Guest column: Affordable Homes Act state's blueprint to solve housing crisis

In Massachusetts, housing is the topic of the day, every day. We are in the midst of a housing crisis statewide, the result of 30 years of underproduction of housing in the commonwealth as our population has grown. This crisis profoundly affects the business community in Worcester, and the Worcester Regional Chamber of Commerce strongly believes the governor’s newly proposed $4.1 billion Affordable Homes Act is part of the solution.

For years, finding talent has been the No. 1 concern for our members. A lack of housing options of all types has exacerbated this issue for employers and small-business owners, and threatens not only the fabric of our community but also our economic well-being and competitiveness.

Gov. Maura Healey and Lt. Gov. Kim Driscoll have made housing their top priority. They appointed Secretary Ed Augustus Jr., our former city manager, to helm a brand-new Executive Office of Housing and Livable Communities and have charged him to roll out the administration’s housing blueprint: the Affordable Homes Act.

Over the next five years, the AHA will kick-start the production of over 40,000 new homes and preserve thousands more existing units in Massachusetts through a set of historic investments and innovative policies. The commonwealth is estimated to be 200,000 housing units short of a healthy vacancy rate, which would keep prices in an affordable range.

“We are short a couple hundred thousand homes in Massachusetts, which is the straightforward reason why home prices are so high,” said Healey at a Jan. 25 meeting with hundreds of business leaders hosted by the Associated Industries of Massachusetts. The strategy is to build more, and faster, an approach backed by the principles of basic economics: low supply and high demand equal high prices.

The Worcester Chamber has been supportive of innovative policies in Worcester that can boost housing production. We rolled out an extensive housing study in 2019 that detailed the need for more housing of all types to meet the demands of a growing and diverse population, and many local developers have used it to frame their investments.

We came out in support of a thoughtful inclusionary zoning ordinance to integrate mixed-income housing and fund more low-income housing development, something that few business associations around the country would even consider supporting. We have advocated for affordable homeownership opportunities with developers by consistently promoting the CommonWealth Builder Program, a subsidy through MassHousing to promote the construction of deed-restricted condos and homes. Every week we are working to support housing production in the city.

From the outset, the Worcester Regional Chamber of Commerce has been supportive of the AHA. Every five years, the governor proposes a new housing bond bill that contains a set of policies and funding priorities. Healey’s first housing bond bill, the AHA, has more than doubled the funding of the last bond bill in 2018.

Among the AHA’s funding is $1.6 billion in capital reauthorization for repairing and modernizing public housing, $800 million for the state’s Affordable Housing Trust Fund, $275 million to fund climate-resilient buildings to meet new stretch energy code requirements, $100 million for the CommonWealth Builder Program, $100 million for spurring public-private developer partnerships, $50 million for an innovative Momentum Fund where the state will inject subsidies into multifamily projects stalled by high interest rates and construction costs, and $50 million for MassDreams, a MassHousing down payment assistance program that ran out of funding in just a month when it was first rolled out in 2022.

The bill also proposes that accessory dwelling units be allowed by right in every zone in Massachusetts, such as the ordinance that Worcester just approved.

As with any large set of policy proposals, not everything is widely popular. The most controversial proposal in the bill is to allow cities and towns to levy transfer fees on all properties sold for more than $1 million. This is designed as a “mansion tax” for the Cape and Islands and similar subregions in Massachusetts with significant seasonal populations where homes are regularly selling for over $1 million.

If transfer fees pass the Legislature as part of the AHA, the Chamber would oppose a local option transfer fee in Worcester. The fee would disproportionately fall on the backs of small-business owners and small multifamily owners. Our analysis shows that over 90% of transfer fees would be paid by commercial properties since there is no language in the bill’s current form to exempt them from the fee. In a city that already has the seventh-highest commercial tax rate in the state, adding new taxes for businesses is not sustainable for our economy or housing market. We should focus on maximizing our existing policy tools.

The Affordable Homes Act must still make it through the Legislature on Beacon Hill, but we hope that legislators will quickly pass this essential legislation. The Chamber will continue to be an active advocate with the commonwealth’s leadership to ensure Worcester has what it needs to combat its housing crisis.

Alex Guardiola is vice president of government affairs and public policy for the Worcester Regional Chamber of Commerce.

This article originally appeared on Telegram & Gazette: Alex Guardiola on Massachusetts Affordable Homes Act for housing crisis