Senate passes bill authorizing $5.4B in housing production borrowing
Photo | Flickr | Ajay Suresh
The Massachusetts State House
Before voting very late Thursday night to pass a housing policy and borrowing bill that many said could turn the tides of the state's housing market, senators adopted an amendment that would prohibit most home purchase offers that are conditioned on the buyer waiving or limiting their right to a home inspection.
The Senate's bill (S 2834) would authorize $5.4 billion in borrowing to spur housing production, and all 40 senators voted in favor of its passage just before the calendar flipped to Friday.
Language directing the Executive Office of Housing and Livable Communities to promulgate regulations stating that no offer to purchase a home can be conditioned on the buyer waiving their right to an inspection was added via an amendment from Millbury Sen. Michael Moore, which was adopted unanimously. With housing so scarce and competition for properties so intense, many hopeful homebuyers surrender their ability to have property inspected for potential issues before it becomes too late in the process to back out of their offer.
The legislation is also loaded down with policy ideas, like allowing accessory dwelling units by right in single-family zoning across the state, allowing tenants to seal previous eviction records in certain cases, expanding the designation to address housing availability in "seasonal communities," and allowing a simple majority voting threshold for inclusionary zoning ordinances and bylaws at the local level.
"We know that we cannot solve the housing crisis with one bill, with one lump sum of money ... but we can course correct. And I would argue that this bill is the most comprehensive course correction in Massachusetts history when it comes to housing policy," Sen. Lydia Edwards, Senate chair of the Housing Committee, said as she introduced the bill Thursday morning.
Edwards projected the bill would prompt the creation of 40,000 housing units, a bite out of the 200,000-unit shortage Massachusetts faces. And while some senators touted the housing bill as historic in the scope of its bond authorization, the state is currently limited to about $400 million a year in capital spending on housing under its latest five-year capital budget.
Senate Minority Leader Bruce Tarr echoed some of Edwards' language in his opening remarks, saying the issue of housing policy is one with lots of bipartisan agreement because "we know that there has to be a paradigm shift in how we approach this."
"This bill represents a pivot: a pivot from the status quo of passing bond bills, and bonding money, and producing housing. This is a pivot toward trying to address some of the fundamental issues that we must face; and those issues are many, and they're complicated, and they're intense. They involve ensuring that we have land use policy that allows the production of affordable units, they involved in ensuring that we have the infrastructure, whether it be in drinking water, or wastewater treatment, or transportation, to be able to support those units," the Gloucester Republican said. "Because if we do one without the other, we will have failed to set the stage for the kind of production that we need."
"The Number One Issue"
Housing in Massachusetts is inaccessible or unaffordable for many residents and Gov. Maura Healey last year identified housing as "the number-one issue facing this state." Home sales across Massachusetts fell to a 12-year low in 2023. And while single-family home sales have been up each of the last two months, the increase in sales has not taken any pressure off the pricing side of the equation as a backlog of demand among house hunters keeps prices hovering at or near all-time highs.
Through May, there have been 14,005 single-family homes sold across all of Massachusetts in 2024, a 2.1 percent increase over the sales volume of the same five months of 2023, The Warren Group reported this month. Meanwhile though, the year-to-date median single-family home price has increased 9.3 percent to $590,000.
The next step for the governor's top priority bill is very likely a six-person conference committee that could be tasked as soon as Monday with reconciling the House and Senate approaches into a compromise bill that would still need additional votes to get to Healey's desk.
Housing joins a roster of heady topics already under negotiation between the House and Senate, including the annual and likely late state budget, gun law reforms, veteran's services and benefits, leveraging state savings interest to attract federal grants, and more. A climate/energy bill and a major economic development package are expected to be added to the list in the coming weeks.
For Healey, signing a significant housing bill could stand as the crowning achievement for a governor whose first term overlapped with one of the least productive starts of a legislative session in years. Unlike the tax relief package Healey signed last year, which took its form but did not pass under Gov. Charlie Baler, much of what lawmakers could send back to the governor originated with the bill she put into play.
Closely-Watched Amendments Fizzled
The Senate bill does not include language to authorize local-option real estate transfer taxes, which more than a dozen communities are seeking to tax high-dollar property sales within their borders and generate money for affordable housing. The House also did not adopt the policy, meaning it is likely dead for this session.
Four senators filed nine different proposals to revive the measure Thursday, but all were either withdrawn or rejected. The idea of local option transfer taxes seemed to have legs this session, especially after the governor included the proposal in her initial housing bill.
Tenant advocates were critical of the bill Thursday, saying both the House and Senate housing bills would take meaningful steps towards expanding affordable housing options but do nothing for people who are currently struggling to stay in their Massachusetts homes.
"But even if all the housing envisioned in the bond bill is ultimately built, it would still be a drop in the bucket compared to the scale of the housing crisis that is forcing working people out on the street today," Carolyn Chou, executive director of Homes for All Mass and a Dorchester renter, said. "Without immediate relief, tens of thousands of Massachusetts residents will be forced out of their homes by rising rents in the coming years, and we’ll continue to lose the working people who power our economy as they fall victim to predatory real estate speculators."
Chou's group said the Senate could improve the bill by adopting two amendments -- #150 from Sen. Patricia Jehlen to authorize cities and towns to enact just cause eviction protections and local rent stabilization policies capping rent increases at the rate of inflation but no more than 5 percent; and #214 from Sen. Adam Gomez to establish a statewide Foreclosure Prevention Program that would require servicers to participate in mediation with homeowners to explore alternatives to foreclosure. Gomez's amendment was redrafted to call for a pilot program and was adopted.
Jehlen withdrew her amendment, but she first argued that the Senate's bill needs "more tools to keep people in their homes, to save naturally affordable housing, to give homebuyers a fighting chance to compete."
"Right now, family shelters are overflowing and it's important to note that family shelters don't -- only half of the people in shelters are from out of this country, half of them -- a record number -- are people who've been displaced from within Massachusetts. Individual shelters right now turn away people every night. Right now, businesses and restaurants and health care providers can't find workers, partly because people can't afford to live near their jobs. Right now, the cost of housing is increasing many times faster than incomes," the Somerville Democrat said. She added, "Of course, we need more housing, more construction. But we also need ways right now to preserve existing affordable housing of all sizes, and we need more ways to keep people in their homes."
Sen. Liz Miranda of Boston also rose to support Jehlen's amendment, though it had already been withdrawn. The Roxbury Democrat said "the housing crisis in my district has never been as prevalent as it is today."
"Entire families and communities have been displaced, particularly Boston's Black community. We've worked to create new affordable housing in my district. We are doing so today successfully, but we cannot tackle the rapid pace of displacement without action that actually meets the gravity of this moment," she said. "The people in our community who have been displaced and priced out most are also the same people who actually built these communities, brick by brick. They are the backbone of our city and the backbone of our cities. And it's time that we return on that investment."
Not included in the Senate bill is the $1 billion bond authorization to expand the Massachusetts Water Resource Authority's service area including to the suburbs south of Boston, a priority for House Speaker Ronald Mariano. Sen. Jo Comerford, whose district includes some of the towns surrounding the Quabbin Reservoir which provides the water flowing east to the greater Boston area, said the Senate believed that there hadn't been enough conversation about the potential for MWRA expansion.
Sen. Patrick O'Connor of Weymouth -- the city where Mariano says the developer of the former South Weymouth Naval Air Station could build 6,000 homes if he just had access to MWRA water -- offered but then withdrew an amendment that would have added the MWRA expansion bond authorization to the Senate bill.
Amendments are commonly withdrawn when their sponsors lack the votes to push them through.
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