Economic Development Bill Moves to State Senate | Citizens' Housing And Planning Association

Post date

July 19, 2022

Eric Shupin

Director of Public Policy

On July 14, the Massachusetts House of Representatives passed its Economic Development Bill after two days of debate. The housing-related sections in the final House Economic Development Bill (H.5034) remained largely unchanged compared to the bill released earlier by the House Ways and Means Committee. However, the House did add language to update adaptability and accessibility standards for newly built multifamily housing.

Updated Adaptability Standards: The language would require any vacant residential building undergoing a gut rehabilitation or any non-residential (commercial) building undergoing a gut rehabilitation as part of a change in use into multifamily to have all units be adaptable, regardless of when the building was constructed.

Updated Accessibility Standards: The language would require any residential building when constructed to have 5% of units in buildings with 20+ units to be accessible.

Rules & Regulations: The language directs the Architectural Access Board to issue rules and regulations with design standards and procedures to implement the adaptability and accessibility standards through.

The bill now moves to the State Senate which will debate the legislation starting July 21.

On July 19, the Senate Ways and Means Committee released its Economic Development Bill proposal (S.3018). The Senate Ways and Means Bill contains similar housing provisions as the House bill. However, the Senate Ways and Means Bill proposed $400 million for affordable housing to be funding through American Rescue Plan Act Funds and the state budget surplus, which was not included in the House Bill. More information on that addition as well as a summary of all housing related sections in the bill are in the table below.

Comparison of Housing Related Sections in House and Senate Ways & Means Economic Development Bills

As the Senate prepares to debate its Economic Development Bill, CHAPA will be advocating for amendments to strengthen the bill for affordable housing, community development, and homelessness prevention.

Line Item	Topic	Description	Amount
Funded from ARPA & Budget Surplus
1599-6084	Affordable Housing Reserve	Reserve to be managed by MassHousing to support the following: $100 million for CommonWealth Builder Program to support production of affordable homeownership opportunities in socially disadvantaged communities $150 million for workforce housing to create housing for incomes from 60-120% of the Area Median Income (AMI) $150 million for the state’s Affordable Housing Trust Fund for creating housing with a particular focus on very low- and extremely low-income households	$400,000,000
Funded by Capital Spending
7002-8048	MassWorks	Capital authorization for infrastructure development program	$400,000,000
7002-8051	Redevelopment of Blighted Properties	Capital authorization for MassDevelopment program to improve, rehabilitate, or redevelop blighted, abandoned, vacant, or underutilized properties to eliminate blight, increase housing production, support economic development, and other activities	$50,000,000
7002-8052	Technical Assistance for Planning	Capital authorization for technical assistance grants for municipalities and regional applicants to support planning and local initiatives related to community development, housing production, and other activities	$5,000,000
7002-8054	Rural Community Grants	Capital authorization for rural and small towns with less than 7,000 residents to support economic development, job creation, and housing and climate resilience initiatives	$10,000,000
7004-0070	Community Based Housing	Capital authorization for the development of integrated housing for people with disabilities with priority for individuals who are in institutions or nursing facilities or at risk of institutionalization	$32,100,000
7004-0073	Housing Stabilization Fund	Capital authorization for the acquisition, preservation, and rehabilitation of affordable housing, including foreclosed and distressed properties	$73,100,000
7004-0075	Public Housing Redevelopment Demonstration Program	Capital authorization for demonstration program that allows public housing authorities to use innovative public housing finance tools to leverage new funds and partners to rehabilitate public housing and reduce ongoing capital costs	$19,300,000
7004-0076	Housing Innovations Fund	Capital authorization to support the production of innovative and alternative forms of rental housing, including single person occupancy units, transitional and permanent housing for the unhoused, shelters for survivors of domestic violence, supportive housing, and housing for substance abuse recovery	$29,500,000
7004-0079	Housing at Transit Nodes	Capital authorization for program that supports the creation of smart growth, affordable housing near public transportation	$11,700,000
7004-0081	Public Housing	Capital authorization to help rehabilitate our state public housing stock. It allows local housing authorities to plan for capital improvements, renovations, abatement of hazardous materials, or to remodel homes for persons with disabilities.	$95,200,000
7004-0084	Climate Resilient Housing	Capital authorization for program to support production and preservation of sustainable and climate resilient affordable multifamily housing	$1,000,000
7004-8026	40R Smart Growth Trust Fund	Capital authorization for the Chapter 40R smart growth trust fund	$6,900,000
Outside Sections (sections that do not involve funding appropriations)
Brownfields Redevelopment Fund Program Changes		Removes definition of “economically distressed areas” to allow grants to be made to projects not tied to the Massachusetts Oil and Hazardous Material Release Prevention and Response Act Adjusts definition of “priority projects” to allow eligibility for projects that will receive substantial funds from the municipality even if those financial funds have not yet been received by the project Increases maximum award from $500,000 to $750,000 for projects to conduct environmental cleanup Increases maximum award from $100,000 to $250,000 for projects to conduct environmental site assessments Allows the grant applicant’s required 20% contribution to the project to be not only cash support but also in-kind services or other non-cash contribution Expands list of entities eligible for grants to add non-profit entities in connection with a project that has demonstrable public benefit Adds a preference for awards to be made to projects within 1 mile of an environmental justice population
40R Changes		Removes starter home zoning districts from Chapter 40R
Starter Home Zoning Districts – Ch. 40Y		Creates Chapter 40Y for Starter Home Zoning Districts (“Districts”). Summary of changes to districts, as compared with 40R: Districts no longer need to be in eligible locations as defined by 40R. Districts can be anywhere in a municipality and do not need to be tied to a smart growth location Districts no longer needs to be at least 3 contiguous acres Districts will still be eligible for zoning incentive payments and $3,000 production bonus payments for each home built from the 40R Smart Growth Trust Fund DHCD may revoke approval of district and any incentive payment if no building permit is issued for any starter homes in the district within 5 years. This is an increase from the 3 year time period 40R currently allows Districts will not be eligible for 40S payments for any increased school costs Districts may be enacted by a simple majority vote At least 50% of starter homes in a district must contain 3+ bedrooms and districts may not impose any age or other occupancy restrictions For any proposed development of 12+ starter homes, at least 10% of starter homes must be affordable for households at or below 110% AMI. 40R currently requires that at least 20% of units be affordable to those at 100% AMI, with the option for municipalities to exempt projects with 12 or fewer units from these affordability requirements
Rental Deduction		Increases the rent deduction cap from $3,000 to $4,000
Brownfields Tax Credit Extension		Extends the Brownfields Tax Credit program through 2028
Senior Circuit Breaker Tax		Increases the maximum senior circuit breaker tax from $750 to $1,755. Those 65+ are allowed a credit equal to the amount by which the real estate tax payment exceeds 10% of the taxpayer's total income.
Housing Development Incentive Program (HDIP)		Raises the cap on HDIP from $10 million to $57 million for 1 year and then sets it at $30 million annually after that
Public Housing Reforms – Capital Funds		Adds definition of “capital funds” to the public housing statute, ch. 121B
Public Housing Reforms – Replacement Unit		Adds definition of “replacement unit” to ch. 121B to describe the former public housing units that will be the affordable housing units at the rehabilitated development.
Public Housing Reforms – Borrowing Against Capital Funds		Allows LHAs to borrow against their capital funds in order to leverage more resources for rehabilitation projects
Public Housing Reforms – Technical Amendment		Technical amendment to ch. 121B that clarifies that an LHA’s power to undertake the disposition of property includes a disposition by a means other than sale (e.g., long-term lease).
Public Housing Reforms		Revises the findings that DHCD must make to approve a sale or disposition of a public housing project to create greater opportunity for redevelopment of existing public housing, while adding a requirement for one-for-one replacement
Public Housing Reforms		Requires, as a condition of sale or disposition of an existing housing project, that the redevelopment partner enter into a binding land use restriction, requiring compliance with public housing restrictions with respect to replacement units in perpetuity, except in limited circumstances for projects utilizing federal low income housing tax credits.
Public Housing Reforms – Technical Amendment		Technical change to ch. 121B to address powers of a housing authority when it is not financially feasible to maintain units to a reasonable program standard for occupancy even if the units have not yet fallen below that standard.
Public Housing Reforms – Technical Amendment		Technical correction to make clear that section 26(p) applies to certain types of dispositions as well as demolition.
Public Housing Reforms – Vacancy Requirement		Changes the requirement that a unit must be determined to be vacant as of November 1, 2012, in order for a housing authority to seek DHCD approval to dispose of or demolish the unit to a requirement that the unit be vacant for a two year period before disposition or demolition.
Public Housing Reforms – Procuring Redevelopment Partners		Adds provisions permitting LHAs to procure developer partners for redevelopment projects through a competitive, qualifications-based procurement process that will allow the disposition of property to the selected developer without having to go through a separate land disposition process.
Public Housing Reforms		Exempts LHAs that do not own, lease, or manage any state-aided public housing units from DHCD oversight.
Public Housing Reforms – Retaining Proceeds		Allows LHAs to retain the proceeds of the sale of any housing authority land for the purpose of rehabilitating other LHA property
Public Housing Reforms – Filed Sub-bid Exemption		Exempts public housing redevelopment projects from ch. 149 filed sub-bid requirements but does not relieve such redevelopment from prevailing wage requirements