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Economic Development Bill – A Step Forward for Housing Development

On January 6, the Massachusetts Legislature passed one of MAR’s top advocacy priorities, the Housing Choice bill as part of the economic development package, An Act enabling partnerships for growth.  Housing Choice policies will spur housing development by lowering the voting threshold for key zoning proposals that support housing production. 

Housing Choice

The economic development bill includes the language of the Housing Choices bill, for which MAR has advocated the last four years. We were joined in our support by a diverse coalition including representatives of the real estate community, affordable housing advocates, municipalities, business interests, and the planning community.

The legislation will enable cities and towns to adopt certain zoning best practices related to housing development by a simple majority vote, rather than the current two-thirds supermajority. This will make it easier for municipalities to rezone for denser, transit- or downtown-oriented, new housing development. Some examples include: 

  • Building mixed-use, multi-family, and starter homes.

  • Developing accessory dwelling units, or “in-law” apartments.

  • Decreasing parking ratio requirements.

  • Protecting natural resources areas that will not decrease housing development.

  • Modifying structure size and height, yard sizes, and setbacks to increase housing.

  • Constructing multifamily housing within one-half mile of mass transit stations or mixed-use developments in commercial centers.

The bill also includes a provision to discourage frivolous anti-development lawsuits. It gives the courts the ability to require the posting of up to $50,000 in surety or cash bond by those challenging special permit approvals. Those funds are used to cover costs if the court finds that the harms to the defendant and public interest from the delays caused by appeals outweigh their financial burden.

The bill contains several other important provisions in-line with our advocacy, including:

  • $5 million to fund broadband improvements – The bill includes $5 million to fund capital repairs and improvements to broadband infrastructure More broadband funding is also on its way from the federal government, which allocated $7 billion in the recently enacted COVID relief bill to expand broadband access. Roughly half of the federal funds will help low-income families afford broadband costs. The other half will be used for several purposes including replacement of broadband equipment and increasing rural deployment.

  • Creates MBTA Communities – The bill establishes so-called MBTA communities, requiring a minimum gross density of 15 units per acre and located with a half-mile of an MBTA transit station.

$60 Million for Affordable Housing – The bill includes $50 million for the creation of low- and moderate-income affordable housing near public transportation and $10 million to support the creation and preservation of climate resilient affordable multifamily housing.

Tourism District Surcharge

The economic development bill creates a new program called Tourism Destination Marketing Districts (TDMD). The program allows for the creation of TDMDs under which hotels and motels face a special assessment of up to two-percent to fund sales, marketing, and tourism promotion of the district. A prior draft of the TDMD program included short-term rentals as part of the special assessment. MAR successfully advocated for their removal, shielding short-term rentals from additional burdensome taxation.

No-fault eviction sealing

The economic development bill includes a provision permitting for the limited sealing of eviction records. It permits any person with an eviction court record that does not include allegations of nonpayment of rent or violation of any material term of the tenancy to petition the court to seal the record. Examples of no-fault evictions could include refusal to pay a rent increase or removal from housing because the property owner wants to use it for themselves or a family member.

Eviction sealing can be a double-edged sword. Record sealing generally raises concerns about limiting the public nature of public court proceedings and can prevent property owners from being able to conduct proper due-diligence when selecting renters, which can impact the health, safety, and quiet enjoyment of others. However, when done in a limited scope such as permitted by this bill, the concerns are outweighed by the positive impact it can have on housing security. Because eviction records are so commonly considered in housing screenings, individuals with eviction records, even no-fault records, can face significant hurdles in finding housing. This new measure should help remove this challenge and increase their ability to find stable housing.

Next Steps

The economic development bill is now before the Governor. He can sign it into law, veto the entire bill either by declaration or by taking no action (a “pocket veto), or veto specific provisions. We are urging him to veto a section creating a tenant option to purchase multifamily housing.

This option is unnecessary – tenants already have the ability to purchase property. What the option creates is a massive disruption to multifamily housing transactions whereby tenants can significantly slow down the process and create uncertainty for property owners and potential buyers. Even when used with good intentions, the option is damaging to a standard transaction and freedom to contract, and it is also ripe for abuse.

Creating hurdles for the buying or selling of multifamily properties harms more than just the buyer and seller. It also harms tenants and developers. It devalues multifamily property and disincentivizes its development, which is particularly damaging to Massachusetts where we desperately need more multifamily housing to fight a longstanding housing availability and affordability crisis. The crisis has only been magnified by the pandemic and creating a new harmful policy will exacerbate it further. If we slow development in this area, it is likely that rents will continue to rise.

For these reasons we will work with the Governor and his administration to remove this provision from the bill before its passage.

We also have more work to do on other items that were ultimately left out of the bill. Two we nearly got over the finish line were:

  • Additional resources to address pyrrhotite problems in central and western Massachusetts that are causing concrete foundations to crumble.

  • Extension of building permits impacted where construction as well as state and local processes were delayed or halted as a result of COVID-19.

We will continue advocating for these important initiatives in the new two-year legislative session that runs until July 31, 2022.

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