BOSTON, Mass. (SHNS)–Supporters of a housing development tax incentive have plenty of ideas to improve how and where it’s applied, but as lawmakers from post-industrial cities prepare to try again to make the program permanent and triple its annual cap, a think tank consultant cautioned them to “speak with one voice.”
After both branches voted in favor of raising that cap in recent sessions — before dropping the provision from final versions of their bills — proponents are now faced with a looming Jan. 1 sunsetting provision that would drop the Housing Development Incentive Program’s $10 million cap down to $5 million, according to Andre Leroux, a consultant who works with MassINC.
HDIP incentivizes multi-unit, market-rate housing projects in qualifying cities through tax increment exemptions or tax credits.
After Gov. Maura Healey included a boost to HDIP — similar to ones proposed in prior sessions — in her tax relief package, the Mass. Law Reform Institute spotlighted a recent report critiquing the affordability levels of HDIP-assisted units.
“Even if we might have differences about how to approach the affordability piece, I think that it’s really important for the gateway cities to speak with one voice on this issue,” Leroux told lawmakers and staff at a State House meeting Wednesday.
Leroux warned that “it’s very easy to derail things” and that “if you’re sending mixed messages, saying, well, we could be doing this program better, then leadership may not get the message that this is really a critical project to do.”
Lt. Gov. Kimberley Driscoll, who also addressed the meeting of lawmakers and staff who represent cities, reiterated the Healey administration’s pitch to solidify the program and said they were open to “ways to improve” it.
“I know many of the early programs during HDIP maybe did not have as much affordable housing. Not every community has an inclusionary zoning set aside as part of that effort, and there are probably ways to improve it,” Driscoll said, adding that the last round of HDIP projects featured “a lot more affordable housing incorporated into those units, and if we can do more, that’s great.”
The key, the lieutenant governor said, is “flexibility” in the program to allow for different real estate markets and housing needs across cities in different regions like Salem, Holyoke, Pittsfield, and Fitchburg.
Sen. John Cronin, who represents Fitchburg and Leominster, called expansion of the program the “number one priority of gateway cities” and said boosting HDIP’s current cap from $10 million to $30 million would help cities get moving on “shovel-ready” projects that are currently unable to receive financing.
Driscoll also pointed to a project “backlog” and said “we could have projects that would be starting right now if we had additional HDIP tax credits to approve for the development community.”
The lieutenant governor said there was an added “sense of urgency” because of “an anticipated slowdown in calendar year ’24 tied to housing starts.” HDIP could “really help accelerate and keep that housing, not only building the much needed housing but putting people to work,” she said.
The focus was on the Senate at Wednesday’s caucus meeting. Leroux said he planned to lobby for including HDIP language in the Senate’s upcoming tax relief package — which still has an uncertain timeline — while Cronin said he filed an HDIP amendment to the Senate budget that hits the floor on May 23.
The program’s annual cap remains at the “pilot level” it started at 10 years ago, Leroux said. HDIP expansion has featured in House and Senate versions of economic development bills over the last couple sessions, but the lawmakers tasked with negotiating those measures ended up dropping the proposal during their private talks.
In 2022, both branches voted in support of boosting the HDIP annual cap. House Ways and Means Chairman Aaron Michlewitz called it a “major expansion” during a House session last July.
But after conference negotiations on that bill dragged on into the fall, the housing development program fell to the cutting room floor by the time House and Senate members agreed on a final bill in November.
“Members have already voted on this. It’s unfinished business from last session,” Cronin said.
Mayors of 24 mid-sized cities that would stand to benefit from the program — from Attleboro to Worcester, Methuen to Pittsfield — had written to top Democrats in late October urging them to retain that section of the bill and raise the program’s “extremely low” cap.
They pointed to “rising interest rates and spiraling construction costs” as generating an “even more intense need for HDIP credits.” The mayors also cited an estimate from MassINC that setting the HDIP cap at $30 million “could generate up to 12,000 housing units and over $4 billion in total investment over the next 10 years.”
Leroux said he’s working with mayors and city managers on a new letter they plan to send out by early next week.
Cronin told colleagues at the Gateway Cities Legislative Caucus that he was also preparing for a “vigorous” debate during this year’s Senate budget session about his proposal to move Massachusetts vocational schools to a lottery-style admissions process.
A coalition of education advocacy groups filed a federal civil rights complaint in February alleging exclusionary admissions practices at Bay State voc-tech schools.
“The story is simple. It’s when you rank-order students, you discriminate against students of color, English language learners, students with disabilities, and poor kids or economically disadvantaged students. We know the remedy exists,” Cronin said.
The Lunenburg Democrat said lottery admissions processes have already been instituted at Worcester Technical High School and Assabet Valley Regional Technical High School, and said both cases have “proven what we’re trying to propose.”
Cronin said he has filed a Senate budget amendment to mandate the lottery process for all vocational schools in the state, and said he expected the Gateway Caucus priority to come up for discussion on the floor.
He also filed a bill on the topic this session (S 257) which has garnered seven cosponsors, including Sen. Sal DiDomenico, the vice chair of the Joint Education Committee. His Gateway Caucus co-chair, Rep. Antonio Cabral, sponsored a similar bill (H 440).
“This is the first time that this issue will be debated on either the House or Senate floor. I expect a vigorous debate,” Cronin said.