Baker-Polito Administration Releases FY2021 Capital Budget

On June 17, 2020, the Baker-Polito Administration released its FY2021 Capital Investment Plan, which includes resources for affordable housing and community development programs. In a letter accompanying the budget release, Governor Baker wrote that due to the ongoing COVID-19 pandemic and uncertainty related to the public health crisis, the FY2021 capital plan will focus on maintaining existing investments rather than pursuing new programs or funding sources.

Capital funding for affordable housing, largely distributed through the Department of Housing and Community Development (DHCD), produces and preserves housing for extremely low-, low-, and middle-income residents, including housing for seniors aging, persons with disabilities, and families and individuals experiencing homelessness. These resources support public housing authorities, affordable housing in smart growth locations, and first-time home buyers. For a description of these capital programs, please read pages 31-33 of the FY2021 Capital Investment Plan Report.

The total FY2021 total capital budget for affordable housing and community development programs is about $240 million. Comparatively, the total FY2020 capital budget for affordable housing and community development was over $275 million. Click here for a table showing the affordable housing and community development programs in the FY2021 Capital Budget. 

The difference in total funding amounts between this and last year's capital budget comes mostly from a loss of non-bond cap funding sources. For example, last year in FY2020, the Affordable Housing Trust Fund and the Housing Stabilization Fund both received $10 million from other funding sources. Neither of the programs have other funding sources listed in the FY2021 capital budget. However, DHCD still anticipates that these other funding sources, such as the National Housing Trust Fund, will remain available in FY2021. You can see the funding sources for the capital programs on pages 50-51 of the capital investment plan report.

The Massachusetts capital budget is supported mainly through borrowing. The Legislature authorizes borrowing for specific purposes through bond bills. For example, in 2018, the Legislature passed a $1.8 billion Housing Bond Bill to authorize capital spending for affordable housing and community development programs for five years. The Governor then sets a bond cap - the cap on the amount of bonds that the state can use each year - based on the authorization amount from the Legislature and the state's borrowing capacity. Each year, the Governor releases a capital investment plan taking into consideration the bond cap and authorizations. Other sources of funding can be included in the total capital investment plan. These other sources can include tax credits, federal funds, or other funds.