Gov. Healey's housing bond bill redraft excludes tax funding affordable housing

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Rendering | ICON Architecture of Boston courtesy of NewVue Communities A rendering of a planned affordable housing development in Athol, The Riverbend-Bigelow Schools Project

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By Chris Lisinski I State House News Source

House Democrats will seek a vote this week on a major housing bill that combines $6.2 billion in borrowing and tax credits with policy reforms designed to spur much-needed production, such as easier development of small, supplementary housing units on single-family lots.

The redraft of Gov. Maura Healey's $4.1 billion housing bond bill (H 4138) includes a provision allowing accessory dwelling units by right in single-family zoning districts, and it appears to omit Healey's proposal to create a local-option tax on high-price real estate transactions to fund affordable housing initiatives.

House Speaker Ron Mariano and his deputies have a few new ideas of their own. The bill the House Ways and Means Committee moved Monday also includes $1 billion for potentially expanding the Massachusetts Water Resources Authority's system to the Ipswich River Basin and to the South Shore.

Mariano's office said the water system expansion would "facilitate an increase in housing development outside the Greater Boston area."

Another part of the bill would launch a $150 million program to help cities and towns convert commercial properties into multi-family residential or mixed-use properties, plus offer tax credits to cover development costs.

House Democrats did not embrace Healey's proposal to allow municipalities to impose a new tax on pricey real estate sales, then steer the revenue toward affordable housing investments, an idea that drew pushback from some industry leaders.

Asked if she felt the bill would be watered down without the transfer tax, Healey replied, "I haven't seen [the redraft] and I'm just glad to know that it's out."

In a statement shared by Mariano's office, Housing Committee Co-chair Rep. James Arciero described the borrowing bill's bottom line as "the largest housing investment in state history."

The speaker previously told business leaders he planned to "go big" on the housing bond bill. The bottom line in the bill unveiled Monday is about 50 percent higher than Healey's and more than three times larger than the most recent $1.8 billion housing bond bill former Gov. Charlie Baker signed in 2018.

House Democrats want to steer $2 billion -- $500 million more than Healey proposed -- toward repair, rehabilitation and modernization of the state's roughly 43,000-unit public housing stock. Much of that system is in a state of disrepair.

The House will take up the bill Wednesday, more than seven months after Healey filed her housing bond bill. Housing challenges were at the forefront of public concern at the outset of the 2023-2024 session but lawmakers are only now about to embark on deliberations.

Lawmakers are under pressure to take action to generate tens of thousands more units of housing in Massachusetts as climbing prices threaten to push residents, especially young adults and lower-income families, to leave the state.

Healey's office estimated the combination of funding and reforms in her bill could generate more than 40,000 units of housing. It was not immediately clear Monday whether House Democrats have a similar projection for their own proposal.