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October 18, 2023

With housing bill, Healey says it's time to get after it

PHOTO | Courtesy of State House News Service Housing Secretary Ed Augustus pictured at a Sept. 12, 2023 Local Government Advisory Commission meeting.

Framing her new legislation as "historic" and "urgent," Gov. Maura Healey detailed her wide-ranging housing bill on Wednesday morning and speculated that its passage could provide a jolt for the 2024 construction season.

"We gotta get after it," Healey said at a press conference in Chelsea, saying that residents across the state are feeling the pressure of a squeezed housing market marked by low inventory and high costs.

"Today is about meeting the moment. It's about meeting the moment and the needs of residents across the state. We've heard you, we listened to you, and today we're taking action and in the days ahead we're going to need collective action and team work to get this done," the governor said.

Healey, who has marked her governorship so far with an emphasis on competing with other states, said the housing bill is necessary to keep residents from leaving Massachusetts.

The bond bill -- which the governor has dubbed "The Affordable Homes Act" -- would invest $4.12 billion into spurring production of new units, upgrading aging and neglected public housing, and converting state land into housing-ready plots. It also tackles policy changes, including offering a green light to communities who want to impose a tax on high-price real estate transactions to steer new revenue into affordable housing development.

Housing and Livable Communities Secretary Ed Augustus called the bill (HD 4634) "the most significant housing legislation filed in Massachusetts since 40B, 50 years ago." The Chapter 40B statute enables housing developers to circumvent local zoning regulations in communities that do not meet certain housing quotas, and is still controversial in many towns and cities today.

Though Healey did not attach a specific deadline for the legislation, lawmakers who will vet her plan are also under pressure to address housing affordability, and she reminded the audience that construction season in Massachusetts starts in the spring and that she hoped to make the most of new development opportunities.

"Spring's coming. Construction starts are coming or not, dependent on our ability to work together. So let's go. Let's get after it," the governor said.

Healey's proposal would allow governing boards in cities and towns to impose a new tax on higher-price real estate transactions, with the proceeds being used for affordable housing, and features an array of other tax code and policy changes designed to boost housing construction.

It got an early vote of confidence Wednesday from a big business group.

Associated Industries of Massachusetts, which has 3,400 member companies, declared its support for the bill only minutes after the legislation was announced.

"The development of reasonably priced housing across the commonwealth will ensure that the workers who represent the economic future of Massachusetts can live here, raise families here and become part of their communities," said AIM President Brooke Thomson. "Virtually every employer in Massachusetts has at one time heard a valued employee say: 'I love working for this company, but my family can't afford a house here.' AIM looks forward to working with the Healey-Driscoll Administration and the Legislature to ensure those conversations become a thing of the past."

The conservative Massachusetts Fiscal Alliance protested the borrowing called for in the bill, as well as the proposed tax on home sales and the addition of "more government bureaucracies."

"If Governor Healey wants to make housing more affordable, she needs to call on President Biden to lower interest rates, she needs to provide a way to lower property taxes, she needs to reverse the arbitrary green mandates which limit consumer choice and penalizes affordable energy options," said alliance spokesman Paul Craney. "The Governor is not dealing with the underlying issue of the cost of living and doing business in Massachusetts."

Greg Vasil, CEO of the Greater Boston Real Estate Board, said his group has "deep concerns about the inclusion of a sales tax on real estate" but otherwise applauded the administration's "bold action to address the state's crippling housing crisis" through more housing development.

As for the transfer tax, which supporters say would not be applied to most home sales, Vasil said, "It's an unstable source of revenue that would cause more harm than good at a time when people and businesses are leaving the state because it is just too expensive."

The GBREB says it has 13,000 members and they include realtors, commercial brokers, building and apartment owners and managers, and real estate finance professionals.

Only two weeks after Healey signed a tax reform package that was criticized from the left for offering "tax cuts for the rich," supporting the progressive-backed real estate transfer tax, which will only impact those with homes worth over $1 million, may be a way for the Democrat to appease the more liberal portion of her voter base.

Other policy changes include allowing accessory dwelling units (smaller buildings or apartments on the same property as a single-family home) by right in single-family zoning districts across the state. Administration officials said the permitting reform could lead to production of as many as 10,000 units in five years, when experts say the state needs an additional 200,000 housing units to meet current demand.

The Massachusetts Municipal Association wrote in their summary of the housing bond bill that the group opposed the ADU policy change.

"The MMA is opposed to this potential preemption of local zoning decision-making and will be raising these concerns as the bill makes its way through the legislative process," the MMA published. All but two of Massachusetts' cities and towns are members of the municipal association.

Healey's bill would also allow tenants to seal no-fault evictions from prospective landlords -- a win for housing advocates, including House Majority Leader Rep. Michael Moran and Housing Committee Co-Chair Sen. Lydia Edwards, who say the provision will help protect tenants of color who are more likely to be branded with "the scarlet letter E."

An eviction sealing bill has twice been approved by the Senate, and once by the full Legislature, but was vetoed by former Gov. Charlie Baker, making Healey's inclusion of the measure in her legislation a perhaps pivotal moment for the idea.

The governor and her team told those at the press conference that the housing bill was designed to create homeownership opportunities for moderate- and middle-income households, what she called a "comprehensive, equitable investment plan."

"Cost burdens are even higher when you think about folks who are in low-income households, and homeownership is completely out of reach for so many individuals, especially for Black and brown community members where homeownership rates are half of what they are for white families," Lt. Gov. Driscoll said.

Wednesday morning's event in Chelsea was the first of several stops that day where the governor promoted the new bill.

"We are fired up to be here today. Did you hear that passion?" Driscoll said. "We all know we have a big housing challenge, and we are no longer just going to admire this problem. We are going to tackle it."

Michael P. Norton contributed reporting.

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