How will the $4 billion bond bill spur housing starts in Central and Western Mass.?

It’s not news: Massachusetts has run out of homes that its residents can afford to live in.

Even Gov. Maura T. Healey acknowledges the housing crisis, locking people out of apartment rentals in cities, starter-home purchases in suburbs and places where seniors can afford to age in place throughout the state.

Healey has addressed the crisis with the filing of a $4 billion bond bill, the Affordable Homes Act, that would stimulate its production across the state.

A UMass Amherst analysis by the Donahue Institute’s Economic and Public Policy Research Group of the bond bill found that the investment would unlock $15.1 billion in governmental and private spending on the local, state and federal levels in four areas: Construction, professional services, finance and maintenance over five years.

On its own, the bill is expected to spur the creation of more than 40,000 new dwelling units, with 22,000 reserved for low-income residents and 12,000 for people earning a middle-range salary — $3.4 billion total invested in different programs.

Maintenance issues in public housing

The bill would funnel funds to local housing authorities for addressing deferred maintenance issues, decarbonization and rehabilitation to increase accessibility. There’s funding allocated to identify and redevelop unused public land and structures, such as public buildings, office complexes and retail locations that have fallen vacant.

Passage of the bill by the Legislature would necessitate 28 policy changes and three executive orders, and alter two tax credits aimed at developers to reward housing production.

Certain legislators in Central and Western Massachusetts are pumping the brakes, suggesting that the bill needs tweaking to ensure all communities benefit equitably from the proposals and funding included in the measure.

“This is an excellent and bold bill,” said Sen. Jo Comerford, D-Northampton, one of 16 legislators to sign on to a letter sent to the joint committees on Bonding, Capital Expenditures and State Assets along with Housing to remind them to keep the needs of Central and Western Massachusetts in mind when hearing the proposed legislation.

“…(Y)ou know the needs, assets and opportunities differ from those in the eastern part of the state,” the letter reads in part.

An analysis of the bond bill, undertaken by the Western Massachusetts Housing Coalition with the Western Massachusetts Network to End Homelessness, indicates changes are needed to acknowledge the rural character of the region.

Accommodate rural character

“Most of the policies are geared toward more urban communities,” said Gina Giovoni, executive director of the coalition. She noted that in four Western Massachusetts counties, 83% of the municipalities are rural in character, most lack a Gateway City designation, and are unintentionally excluded from many of the provisions in the bill due to density requirements and infrastructure issues.

The bond bill calculates construction cost of new dwelling units averaging $450,000. However, the cost in the state’s more rural regions hovers at $600,000 a unit, Giovoni said. That excludes the purchase price of land. The higher price, she said, reflects the struggle for professional services such as architects, engineers and contractors, and the higher cost of materials.

“We don’t have a hidden arsenal of transformers, generators, stockpiles of lumber,” Giovoni said. Density requirements also exclude rural Massachusetts and the bill fails to acknowledge the difference in infrastructure. For example, many areas rely on septic for waste disposal and private wells for water supply.

The western reaches of Massachusetts also suffer from a declining population and job loss as residents migrate eastward.

“We’re losing population,” Comerford said, noting the region needs dwelling units for older residents seeking to downsize, housing for the region’s workforce and generally affordable dwelling units. “We want to bring people back to Western Massachusetts. The issue is, how do we fine-tune the bond bill to benefit Central and Western Massachusetts?”

While legislators across the board agree that “something has to be done,” to address the crisis, the process can be the sticking point.

“We need to incentivize building more housing stock —single- and multi-family units through zoning reforms, low interest loans. We need to be creative,” said Sen. Michael O. Moore, D-Millbury. In his district, residents need the option of smaller homes for downsizing seniors and first-time buyers.

While the accepted wisdom is that an increase in availability and choice lowers prices, there is no guarantee that more options will alleviate bidding wars for home purchases and unwarranted, astronomical increases in rental prices, all factors in the current economic market.

NIMBY deterrent to housing starts

And hampering production for years is the “not in my backyard” syndrome.

“People realize that more housing is needed, but they have picked their neighborhoods, purchased their homes and like the environment they live in,” Moore said, explaining that siting a multi-family complex or even new single-family homes in a neighborhood can trigger NIMBY-ism. “They’re saying they realize people need a place to live, but not next to me.”

Moore’s first housing priority, however, is to address the crumbling foundation issue in his district. An impurity in the aggregate used to mix cement, pyrrhotite, a mineral that oxidizes when exposed to air and moisture, is wreaking havoc on homes in Central Massachusetts. Many with foundations poured with the cement are in danger of collapse, further aggravating the housing crisis.

Creating more dwelling units is in the long-term interest of the state, said Sen. Ryan Fattman, R-Sutton, one of the legislators who signed the letter.

Residents at both ends of the age spectrum, from young adults just starting out to senior residents wanting a smaller, more manageable home, have nowhere to live.

“There is, rightfully, a push to expand housing opportunities. The question remains: Where and how?” Fattman said.

Included in the bond bill are funding and policy changes that would embrace creative solutions. These include searching for public land that could be repurposed for housing, either through the redevelopment of existing structures or the construction of new buildings. Funding is also included for redevelopment of existing commercial or retail spaces.

Redevelopment of historic structures

Fattman pointed to the redevelopment of old mill buildings in the region, citing the Linwood Mill Apartments in Whitinsville, a high-end residential development for people over 55 and the American Optical campus in Southbridge as success stories.

Other communities, Fattman suggested, could repurpose similar structures. Mill buildings abound throughout Massachusetts. Redeveloped mills would serve the dual purpose of creating more dwelling spaces while preserving local history.

“Ebenezer Draper, a former Massachusetts governor, was also a mill owner,” Fattman said, referring to the Draper Mill complex in Hopedale. He still laments the loss of the complex, which was razed after it stood vacant for decades and the cost of renovating it became prohibitive.

“Redevelopment is a key to keeping the character and history of our communities,” he said.

Rep. David LeBoeuf, D-Worcester, welcomes several provisions in the bill. He believes the policy change that would allow the construction statewide by right of accessory dwelling units, essentially tiny homes built in someone’s backyard, would go a long way to address the issue of seniors aging in place. While Worcester has amended its zoning to allow the units, a city provision that it be owner-occupied will become moot if the state bonding bill is passed.

The proposed $1.6 billion earmarked for the repair and rehabilitation of the state’s public 43,000 housing stock units would be a welcome investment in the complexes in Worcester, LeBoeuf said.

His colleague in the Senate, Sen. Robyn Kennedy, D-Worcester, pointed out that many of the complexes have “long outlived their expected life.” She applauded the state’s proposed investment in the maintenance and rehabilitation of the complexes.

According to the bill, the state’s public housing stock would need $4 billion in capital repairs, such as fixes to roofing, boilers and building essentials. The suggested earmark is expected to preserve some 10,000 units overall.

Finding affordable housing can be daunting

Without public units, which can have waiting lists that are decades long, the search for a place to live that is affordable would be daunting, LeBoeuf said

Of the billions allocated to public housing, $150 million would be earmarked for decarbonization of the units, converting them to all-electrical appliances, as well as $200 million for the Housing Innovations Fun, to create alternative rentals for veterans, seniors, homeless and transitional units for residents in recovery.

“If people are housing-insecure, they cannot address the other issues in their lives — finding a job, mental health issues, substance use disorders, wellness issues,” LeBoeuf said, adding it is incumbent on the state to repair the public housing stock. “If we don’t address the maintenance issues in a timely manner, then we will have bigger problems in the long run.”

Kennedy is a proponent of the Alternative Housing Voucher Program, which can be used in any Massachusetts community, similar to Section 8 rental vouchers. The program is designed to house residents with alternative accessibility issues.

As a Gateway City, construction space for new housing stock is limited in Worcester. LeBoeuf, who sits on the Joint Committee on Housing, welcomes the investment in creative solutions such as repurposing structures and state land, rehabilitating existing housing stock including the city’s three-deckers, supporting accessory dwelling units and the investment in public complexes.

Rehabilitation and decarbonization projects should not result in cutting corners, lowering construction standards or in pricing current residents out of their traditional homes, LeBoeuf said. And once residents are housed, they must be supported to ensure they can stay housed.

“Yes, we have to increase the supply,” LeBoeuf said, warning that increasing the supply is not enough if residents cannot stay housed. The state must close the economic cycle that leads to foreclosures and evictions. Distressed municipalities must have the tools to navigate a way out of poverty, he said.

“Even as we increase the housing stock, we must do it in a sustainable way, with good labor practices, employing local residents, paying a livable wage,” LeBoeuf said. “Let us use public money to ensure public good. Let’s put Massachusetts to work.”

Production of dwellings must focus along the entire spectrum of incomes, Kennedy said, from the lowest wage earners to middle-income earners.

What is affordable housing in Worcester County?

The term “affordable housing” indicates that it can be comfortably paid for by residents earning below 80% of a region's area median income. That figure differs depending on the region. In Worcester County in 2022, the area median income for residents aged 25 to 44 was $94,408; for older residents up to age 64, that figure increased to $109,745, according to Neilsberg Research, a research and advertising group.

According to those figures, an “affordable” rental price is $1,573 a month for the younger group, $1,829 for the older group. Experts suggest dedicating no more than one third of household income to housing costs, either rentals or mortgages. In some communities, residents spend 50% or more of their income for housing.

“Affordable must be affordable by the workforce and extremely low-income residents,” Kennedy said.

Housing issues do not exist in a vacuum. Lack of dwelling space affects all aspects of a community, from funding for infrastructure to funding for schools and public services. LeBoeuf suggests the state could allocate funds to subsidize child care, early childhood education and services that support families with rent and mortgage payments.

“Housing starts must be sustainable. Yes, we want more housing, but we need to address the infrastructure, too,” Kennedy said. “These conversations are tied together.”

In discussing the proposed legislation, lawmakers suggested that investing in housing sends residents a message: “We want people to stay in Massachusetts: To live here, raise a family, build a business, spend the rest of their lives in Massachusetts,” Fattman said.

This article originally appeared on Telegram & Gazette: Area lawmakers praise creative, innovative approaches