This week, Massachusetts Governor Maura Healey signed a landmark housing bill into law described as “the most ambitious legislation in Massachusetts history” to tackle the state’s greatest challenge – housing costs.
The Affordable Homes Act and related initiatives will support the production, preservation and rehabilitation of more than 65,000 homes statewide over the next five years. The legislation authorizes $5.16 billion in spending over the next five years along with 49 policy initiatives to counter rising housing costs caused by high demand and limited supply.
“Today we are taking an unprecedented step forward in building a stronger Massachusetts where everyone can afford to live,” said Governor Healey. “What the Affordable Homes Act represents is our ability to come together and address our toughest challenges.”
Key spending authorizations and policy changes include allowing accessory dwelling units (“ADUs”), unprecedented investment in modernizing the state’s public housing system, boosts to programs that support first-time homebuyers and homeownership, incentives to build more housing for low to moderate-income residents and convert vacant commercial space to housing, and encourage green housing initiatives.
“By Right” ADUs are Here
Despite the unprecedented funding focused on housing production, one of the biggest potential areas of impact for the Affordable Homes Act is a new, statewide allowance of “by right” accessory dwelling units—“ADUs”—that are less than 900-sq ft as long as they are located on single-family zoned lots.
Often referred to as in-law apartments, ADUs can be attached or detached from a single-family home and often take shape as a basement or attic conversion, a cottage in a backyard or a bump-out addition to a home. This new policy replaces a patchwork of zoning regulations across the state with a uniform law that allows homeowners on single-family lots to add these small units without needing a special permit or variance unless they want to add more than one.
Construction of ADUs would still subject to local building codes and zoning laws governing things like setbacks and parking requirements.
This change will hit hard in Manchester, where homeowners seeking to construct an ADU face a form of Catch 22. First, ADUs require a special permit (formally seeking special consideration by the Zoning Board) but homeowners are not eligible to apply unless their dwelling is on a double lot. For many, that defeats the purpose. If they wanted to create a new living space and they already have a double lot, why not simply build another small dwelling?
ADUs are seen as a powerful, easy way to alleviate housing pressures. They allow valuable rental income for young people starting out or seniors looking to scale down. They offer added security or companionship for older residents. And they can be a great benefit for handicapped individuals who are seeking “within reach” caregivers.
In 2019, Manchester resident, architect and former Planning Board member Gary Gilbert led a volunteer group to study ADU laws and recommend a solution to the Manchester Planning Board. That failed, as did two other ADU bylaws proposed at Town Meeting by the Planning Board in the last five years.
Tuesday’s signing of the Affordable Homes Act ends all that.
Much like Manchester, the majority (74%) of Essex’s total housing stock (1,662 units) is comprised of single-family detached homes. The Essex Planning Board, which is currently in the middle of a first ever, multi-year overhaul of the town’s comprehensive zoning bylaw, expected “by right ADUs” to come down from the state. As a result, the board factored the potential impact of ADUs into planning.
Funding to Spur Expanded Affordable Housing
In addition to new policy initiatives and spending authorizations for housing, the Affordable Homes Act authorizes a record $2 billion for the repair, rehabilitation and modernization of the state’s public housing portfolio. Massachusetts has the largest public housing portfolio in the US, with more than 43,000 units, but it has been underfunded for decades.
This is no more evident than in Manchester.
“We’re going to take a hard look at the bill,” said Manchester Town Administrator Gregory Federspiel, who added it may take months to understand exactly what the bill means for Manchester.
Whatever it is, though, it’s good news. After all, three of Manchester’s subsidized housing developments—The Plains, Newport Park, and Loading Place Road—are among the hundreds of subsidized housing properties across the state that have fallen into considerable disrepair. The Manchester Housing Authority (MHA) and the Affordable Housing Trust (MAHT) have aggressively pursued strategies to rehab all 84 of Manchester’s low-income units, while also trying to double the town’s subsidized housing units. But the environment for housing development is challenging. In five years, three RFPs issued to developers by the MAHT and MHA have yielded no traction.
The good news is the bill programs receiving dramatic increases in authorizations include $800 million for the Affordable Housing Trust Fund, which doubles the previous authorization, an increase in the Housing Stabilization and Investment Fund to $425 million and $275 million for sustainable and green housing initiatives, which is more than four times the previous authorization.
“Manchester certainly qualifies, that’s for sure” said Federspiel. And if the Manchester Housing Authority can access some of those funds, all the better.
But if these funds are targeted at rehabbing existing low-income units, what of the production of new, needed units that could offer an option for older seniors to remain in their communities? Right now, seniors who sell their homes have few options to downsize. And if they qualify for low-income housing, the waiting list is long. Very long.
The new bill is designed to address some of these issues. First, the bill establishes a new permanent revolving fund to be to accelerate the development of mixed-income multifamily housing, called the “Momentum Fund.”
This could help initiatives like the Manchester Affordable Housing Trust’s plan to expand subsidized housing stocks in town. The Affordable Homes Act authorizes an initial $50 million for the fund, which will help directly move the needle on the development of housing with funds to bridge financial gaps that have dogged the MAHT’s plans for expansion.
Housing’s Relationship to Economic Development
JD Chesloff, president and CEO of the Massachusetts Business Roundtable said housing is about a lot of things, including economic development since high housing costs are a deterrent for good companies, and good employees who simply choose to leave the state if staying is not economical.
“In a recent survey of Roundtable members—CEOs and senior executives from some of the largest employers in Massachusetts—83% cited the state’s high cost of living as our greatest competitiveness challenge, and 91% said addressing the high cost of housing by increasing production was the best solution,” said Chesloff.
“Housing plays a critical role in supporting our local economies and this bill will make a meaningful difference in helping Massachusetts residents to live, work and stay here in the state that they love,” agreed Lieutenant Governor Kim Driscoll. “Together we understand the importance of investing in housing in order to remain a competitive state.”
