House lawmakers voted Thursday to boost the annual cap of a housing production program that supporters have hailed as one of the best ways to create market-rate units in Gateway Cities, matching a proposal from their Senate counterparts that was floated earlier this year.
But House Democrats decided to expand the program in a different legislative vehicle than the Senate, using a roughly $700 million spending package released Wednesday to increase the annual cap for the Housing Development Incentive Program’s instead of a tax relief bill locked up in negotiations.
The program provides two tax incentives to developers who decide to undertake new construction or “substantial rehabilitation” of properties for sale or lease as multi-family, market-rate residential housing, according to the state.
The program has already been used to create more than 2,600 units at an average cost of just over $23,000 per unit, and by boosting the annual cap from $10 million to $30 million, an additional 12,500 units could be created over the next 10 years, said Rep. Carole Fiola, a Fall River Democrat.
“Massachusetts cannot continue to thrive if we are losing these individuals to lack of housing and housing costs,” Fiola said. “HDIP is a tool we can use to expand this housing supply. The continuation and expansion of the HDIP program helps the commonwealth’s staggering rental costs and housing supply problem in a cost-efficient fashion.”
Previous expansions to the Housing Incentive Development Program have passed in both chambers but have not reached the governor’s desk. In this version, the House, like the Senate, proposes raising the annual cap to $57 million in fiscal year 2024 and then bringing it down to $30 million moving forward.
Not everyone was on board with the expansion.
Market-rate housing may not be attainable in some Gateway Cities like Worcester or Salem, where affordable units are needed for residents who are finding increasing housing costs difficult to keep up with, said Cambridge Democrat Rep. Mike Connolly.
“Not all of our Gateway Cities are the same. Some of them have the Orange Line such as Malden. Pittsfield or others, very different. So there are concerns that these funds aren’t distributed in an even fashion,” he said.
Fiola pushed back, arguing rents in Gateway Cities would never reach as high as those in Boston — where sky-rocketing prices have forced many low-income residents out of the area.
“When a developer builds, let’s say, in Cambridge or Somerville, they’re getting the rents to support the development costs they’ve put into it,” she said. “In the Gateway Cities, the construction costs are the same but you cannot get the rents that you can get in the Boston metro market. That is precisely why this program was created.”
House budget chief Rep. Aaron Michlewitz said the branch decided to expand the program in the July spending bill because he believes it will move forward “a little quicker” than a tax relief bill being negotiated by the House and Senate.
House lawmakers held open their first formal session in 78 days for most of Thursday, dealing with routine business in the morning before turning to an extended break.
The bulk of the work on the 27 amendments filed to the bill occurred behind closed doors, with lawmakers cobbling together a mega-amendment that dealt with all proposed additions.
Millions in funding proposed for North Adams, Clarksburg, Adams, and Colrain to recover from storm-related damages and flooding were scrapped. Torrential downpours swept through part of New England earlier this week, inundating towns in Vermont and Western Massachusetts
A $20 million agricultural disaster relief fund designed to provide direct assistance to farmers in Massachusetts who suffered agricultural losses, financial losses, or property damage by an unforeseen event this year was also cast aside.
Another unsuccessful proposal from Winthrop Democrat Rep. Jeffrey Turco would have made available $30 million for municipalities to pay for public safety associated with housing “undocumented aliens,” according to the text of an amendment.
More than 38 state-funded hotels and motels in 28 communities are currently housing families — including newly arrived migrants — that are eligible for emergency assistance.
House Democrats included in the spending bill $180 million in funding for hospitals who were left in a vulnerable state after the pandemic. Michlewitz said the Executive Office of Health and Human Services would be tasked with working with hospitals to get funds in a “timely and efficient manner.”
The legislation also gives the Department of Public Utilities the power to update contracts for a 1,000 megawatt hydro-electric power project that will bring clean energy from Quebec, Canada to Massachusetts.
“The package that is before you today covers a number of different areas that require our immediate and timely attention as we work towards closing the books for FY23,” he said from the House floor earlier in the day.