The House/Senate conference committee appointed to resolve differences between the two branches with respect to the FY '06 operating budget, released its report early this morning. The committee agreed on $91.8 million for DHCD programs, an increase of approximately $12 million over FY '05.

Many of CHAPA's priorities can be found in the committee's report. The Massachusetts Rental Voucher Program (MRVP) received an increase of $2 million, and tenants will now pay not more than 40% of their income for rent. Additionally, the MRVP administrative fee has been increased from $25 to $32.50. The Residential Assistance for Families in Transition (RAFT) program was increased from $2 million to $5 million; however, the committee did remove the words "moving expenses" as a use for the funds. And, the Soft Second mortgage program was funded at $2.5 million, a very welcome addition because this program was eliminated from the budget a few years ago.

A few priorities did not survive the committee's review. Most of these items have separate legislation pending and will be considered during the regular legislative process. They include: the data collection language that the Senate had placed in DHCD's administrative line item, Section 13 from the Senate budget regarding funding for school costs for students who live in developments in smart growth zoning districts, and Section 86 of the Senate budget regarding the expedited disposition of state surplus land.

A chart showing DHCD programs and funding levels can be found here, and the committee's full report is available here.

Housing Bond Bill Moves Forward

Earlier this month, the Joint Committee on Bonding, Capital Expenditures, and State Assets amended and favorably reported the Housing Bond Bill. The bill would recapitalize the Affordable Housing Trust Fund and the Housing Stabilization Fund with $100 million each. The bill is now before the House Committee on Ways and Means, and Speaker DiMasi has indicated that the full House will consider the bill in the very near future. Once it becomes available, a copy of the most recent version of the bill will be posted on CHAPA's web site.

Hearing Held on New Public Housing Regulations

The Massachusetts Department of Housing and Community Development held a public hearing yesterday, June 22, and accepted testimony regarding new regulations for Public Housing Authorities. During the 2 1/2 hour hearing, not one person testified in opposition. CHAPA's testimony, prepared by board member, Charleen Regan, is available here. The proposed regulations and the hearing notice are available on DHCD's web site, www.mass.gov/dhcd. The department is accepting comments until the close of business on Friday, June 24.

Tax Loophole Bill Could Negatively Impact Affordable Housing Production

On June 15, the Massachusetts House passed House No. 4169. This bill seeks to "close tax loopholes" and increase revenues to the Commonwealth. An amendment pertaining to the deeds excise tax was adopted on the House floor. The expressed purpose of the amendment was to "prevent companies from using intermediaries to avoid the deeds excise when selling real estate." It appears that this amendment might inadvertently create a duplicative tax on the production of affordable housing.

Affordable housing development often involves a series of land transfers: the original acquisition, transfer to a partnership or other entity, the addition of a general partner or investors, etc. The initial reading of Sections 66 - 78 of H.4169 is that the deeds excise tax might be imposed on each of these transfers rather than merely upon the original acquisition.

CHAPA will work with the Senate to try and resolve this issue.