BOSTON — The state Senate has approved a $5.4 billion bond bill aimed at easing a housing shortage that officials say is driving people out of the state and hurting the economy.
The proposal, which passed unanimously late Thursday, includes a mix of tax breaks, changes to state laws and bond authorization to help spur the construction of market rate and affordable homes across the state.
But the plan doesn’t include Gov. Maura Healey’s controversial plan, included in her housing bill filed earlier this year, giving cities and towns the authority to add transfer fees from 2% to 5% to property tax bills to fund affordable housing, which was panned by real estate brokers and others.
Senate President Karen Spilka called approval of the measure “a first step in rectifying decades of under-investment that has led to our housing crisis.
“An affordable, equitable, and competitive commonwealth is one in which a renter can find an apartment within their budget, a family can afford a down payment on their first home, and residents aren’t priced out of communities where they want to live,” the Ashland Democrat said.
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 that funds community development corporations that partner with nonprofits to build affordable housing statewide. 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.”
The bill’s primary architect, state Sen. Lydia M. Edwards, D-Boston, chairwoman of the Senate Committee on Housing, said the measure “focuses on supporting the vanishing middle class, sealing eviction records, and providing protections for seniors and working-class individuals.
“This bill can’t fix everything or undo past injustices, but it can course correct and set us on the right path,” she said Thursday.
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.
Differences between the House and Senate versions of the legislation will need to be worked out in legislative 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.
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