BPDA DELAYS IDP VOTE; FY24 BUDGET AND TAX PROPOSALS HEAD TO CONFERENCE COMMITTEE; GOVERNOR ANNOUNCES HOUSINGWORKS IN CAPITAL INVESTMENT PLAN

NAIOP's Advocacy Alerts are generously supported by Serlin Haley and Pierce Atwood.

CITY OF BOSTON

BPDA DELAYS IDP VOTE

In mid-May, the Boston Planning and Development Agency (BPDA) released an updated proposal for the City's Inclusionary Development Policy (IDP). A full summary of the proposal, along with the cash out proposals for condos and rentals, can be found here. Additionally, a presentation from the BPDA on this updated language can be found here.

On May 30, NAIOP Vice President of Policy & Public Affairs Anastasia Nicolaou testified in strong opposition to the proposal. NAIOP also submitted comments in opposition to the proposal that included requests for clarification and additional consideration ahead of potential adoption.

The BPDA chose not to advance the proposal to the June 15 Board Meeting for approval. It remains to be seen when the BPDA Board will vote on this proposal, however NAIOP continues to have conversations with policymakers at the City to ensure that the commercial real estate community's concerns are understood.

This proposal comes at a time when policymakers in markets like San Francisco are recommending slashing the requirements by as much as half due to the detrimental effect high IDP rates have on overall housing production. In the City of Boston's own commissioned study, there is cautionary data showing that housing production suffers when the IDP is pushed too high for the market to sustain.

NAIOP strongly believes that if enacted, the BPDA's IDP proposal will do nothing but further dampen already depressed housing production in the City of Boston, undermining the City's goals for growth and further driving up the cost of market-rate housing.

MASSACHUSETTS LEGISLATURE

FY24 Budget Now in Conference Committee

On May 25, the Massachusetts State Senate finalized its budget proposal for FY24. The proposal, which divides the new 4% surtax on incomes over $1million across 18 new line-items focused on transportation and education, also includes an extension of certain eviction protections. NAIOP was happy to see that the Senate adopted an amendment ensuring that all applications for emergency rental assistance must be made “in good faith” for tenants to qualify for eviction protections while they await a pending application for emergency rental assistance.

The Senate and House will now work to reconcile the two budgets via conference committee led by Senate Ways & Means Chair Michael Rodrigues and House Ways & Means Chair Aaron Michlewitz.

Importantly, the House version of the FY24 budget includes language to extend the Brownfields Tax Credit for another five years in direct response to NAIOP’s advocacy and work convening a broad coalition of real estate, business and affordable housing groups in support of the extension. NAIOP hopes that the Legislature will include the Brownfields Tax Credit extension in the budget due to time sensitive deadlines within the program's administration.

NAIOP has submitted testimony to ensure the industry's priorities are top of mind for legislative leaders as they negotiate the final budget, expected to be released before the new fiscal year begins on July 1, 2023.

Tax Reform Heads to Conference Committee

On June 15, the Massachusetts Senate finalized their tax proposal in response to the Governor’s proposal filed earlier this year, and the House of Representatives' proposal put forward in April. The Senate proposal includes three priorities for NAIOP – the extension of the Brownfields Tax Credit; a $20million increase in the Low Income Housing Tax Credit; and a tripling of the annual allocation for the Housing Development Incentive Program, which helps close the funding gaps for market-rate housing development in Gateway Cities, along with a one-time allocation of $57million to clear out a 1,700+ unit backlog.

NAIOP's advocacy was successful at preventing the adoption of problematic amendments during the debate, including defeating proposals that would weaken HDIP; and blocking a statewide increase in the deeds excise tax.

The two chambers now enter negotiations to debate the final package. NAIOP will be submitting testimony in the coming days advocating for industry priorities and policies that foster Massachusetts' economic competitiveness for residents and businesses across the Commonwealth.

THE GOVERNOR'S OFFICE

Governor Healey Announces HousingWorks in Capital Investment Plan

Today, the Healey-Driscoll Administration released a $14 billion, five-year capital investment plan.

It includes:

$1.5 billion investment in housing, including a $97 million annual contribution to launch a new HousingWorks program.
$1.4 billion to reduce emissions through transportation electrification, creation of sustainable transportation alternatives, and construction of resilient infrastructure to withstand the impacts of a changing climate.
$1.2 billion in capital funding for the Executive Office of Economic Development to invest throughout the commonwealth.
$840 million for climate-resilient higher education campus improvements.
$262 million towards replacing the Cape Cod bridges.
$270 million annually for local transportation programs.

NAIOP applauds the Healey-Driscoll Administration for the creation of the HousingWorks program. Modeled after the successful MassWorks grant program, HousingWorks will inject new funding into the market and creates a flexible tool to support housing development, preservation, and rehabilitation, with the goal of enabling the construction of up to 300 new affordable housing units across the Commonwealth each year. Establishing HousingWorks is a critical step to providing additional needed resources for housing production and preservation in Massachusetts.

NAIOP looks forward to working with the new Secretary of Housing and Livable Communities, Ed Augustus, and the entire Healey-Driscoll Administration to advance strategies that will help address the housing crisis and secure Massachusetts' economic future.