Processing Your Payment

Please do not leave this page until complete. This can take a few moments.

June 6, 2016 Viewpoint

Massachusetts needs workforce housing

Timothy C. Sullivan

The link between economic growth and housing production in Massachusetts has never been clearer. For Massachusetts to continue its economic gains, we need to build more housing. Today, it's not just more apartments for lower-income residents that are needed. We need to build more for middle-income workers as well.

A growing number of middle-income households in Massachusetts are rent-burdened, paying more than 30 percent of their income for housing costs. The problem is most acute in the Boston area, where more than one third of middle-income households (households earning 80-120 percent of area median income, or AMI) are housing-cost burdened. The need exists statewide.

There are barriers to building apartments that are affordable to middle-income renters. It is expensive to build in Massachusetts due to the high cost of land, regulations, restrictive zoning, as well as labor and material costs. As a result, builders tend to build higher-cost units, because it costs them a lot to build. Or they might build subsidized units if subsidies are available. However, subsidies are almost always reserved for units that serve families with incomes up to 60 percent of AMI, about $52,500 for a family of four in Worcester. There are no subsidies to help create units for middle-income renters. Until now.

In May, the Baker Administration and MassHousing announced a new, $100-million program from MassHousing to provide financing with favorable terms to developers who build workforce housing units for people earning 61 percent to 120 percent of AMI.

This financing from MassHousing is in addition to money we lend to create and preserve low-income housing. Developments that receive these subsidies will need to have at least 20 percent of their units affordable to low-income renters. Additionally, this is not taxpayer money. MassHousing is self-sustaining and supports this program with its own resources.

MassHousing will subsidize workforce apartments with up to $100,000 per unit. Developers will need to meet eligibility criteria. Units will need to remain affordable through a deed restriction for at least 30 years.

MassHousing will pair this program, to the extent possible, with the Baker Administration's “Open for Business” program, which seeks to make some of the more than 20,000 state-owned parcels of land available for development. This program will create up to 1,000 new workforce units, in turn leveraging between 3,000 and 5,000 total new units for a variety of income levels.

There is growing awareness of the housing challenges facing middle income workers. The Urban Land Institute just released a new report “Building for the Middle: Housing Greater Boston's Workforce.” A recent Wall Street Journal headline read “Rising U.S. Rents Squeeze the Middle Class,” and a Boston Globe article quoted an academic researcher as saying “nobody has figured out how to build housing the middle class can afford.”

MassHousing is investing its own resources to confront one of the most pressing and challenging issues facing the commonwealth. In partnership with the Baker-Polito Administration, we are including middle-income residents as part of the housing agenda.

Timothy C. Sullivan is the executive director of MassHousing.

Sign up for Enews

WBJ Web Partners

0 Comments

Order a PDF