Banker & Tradesman | November 21, 2012
As the recently released Greater Boston Housing Report Card 2012 made clear, there is a dire need for additional affordable housing in the region. In the eight years since passage of Chapter 40R – which provided additional state aid to communities that created “smart growth” overlay zones– the economic downturn and rising development costs have combined to hobble affordable housing construction in Massachusetts.
The report by the Dukakis Center for Urban and Regional Policy at Northeastern University lays out a number of ways in which cash-strapped communities and the commonwealth can work with private developers to encourage construction of more affordable housing in the state.
Many of the suggestions are commonsense and cost-efficient recommendations that should be adopted immediately.
For example, the report recommends that the commonwealth buy and land-bank promising sites and buildings – such as large, vacant mill buildings – for future development when the market improves. This is an innovative concept which fits in nicely, as the report notes, with the original community development mission of what is now MassDevelopment.
Buying land and buildings that are sitting unused, and are unlikely to be developed soon by the private sector, would enable the state to provide sites for affordable housing in the future at a reasonable price.
The report also addresses efforts to control development costs in affordable housing. It recommends that the state appoint a blue-ribbon commission to examine development costs of housing supported by public funding and find ways to reduce costs.
Whether or not another commission can actually produce any dollar savings remain to be seen.
But there are, as the report notes, ways to increase the effectiveness of 40R in Massachusetts that will cost little or nothing. Perhaps the easiest – and potentially most effective – tactic is to spread the word in the private development community about the benefits of Chapter 40R.
The state Department of Housing and Community Development (DHCD) should take steps to educate both local and national affordable housing developers and connect them with sites in Chapter 40R districts. Many private developers are still not aware that Chapter 40R developments can benefit from historic tax credits, low-income housing tax credits and other available housing subsidies.
And cities and towns that have approved Chapter 40 districts should promote the fact that they have land zoned as-of-right and spread the word that they welcome affordable housing.
The array of quasi-public and nonprofit organizations involved in affordable housing in Massachusetts should also take a more active role in publicizing development opportunities.
There are other sound suggestions in the report for encouraging private developers to enter the affordable housing market. One recommendation, however, seems misguided. A proposal that developers looking at land or buildings suitable for a 40R district should front the funds for a municipality to hire professional help, seems like it would discourage private developers from investigating affordable housing opportunities.
The study’s authors suggest that the funds could be repaid from the proceeds an incentive payment a community receives once a 40R district is approved. But private developers are unlikely to front the estimated $75,000 it costs a community for a year-long planning effort when they could lose that money if the district isn’t approved.
Overall, however, the report provides solid recommendations for encouraging the development of more affordable housing in Massachusetts.
The greatest obstacle to more affordable housing – resistance from many residents and officials of affluent communities – will take a long time to overcome.
But now is the time for the private development community to step up and start building.