(BOSTON 8/7/2024) – The Massachusetts Legislature last week passed the Affordable Homes Act, the largest housing investment in Massachusetts history and a powerful first step in tackling the state’s housing affordability crisis.
The legislation authorizes $5.16 billion in bond authorizations and tax credits to spur housing production in Massachusetts, while implementing sweeping policy initiatives to facilitate the development of affordable housing and preserve public housing in Massachusetts.
“Everyone should be able to find a home that is safe, secure, and – most importantly – affordable. Unfortunately, housing has become unattainable for so many in the communities they’ve long called home,” said Senator Michael Moore (D-Millbury). “The passage of the Affordable Homes Act represents a step toward addressing the crushing housing crisis we face here in the Commonwealth. While we still have a lot more to do to produce more homes and get the prices of those homes under control, this bill signals that the Legislature is willing to take on the challenge. I look forward to continuing our work on Beacon Hill to find more solutions that will protect and expand opportunities to rent and own a home in communities across the Commonwealth.”
An amendment protecting the right of homebuyers put forward by Senator Michael Moore and adopted by the Senate was approved by the full Legislature. The provision directs the Executive Office of Housing and Livable Communities to implement a regulation that secures a buyer’s right to have an inspection done on a property before finalizing the purchase of a home. While this provision does not require a buyer to have a home inspection done, it bans the conditioning of a sale on waiving or limiting the buyer’s right to inspect the home.
“This is a great day for Massachusetts consumers, home buyers, buyers agents, and today’s home sellers who will be tomorrow’s home buyers. Allowing home buyers the right to have an independent inspection done of the home they’re about to purchase – something that was the industry standard for the past half-century – is now the law,” said Michael Atwell, former president of the American Society of Home Inspectors. “A huge thank you to the Massachusetts Legislature who appreciated the need for and urgency of this legislation.”
“I’d like to thank Governor Healey for her support of this amendment protecting homebuyers in the Commonwealth despite the efforts of interest groups like the Massachusetts Association of Realtors and the Greater Boston Real Estate Board, who opposed the change. Buying a home is one of the biggest purchases many families will ever make. Shouldn’t you have the right to know exactly what you’re purchasing before you sign a binding contract?” said Senator Moore. “Buyers must not feel obligated to waive inspections, risking their most important investment, in order to find their forever home. In a Commonwealth where we have long taken a strong approach to consumer protections, this is an obvious step to protect families from financial ruin due to costly undisclosed repairs. I am hopeful that these protections will be embraced by Realtors across the Commonwealth as a win for their clients and the overall health of the Massachusetts housing market.”
Other amendments secured by Senator Moore provide earmarks for sewer, septic, water, storm water management, roads, sidewalks, traffic controls, and public safety infrastructure upgrades that support housing development, preservation, or rehabilitation. $7 million was allocated for towns and cities in the Second Worcester District, including:
Auburn – $1 million
Grafton – $1 million
Millbury – $1 million
Shrewsbury – $1 million
Westborough – $1 million
Worcester – $2 million
To help municipalities convert commercial properties into multi-unit residential or mixed-use properties, the bill makes project sponsors eligible for a tax credit of up to 10 percent of the development costs upon completion of a project.
The bill includes a new tax credit to incentivize production of homeownership units targeting households with incomes of up to 120 per cent of the area median income (AMI). It also makes permanent the Community Investment Tax Credit (CITC) while expanding the statewide cap on donations from $12 million to $15 million. Further, it extends the sunset of the Historic Rehabilitation Tax Credit through December 31, 2030, while increasing the total available amount from $55 million to $110 million.
Among the many policy initiatives included in the bill to create more housing is a provision to permit one accessory dwelling unit (ADU) equal to or less than 900 square feet to be built by-right on a property in single-family zoning districts in all Massachusetts communities. The bill further provides consumer protections to help prevent homeowners from being pressured into waiving a home inspection, protects tenants who have a years-old eviction record from having that record held against them when securing new housing, gives seasonal communities new tools to tackle their unique housing challenges, and protects renters from having their unit redeveloped into a condominium.
Bond authorizations include:
Public housing
$2 billion to support the repair, rehabilitation, and modernization of over 43,000 public housing units across Massachusetts, with 25 per cent of the funds dedicated to preserve housing for those with incomes below 30 percent AMI.
$150 million to decarbonize the public housing stock and $15 million for accessibility upgrades.
$200 million to support Local Housing Authorities (LHAs) who partner with developers to add mixed-income developments on LHA land, leveraging funds to maintain and preserve public housing while increasing the overall housing supply.
Housing vulnerable populations
$200 million to support innovative and alternative forms of rental housing, including single person occupancy (SPO) units, transitional and permanent housing for people experiencing homelessness, housing for seniors and veterans, and transitional units for persons recovering from substance use disorder. 25 per cent of funds must be used to fund projects which preserve housing for those with incomes below 30 per cent AMI.
$70 million to support the development of appropriate community-based housing for Department of Mental Health (DMH) and Department of Developmental Services (DDS) clients
$60 million to modify homes of individuals or families with disabilities or seniors so that they may maintain residency or return home from institutional settings.
$55 million to support appropriate housing for people with disabilities who are not DMH or DDS clients.
Housing development
$800 million for the Affordable Housing Trust Fund which provides resources to create or preserve affordable housing for households earning less than 100 per cent of AMI.
$200 million to accelerate the development of mixed-income multifamily housing.
$100 million for the Middle Income Housing Fund which funds housing development for households earning less than 120 per cent of AMI.
$100 million for the Commonwealth Builder program for the construction of affordable single-family homes for households earning between 70 and 120 per cent of AMI, primarily in Gateway Cities.
HousingWorks
$425 million to support preservation, new construction, and rehabilitation projects through the Housing Stabilization Fund and the Community Investment and Preservation Fund.
$275 million to consolidate the existing Transit Oriented Housing Program and the Climate Resilient Housing Program and create a new, innovative program to accelerate and unlock new housing. 25 per cent of the funds must be used to fund projects which preserve housing for those with incomes below 60 per cent of AMI.
$175 million for municipal infrastructure projects to encourage denser housing development.
$50 million to provide payments to municipalities that receive a Housing Choice designation through high housing production and/or demonstration of best practices, including a grant program to assist MBTA Communities in complying with the multi-family zoning requirement in the MBTA Communities Law.
$50 million for grants to municipalities for planning and zoning initiatives that support housing production, workforce training and economic opportunities, childcare and early education initiatives and climate resiliency initiatives.
$20 million to provide incentive payments to municipalities who adopt smart growth housing districts.
Having passed both chambers, the bill now goes to the Governor for her consideration.
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