Act relative to affordable homes—also known as the Affordable Homes Act to address the state’s housing crisis. During debate an amendment offered by Senator John C. Velis (D-Westfield) was adopted to ensure that housing development projects throughout Western Massachusetts will be eligible for the Homeownership Tax Credit program, a critical new initiative in the bill designed to produce homes affordable to first-time homebuyers.
Through Senator Velis’s amendment, the Homeownership Tax Credit program will be able to consider small developments with less than 10 units if approved by the Secretary of the Executive Office of Housing and Livable Communities .The flexibility provided by this amendment will expand the eligibility for the program to small and rural communities in Western Massachusetts who commonly consider constructing housing developments with less than 10 units. The Senate’s legislation also ensures these smaller projects are eligible for the Commonwealth Builder Program, which supports construction of affordable homeownership opportunities in Gateway Cities.
“Providing the opportunity for small developments to be considered is vital for our small and rural communities here in Western Massachusetts who desperately need affordable homeownership opportunities and who don’t always see the larger housing developments that we see around Boston. I am proud of the bold and comprehensive steps taken by the Senate to support the construction of all forms of housing in every part of our state,” shared Senator John C. Velis, who is the sole Western Massachusetts Senator on the Joint Committee on Housing. “I am grateful for the leadership of Chair Edwards and Chair Rodrigues who together crafted these innovative solutions to meaningfully begin to tackle our Commonwealth’s housing crisis.”
The legislation makes important investments in public housing; housing affordability; initiatives for first-time homebuyers; essential infrastructure; geographic equity; and incentivizing local best practices. Additionally, the bill includes policy proposals to further housing equity for both homeowners and renters. The bill contains $5.4 billion in bond authorizations, including:
Creating and Repairing Public Housing
The Senate Affordable Homes Act provides $2.2 billion for repairs, rehabilitation, and renovation across the 43,000 units of state-aided public housing. This significant investment ensures that the state’s public housing infrastructure remains safe, modern, and sustainable, so it can continue providing quality living conditions for thousands of families.
Spurring Affordable Housing Units
A further $425 million will go to the Housing Stabilization and Investment Trust fund, working with municipalities, non-profits, and developers to support housing preservation, new construction, and rehabilitation projects for affordable rental units. This will help the longevity and sustainability of affordable housing stock, addressing both immediate needs and long-term housing solutions.
It additionally adds $800 million into the Affordable Housing Trust Fund to create and preserve housing for households with an income at or below 110 per cent of area median income, helping to bridge the gap between the high cost of housing and what many families can afford.
Supporting First-Time Homebuyers in Gateway Cities
The Senate Affordable Homes Act authorizes $200 million for the CommonWealth Builder program to further the production of housing in gateway cities for first-time homebuyers. This initiative supports economic development in these cities, helping families achieve homeownership and contributing to the revitalization of urban areas.
The legislation also includes $50 million for MassDreams, a program that provides down payment and closing cost grants to first-time homebuyers who meet the program’s eligibility criteria and who currently live in one of the 29 communities that were disproportionately impacted by the COVID-19 pandemic.
Maintaining Essential Infrastructure
The bill provides $375 million for HousingWorks, a program that awards grants to municipalities and other public entities for a variety of infrastructure-related support. Improving essential infrastructure supports the health and safety of residents and the feasibility of new housing projects.
Of this amount, $100 million will be dedicated to addressing water, sewer, and septic challenges tied to housing developments, and $100 million will help incentivize best practices in communities that have adopted the Community Preservation Act (CPA) and are spending a high percentage of those funds on housing, as well as MBTA communities that are going beyond the minimum requirements set forth in the MBTA zoning law passed in 2021. Communities that have been proactive in creating transit-oriented development, which reduces traffic congestion and promotes sustainable urban growth, will be eligible.
Addressing Regional Equity
The legislation includes $150 million in dedicated funds to address the unique housing needs of rural towns, seasonal communities, and mid-sized communities. This ensures that all areas of the state, regardless of size or location, have the resources to meet their specific housing challenges.
The Senate’s Affordable Homes Act also contains multiple policy proposals to go hand in hand with the new authorizations.
Protecting Tenants from Broker Fees
By requiring that real estate brokers’ fees be paid solely by the party that contracted with them, this legislation ensures that buyers are not burdened with unexpected and extraordinary costs. It also promotes transparency and fairness in real estate transactions.
Establishing Equity-Focused Housing Offices
The Office of Fair Housing and the Office of Livable Communities and Community Services will be established under the Executive Office of Housing and Livable Communities. These offices will set the Commonwealth on a path to address many decades of housing discrimination by prioritizing equity issues in housing across the Commonwealth, ensuring equal access to housing opportunities for all residents, and offering technical assistance to cities and towns that can sometimes lack dedicated housing staff.
Accessory Dwelling Units (ADUs)
The legislation prohibits the banning or unreasonable restriction of ADUs in single-family residential zones, promoting flexible housing options. This policy enables homeowners to create additional living spaces, increases housing supply and provides more affordable rental options within established neighborhoods.
Homeownership Tax Credit
This new tax credit will be available for the production of homeownership units for households that make up to 120 per cent of the area median income, incentivizing housing production and promoting homeownership opportunities.
Separate versions having passed the Senate and the House of Representatives, the two branches will now reconcile the differences.
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