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Achieving production of 349,000 (11,600 units/year) new housing units in the region by 2030 is a necessity given the projected needs of the region’s population.  According to the Greater Boston Housing Report Card, the most recent production estimate for the period from 2006-2007 is 15,945 housing units.  The average number of housing units produced between 1998 and 2005 was 11,586.  However, many years tend to feature slow growth – clearly, 2009, immediately following publication of the MetroFuture plan, will be a slow year for housing production – and production of affordable units as well as units with three or bedrooms is often weak.  With ongoing shifts in market conditions, a more realistic and planned approach is needed to produce a steady supply of housing, especially for households in need.

Historically, the federal government has been a key player in providing funding for affordable housing.  Declining federal funding for housing in Massachusetts has been a long-documented problem.  Federal support for affordable housing fell by seven percent or nearly $29 million from 2006 to 2007. 

4)    Increase state funding for affordable housing development
State funding for affordable housing is lower than it was 18 years ago.  According to the 2006 – 2007 Greater Boston Housing Report Card, the 2008 budget for Department of Housing and Community Development programs was $199 million, 23% less than it was in 1991 and only half the $410 million committed in 1989.  A housing bond bill is needed every five years to ensure continued funding at appropriate levels.  These bond bills must seek to restore historic levels of state support for housing production and preservation, and they must be accompanied by significant support via appropriation as well as bonding. 

4.a    The Legislature and Governor should provide $200 million to $250 million annually for housing development beginning in 2013

5)    Develop a Regional Housing Fund
In addition to a basic need for more dollars to produce housing, funding from the state and federal governments often have different priorities and restrictions.  Many municipalities have local funds available through the Community Preservation Act, the CDBG and HOME Programs, among other sources.  

A regional housing fund could consolidate smaller funding streams and would fund regional housing initiatives and priorities identified in the Regional Housing Needs Assessment.  A regional entity, either an existing non-profit regional housing organization or community action agency, could administer these funds.   Key stakeholders should be involved in decisions regarding the use, allocation, and administration of the fund.   

5.a    MAPC, municipalities, and allied organizations should develop a proposal for a regional housing fund

6)    Form municipal Affordable Housing Trusts
Municipalities should form and fund Municipal Affordable Housing Trust Funds through MGL Chapter 44, Section 55C.  These locally-controlled groups administer local funds, often generated through “payments-in-lieu of housing” from inclusionary zoning by-laws; these funds may also include monies generated by the Community Preservation Act.  Working with a local Planning or Community Development Office and/ or a local Housing Partnership Committee can help ensure that housing funds are directed to address specific community needs, such as downpayment assistance for first-time buyers or acquiring a key development parcel.

6.a    Municipalities that have local affordable housing funds through Inclusionary Zoning, CPA, or other mechanisms should establish an affordable housing trust fund

6.b    State law and programs should enable and encourage neighboring municipalities to form regional affordable housing trust funds to serve common needs

7)    Recognize and support the nonprofit housing development sector
Nonprofits play a critical role in developing affordable housing and preserving housing in communities where there are limited affordable housing opportunities for lower-income households.  Community Development Corporations (CDCs) and other nonprofit housing developers produce hundreds of housing units annually, providing first-time homebuyer opportunities, affordable rental units, and permanent housing options for transitional and at-risk populations.  Nonprofit housing organizations facilitate challenging real estate deals (even when they are not the actual developer), invest in weak markets, and often structure their contracting to create more opportunities for women and minority contractors and low-income residents.  In return they receive low fees and very limited financial support for their work, making it a significant challenge to meet their mission.  

While a critical player in the housing arena, nonprofits compete for often meager operational and project funding.  Equity and programmatic funding are often hard to secure for CDCs, especially since the elimination of the state’s Community Enterprise Economic Development Program.  

Nonprofits are also burdened by complex funding systems and multiple layers of financing that make it increasingly difficult to create a revenue stream sufficient to sustain their programs.  These financial challenges also weaken the sector’s ability to engage in pro-active planning, community engagement and community building that can support housing development and other neighborhood goals.

7.a    The Massachusetts Housing Partnership’s Housing Production Support Program should be increased to $2 million annually

7.b    The Department of Housing and Community Development should revise scoring criteria for the Qualified Allocation Plan in regard to MetroFuture consistency and nonprofit participation

8)    Increase production of “scattered site” affordable housing development
“Scattered site” housing developments comprise multiple units built on multiple parcels, often in single-or multi-family homes.  This model is in contrast to affordable housing development in which all affordable units are built in the same location, either as a stand-alone development or integrated into a development with market-rate units.  Scattered site housing construction has advantages because developers can recognize some economies of scale that go along with construction of multiple units, without concentrating low-income residents or needing large parcels.  The affordable units can involve new construction or rehabilitation of existing units.  This can be a useful model where there are multiple tax title or foreclosed properties within a municipality or other opportunities for acquiring multiple parcels.  

An effective strategy for the development of scattered site public housing (especially in suburban locations) may involve partnerships between local housing authorities and nonprofit housing developers with more experience in project design and management. 

8.a    MAPC and allied organizations should study ways to increase collaboration between local housing authorities and nonprofit housing developers

8.b    MAPC should support the efforts of the Massachusetts Housing Partnership and other allies to encourage housing development and preservation by local housing authorities

9)    Encourage adoption of Smart Growth Zoning Overlay Districts
Smart Growth Zoning Districts (commonly known as “40R districts” after the state statute that enables them) can increase the supply of housing and decrease its cost by zoning land for dense housing.  40R provides incentive payments to municipalities for establishing each district and bonus payments for each unit built.  There is a requirement that 25% of new units are deed-restricted and affordable.  A companion statute (40S) provides “school cost insurance” for municipalities by making up the difference between actual tax revenue and the cost of educating students who live in new 40R developments.  Together, these two programs can encourage more municipalities to zone for and permit higher density development in appropriate locations.  

As of October 2008, eight MAPC municipalities had an approved 40R District: Belmont, Boston, Chelsea, Lynnfield, North Reading, Natick, Norwood, and Reading.  These districts are zoned to produce up to 1,690 units, 402 of which would be affordable to households at or below 80% of the area median income.

Also, see Strategy 5, Recommendation 4 for further suggestions in regard to Chapter 40R.

9.a    The Commonwealth, through DHCD, should expand technical assistance programs to support creation of 40R Districts

9.b    The Legislature should secure a guaranteed long-term funding stream for the school-cost reimbursement program (40S)