MA Division of Banks Awards $1.3 Million for Foreclosure Prevention Counseling and Homebuyer Education

May 17th, 2016 by Don Bianchi

The Massachusetts Office of Consumer Affairs and Business Regulation’s Division of Banks (DOB) announced recently that it has awarded $1.3 Million in grants to 11 regional foreclosure prevention centers and 8 individual first-time homeownership education centers across Massachusetts.  For a list of the grantees and the awards, see the Office of Consumer Affairs website.

The awards are made under Chapter 206 of the Acts of 2007, a law enacted as the foreclosure crisis was gaining steam, with MACDC and its Members instrumental in drafting and passing the legislation. Among other things, it regulates non-bank mortgage lenders for the first time, and uses the licensing fees from mortgage originators to fund the foreclosure prevention counseling and homeownership education awards.  Over the past three years, DOB has provided more than $4 Million for foreclosure prevention counseling and homebuyer education.

Thirteen of the 19 awards were made to MACDC Members or to coalitions including MACDC Members. In fact, over a five year period ending in December, 2015, MACDC Members have helped close to 6,700 households facing foreclosure secure a loan modification or other positive outcome.

Unfortunately, foreclosures continue unabated.  Foreclosure petitions in the Bay State, the first step in the foreclosure process, continued to climb, according to a report from The Warren Group, publisher of Banker & Tradesman.  In the first three months of 2016, lenders filed 3,367 petitions to foreclose statewide, a 30% increase from the 2,594 petitions filed in the first three months of 2015. During the same time period, completed foreclosures increased by 60% from the first three months of 2015.

MACDC will continue to support our Members, as they strive to help current homeowners preserve their homes and provide future homeowners with the tools for enjoying sustainable homeownership.  MACDC is currently advocating with the Legislature to increase in the amount of revenue from mortgage originator fees the DOB is allowed to retain, so DOB can increase the awards to fully fund the counseling agencies at $2 million in 2017. This would enable DOB to provide the funding level originally authorized in the 2007 legislation.

For more information on this, please contact Don Bianchi at



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The Foreclosure Crisis in Massachusetts is Not History

January 15th, 2016 by Don Bianchi

The foreclosure crisis has receded from the headlines.  But any notion that foreclosure is not a serious problem anymore would be news to nonprofit foreclosure prevention counselors on the front lines.

At a gathering on September 28, convened by MACDC and CHAPA, counselors from 13 nonprofit organizations immersed in foreclosure prevention spoke about the issues they encounter, the changing nature of the foreclosure crisis, and challenges going forward.  They spoke about lenders being aggressive in setting auction dates yet unresponsive to borrower requests for loan modifications. They noted that the funding that has sustained foreclosure prevention counseling is drying up.  They fear the impact on their neighborhoods of lenders initiating foreclosure while neglecting to maintain those properties once the foreclosure process has been initiated.

The data on foreclosures underscore the persistent nature of the problem.  A September article by The Warren Group, publishers of Banker & Tradesman, noted that foreclosure petitions in the Bay State rose in July, increasing 49 percent compared with July 2014.  This marked the 17th consecutive month of increases in petition filings. In the first seven months of the year, there were 6,360 petitions filed in Massachusetts, a 60 percent increase from last year's mark through July. Petitions are the first step in the foreclosure process, when banks petition the state courts for the right to foreclose.

Too often, loan servicers are taking steps that tend to exacerbate problems rather than remedy them.  Some are not complying with required standards when borrowers apply for loan modifications.  Many are reluctant to negotiate forgiveness of past due amounts, or to consider principal reductions, when borrowers encounter hardships.  Some are ignoring borrower authorizations of foreclosure counselors to negotiate on their behalf.

Counseling agencies are struggling to serve their clients with diminishing resources to fund their work.  Many continue to rely on annual grants from the MA Division of Banks through a program, authorized by legislation from 2007 that permits the Division to collect fees from licensed mortgage originators, retain up to $5 million of these fees, and use up to $2 million of the retained revenue to make grants for foreclosure prevention counseling and homebuyer education.  Earlier this year, through the State budget, the Legislature authorized the Division to retain $2.35 million from these fees, and the Division in 2015 made $1.3 million available in grants. The Request for Proposals for 2016 grants has recently been issued by the Division.

MACDC advocated for this program because we knew that a long-term, stable source of dedicated revenue would be necessary to address the foreclosure crisis.  Eight years later, with the number of foreclosures stubbornly high, the wisdom of the Legislature’s decision is evident. According to a 2015 report issued by the Division of Banks, in calendar year 2014, the 21 agencies who received awards served almost 5,300 clients.  Unfortunately, other funds that have historically supported this work have been reduced or eliminated, including funds from the Community Based Home Corps Program (funded by the MA Attorney General’s Office from prior legal settlements), HUD Counseling grants, and NeighborWorks America’s National Foreclosure Mitigation Counseling (NFMC) Program.

An article by journalist Loren Berlin, published in the November 10 issue of Shelterforce Weekly, addressed the dearth of funding nationwide for foreclosure prevention counseling. She notes, “Across the United States, hundreds of housing counseling agencies are struggling to regroup as elected officials declare the foreclosure crisis resolved and public funds to support mortgage default counseling services evaporate. The NFMC received $180 million in Congressional appropriations in 2007; it got roughly $50 million this year. Similarly, the U.S. Department of Housing and Urban Development’s budget for housing counseling services, which funds a variety of counseling services, including foreclosure prevention,  was just $47 million this year, down from $87.5 million in 2010. Additionally, many states have reduced or ended their support for default counseling, and the majority of funds from the 2012 national mortgage settlement have been depleted. This loss of government support is compounded by a similar decrease in funds from national foundations and large financial institutions.”

In Massachusetts, MACDC is working with CHAPA to identify and advocate for resources to fill this growing void. At the same time, we need to continue to support the work of the nonprofit counseling agencies involved in homebuyer education and financial literacy, so we don’t see a repeat cycle of foreclosures in the future.

Research has demonstrated the link between pre-purchase homebuyer education and more sustainable homeownership.  An analysis commissioned by the Federal Reserve Bank of Philadelphia in 2014 affirmed the benefits of pre-purchase counseling: in addition to improving homebuyers’ financial creditworthiness as they prepared to qualify for a home mortgage, individuals who received one-on-one counseling achieved better outcomes after purchase in terms of credit score, total debt, and payment delinquency than those who did not receive such counseling.

A working paper commissioned by national mortgage lender Freddie Mac in 2013 concluded that pre-purchase homeownership counseling reduced 90-day delinquency rates by 29% for first-time homebuyers taking out fixed-rate loans in owner-occupied one-unit properties under Freddie Mac’s affordable lending programs.

MACDC believes the path forward is clear.  The Massachusetts state legislature can take a major step forward by providing funding for foreclosure prevention counseling and for first-time homebuyer education to replace what has been lost; one way would be authorize the MA Division of Banks to retain a higher amount of revenue from licensing fees so the Division can increase its awards.  With this one step, we can help homeowners stay in their homes, protect neighborhoods from the negative impacts of foreclosure, and help today’s homebuyers to become tomorrow’s successful homeowners.

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GOALs Survey Results: MACDC Members Help More Than 72,000 Families in 2014

July 13th, 2015 by Don Bianchi

In 2014, MACDC Members helped over 72,000 families statewide obtain housing and job training, start or grow a small business, or receive a variety of services. Equally impressive, MACDC Members collectively generated investment of over $615 million in their communities in 2014. 

These are just two of the findings from the 2015 MACDC GOALs Survey.  These results are now available online in two publications: the first is our GOALs Report, which provides aggregated data on the work of our members and highlights stories from six CDCs that illustrate the impact our members have. Second, our 300+ page GOALs Appendix details the accomplishments of each individual MACDC Member in a wide range of activities and includes information on every real estate project completed in 2014 or in the pipeline as of December 31, 2014.  The Appendix includes a convenient table of contents to enable readers to quickly find the information that they need.

Since 2003, MACDC and its Members have collaborated on a collective effort to revitalize and stabilize communities across the state. The MACDC GOALs Initiative – Growing Opportunities, Assets, and Leaders across the Commonwealth – measures our annual progress in six areas of community development. Each year, we conduct a detailed online survey of our members to learn precisely what they have accomplished.  Over the twelve years of the GOALs Initiative, our members have helped to create or preserve over 15,000 homes and almost 33,000 jobs, and generated over $3.7 billion in economic investment in our communities.

This report highlights the terrific progress that MACDC Members have made over the past year. 

During 2014:

  • 2,569 volunteer community leaders were engaged in CDC activities;
  • 1,459 homes were built or preserved;
  • 6,161 job opportunities were created or preserved;
  • 1,304 locally-owned businesses received technical and financial support;
  • 72,046 families received housing, jobs, training or other services; and
  • $615 million in private and public funding was invested in our communities.


In this year’s GOALS Survey, for the first time, we ask CDCs who received Community Investment Tax Credit (CITC) to report on the program's impact; detailed results are included in the Goals Appendix, starting on page 139.  CITC is designed to enable local residents and stakeholders to work with and through CDCs to partner with nonprofit, public, and private entities to improve economic opportunities for low- and moderate-income households and other residents in urban, rural, and suburban communities across the Commonwealth. CDCs accomplish this through adoption of community investment plans to undertake community development programs and activities.

Of the 36 CDCs who received a CITC award, 30 reported an increase in operational capacity, and 29 expanded their activities as a result of the award.  Additionally, 32 of these CDCs increased their level of community engagement through increased use of volunteers, more intensive engagement from their Boards of Directors, and increasing resident participation in organizational events.


For more information on the results of the MACDC GOALs Survey, contact Don Bianchi at

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MA Division of Banks Awards $1.3 Million for Foreclosure Prevention Counseling

June 2nd, 2015 by Don Bianchi

In May, 2015, the Massachusetts Office of Consumer Affairs and Business Regulation’s Division of Banks (DOB) awarded $1.3 Million in grants to 11 regional foreclosure prevention centers and 10 individual first-time homeownership education centers across Massachusetts. For a list of the grantees and the awards, see the Office of Consumer Affairs website.

The awards are made under Chapter 206 of the Acts of 2007, a law enacted as the foreclosure crisis was gaining steam, with MACDC and its members instrumental in drafting and passing the legislation. Among other things, it regulates non-bank mortgage lenders for the first time, and uses the licensing fees from mortgage originators to fund the foreclosure prevention counseling awards. Over the past three years, DOB has provided more than $4 Million for foreclosure prevention counseling and homebuyer education.

MACDC Members are so effective at providing these services that 13 of the 21 awards were made to MACDC Members or to coalitions including MACDC Members. In fact, over a three year period ending in December 2014, MACDC members provided foreclosure prevention counseling to almost 12,000 households, and close to 4,600 of these households achieved a positive outcome.

MACDC continues to engage the Division of Banks, on behalf of our members and their low- and moderate-income constituents who still face challenges in buying and preserving their homes.  We met with DOB in November 2014 to talk about the need for ongoing support for both foreclosure prevention and homebuyer education. Clearly, DOB listened to the concerns of MACDC and other stakeholders as they developed the specifics of the program.

Unfortunately, the foreclosure crisis is not abating as fast as many had hoped.  Foreclosure petitions in the Bay State, the first step in the foreclosure process, continued to climb in March, posting a 68 percent increase compared with March 2014, according to a new report from The Warren Group, publisher of Banker & Tradesman. This marked the 13th consecutive month of increases in petition filings.

MACDC will continue to support our members, as they strive to help current homeowners preserve their homes and provide future homeowners with the tools for enjoying sustainable homeownership. MACDC is currently advocating with the Legislature to make sure the program is fully funded again in Fiscal Year 2016.

For more information on this, please contact Don Bianchi at

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Communities Come Together to Address Blighted Properties

April 7th, 2015 by Don Bianchi

Vacant, abandoned and blighted properties have challenged community developers, housing advocates, tenants and municipal officials for years. Recently, the Center for Community Progress ( brought together practitioners from Massachusetts and two other states to address the challenges posed by these properties through the Community Progress Leadership Institute (CPLI), a four-day symposium held at Harvard Law School.   

Three communities from Massachusetts (Brockton, Fitchburg and Lawrence) were chosen through a competitive process to participate in CPLI last month, along with MACDC, the MA Attorney General’s office, and representatives from cities in Missouri and North Carolina.  Each Massachusetts city delegation included a representative from a CDC (Neighbor Works of Southern MA in Brockton, Twin Cities CDC in Fitchburg, and Lawrence Community Works in Lawrence), along with city officials from local departments including City  Solicitors, Community Development Directors, and representatives from departments responsible for code enforcement, public health, and tax collection.  Most of the sessions focused on the numerous challenges associated with blighted properties and creative strategies for addressing them.  These included sessions on using data and analyzing markets; property tax systems and receivership; code enforcement, and land banking.  The Institute also offered some valuable sessions on the type of collaborative leadership needed to solve these challenges. The Institute culminated in State-specific planning sessions, where all the participants from Massachusetts could discuss how to take what we have learned and shared back to our communities.

Some of the key take-aways for me included:

Understanding markets is key to identifying successful strategies for a property or a neighborhood.  Markets are a driving factor when people consider where to live, invest, or build.  All strategies to address individual properties or neighborhoods are affected by the market, but markets are not all-powerful.  There are strategies than can influence the market.  Effective strategies are driven by data that can tell you how well the market is working and what affects the market.  There are national data sources (such as the Census and the U.S. Postal Service), local data sources (such as property records and tax records), and “point-source data”- data you can collect on individual properties.  Once you have the data, you can collaborate with others, in City government and outside of it, to develop a neighborhood action plan.

Code enforcement strategies should be applied strategically based on market factors.  Strategic code enforcement involves understanding your inventory of blighted properties, using data to identify a menu of remedies, and making market-driven decisions to deploy scarce resources.  This can be effective in all but the weakest markets.  In very weak markets, a strategy of boarding up vacant buildings and cleaning up illegal dumping may be appropriate.

Court-Ordered Receivership has proven to be effective tool.  Under Receivership, a Court appoints a receiver to manage blighted properties (vacant or occupied), spend on necessary repairs, and put a lien on the properties for the costs incurred.  In a middle-market neighborhood, where properties have value, the threat alone of Receivership may be enough incentive for a property owner to make the necessary repairs.  If there are a large number of blighted properties in a neighborhood, Receivership may be the best strategy for addressing blight.  Through the Attorney General’s Abandoned Housing Initiative, Massachusetts has aggressively addressed vacant properties in a number of communities.

Property tax systems need to be efficient, effective, and equitable.    An efficient system establishes clear timelines for each stage of enforcement, including what a property owner must pay and when the owner can redeem the property. An effective system yields maximum payments and avoids abandonment and deterioration.  An equitable system provides built-in circuit breakers for targeted populations (such as elderly, disabled and low-income people), with a clear program of hardship payment plans for certain properties.  While some municipalities sell their tax liens for an immediate infusion of cash, this means losing control of the properties and foregoing the interest payments associated with tax delinquent properties.

You don’t need to have a Land Bank to do land banking.  A Land Bank is a public entity that focuses on the conversion of vacant, abandoned, and tax-delinquent properties into productive use.  It can be an effective tool where other tools fail: when code enforcement is not effective because property owners have no economic incentive to invest in repairs, and where owners who acquire properties auctioned due to tax foreclosure repeat the cycle of disrepair.  Syracuse, New York pursued an aggressive strategy of tax foreclosure, resulting in a significant payment of delinquent taxes, a portion of which were used to fund the operation of the Greater Syracuse Land Bank to acquire many of the properties whose owners continued to neglect both their properties and their tax obligations.  While Massachusetts does not have State enabling legislation to allow municipalities to establish Land Banks, many communities have Redevelopment Authorities with untapped power and potential to acquire and convert properties to productive use, i.e. to “land bank”.

It all needs to work together.  On the last day of CPLI, all the participants from Massachusetts met to discuss their priorities and how they could work together to implement the strategies discussed over the prior three days.  We discussed the need for improved data collection systems, ideas for incentivizing compliance with code enforcement, strategies for dealing with tax title properties, and how to use the State’s Receivership statute to greater effect.  Within each City, all agreed that a more systematic and integrated system for addressing blighted properties can be accomplished through the cooperation of the various local stakeholders.  Statewide, we agreed that re-convening the participants to discuss strategies and share progress would be helpful- for the three communities involved in CPLI and other municipalities statewide.  MACDC and the MA Attorney General’s office agreed to convene the group and to organize a training on Receivership, as the first steps in an ongoing process.

Each vacant, abandoned and blighted property has a story, and typically its condition results from a number of inter-related and reinforcing factors- a weak real estate market, a neglectful property owner, and/or a lack of effective government response. By approaching the problems associated with these properties in a data-driven, collaborative, and aggressive manner, many of these properties can be turned around- resulting in better living conditions for residents, stronger neighborhood markets, and more housing for Massachusetts residents. 

Commenting Closed

Energy Efficiency Advisory Council Holds Workshops on Upcoming 3-Year Energy Plan

March 3rd, 2015 by Don Bianchi

The groundwork is being laid today for tomorrow’s energy efficiency programs. Over the past several years, affordable housing building owners, including many MACDC Members, have taken advantage of the LEAN Multifamily Program for energy retrofits to their buildings. A process currently underway will determine how this program and other energy efficiency programs will operate starting in 2016.

The Commonwealth’s Energy Efficiency Advisory Council (EEAC) held a day-long workshop on February 26 in Westborough, on the upcoming three-year Energy Efficiency Plan for 2016-2018. The EEAC, formed by the Green Communities Act, oversees the utilities’ planning process and monitors the delivery of efficiency services. The three-year plans are developed by the utility Program Administrators in collaboration with the EEAC and with input from stakeholders and policymakers. The morning workshop focused on residential programs, primarily for 1-4 family homes. The afternoon workshop focused on the multifamily sector and the low income programs.

MACDC’s Senior Policy Advocate Don Bianchi attended the workshops, and offered comments on how the upcoming plan can best serve the energy efficiency needs of the Commonwealth and support the work of community-based nonprofits engaged in this work. MACDC followed up with submission of written comments MACDC Letter to EEAC.

MACDC’s concerns are focused on the following:

First, the affordable multifamily housing sector needs a dedicated program that will provide whole-building incentives at a time of refinancing, when a larger scope of rehab work coordinates with the existing framework when housing finance and state and local subsidy allocations are made. We need a new program, with new resources, to complement the existing Low Income Multifamily Program, which is better suited to subsidized projects that are mid-lifecycle, or during ongoing operations.

Second, if the eligibility criteria for the Low-Income Multifamily Program is broadened, as is being recommended by the LEAN Program Administrators, then more resources need to be secured for the Low Income Multifamily budget. Currently, the queue for gas-related incentives can be up to two years long and cannot accommodate additional pipeline without more funding. If the budget cannot accommodate the program demand then the utility program administrators may not be capturing all the energy savings available. In the absence of additional resources, MACDC believes that broadening the LIMF Program to a broader range of incomes or for broader uses should not be considered.

Third, increased data access is critical. This includes enforcement of the DPU Order that utilities establish a comprehensive statewide database of energy efficiency program results. A comprehensive statewide database will unlock private capital for deeper savings. Furthermore, such a database, which offers data on specific geographic locations, will enable CDCs and other community-based organizations to add appropriate energy efficiency program offerings to their financial coaching, homebuyer education and other programs that match the needs of their communities.


If you want to provide comments to the EEAC, you can address them to:

Dan Burgess

Chair, Energy Efficiency Advisory Council

Acting Commissioner, MA Department of Energy Resources

100 Cambridge Street, Suite 1020

Boston, MA 02114 e-mail address:

Please note that the EEAC will be making its recommendations on the 3-year plan in late March, so the best time to submit comments for consideration by the EEAC is in the first two weeks of March, although they will accept comments at any time.

Questions about MACDC’s efforts can be directed to Don Bianchi at

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MACDC & Three CDCs to Participate in Community Progress Leadership Institute

February 11th, 2015 by Don Bianchi

MACDC will join three Massachusetts CDCs (Lawrence CommunityWorks, Twin Cities CDC, and NeighborWorks Southern Mass) at the Community Progress Leadership Institute (CPLI), to be held on the campus of Harvard Law School March 17-20.  Sponsored by the Center for Community Progress; this is the fourth year of the Institute. The Massachusetts participant cities (Lawrence, Fitchburg, and Brockton) will be joined by delegations from Kansas City and St. Louis, Missouri, and from Greensboro and High Point, North Carolina.

CPLI brings together delegations from multiple cities for intense leadership and technical assistance training under the guidance of national experts. These delegations return home better equipped to address large inventories of blighted and vacant properties for the benefit of their communities.

The selected cities range in population from just over 40,000 to nearly half a million and have citywide housing vacancy rates of 6-19% and high rates of abandonment. They also face challenges, such as mortgage foreclosure, poverty, tax delinquency, and other property issues. These cities were selected for CPLI because they demonstrate strong leadership and a commitment to developing new solutions for vacant, abandoned, and other problem properties.

Each participating City will send a delegation that includes a CDC representative, local public officials ranging from Housing and Community Development Directors to City Solicitors to staff from Inspectional Services and Health Departments, and another person from the private or nonprofit sectors. Don Bianchi will be representing MACDC, and the MA Attorney General’s office will also be participating.

For additional information, contact Don Bianchi at MACDC at

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Revitalize CDC Celebrates CDC Certification & New Name

January 8th, 2015 by Don Bianchi

The newly-named Revitalize CDC celebrated its membership in MACDC and its status as a newly-certified CDC by the MA Department of Housing and Community Development (DHCD) in an event at Springfield City Hall on January 6th. Formerly Rebuilding Together Springfield, Revitalize CDC has worked in Springfield since 1992, enabling homeowners to stay in their homes by repairing and making them energy efficient. In the last year alone, Revitalize CDC rebuilt 48 homes and utilized 2,500 volunteers.

At the event, CDC Executive Director Colleen Loveless welcomed the more than 40 attendees, while CDC Board Members, clad in matching Revitalize CDC t-shirts, stood alongside. She introduced Springfield Mayor Dominic Sarno, who praised the work of Revitalize CDC and its partnership with community and institutional supporters, including Mass Mutual and local lenders. Don Bianchi of MACDC spoke about the significance of achieving CDC certification, as Revitalize CDC was able to demonstrate to DHCD its community development success in Springfield, and that its constituency, including low-and moderate-income people, are meaningfully represented on its Board of Directors.

Leslie Belay of the Massachusetts Growth Capital Corporation (MGCC) then presented Colleen with a check to help seed Revitalize CDC’s initial foray into providing small business technical assistance. As Colleen noted, these new services will be available to the entire City of Springfield, with a focus on the City’s underserved Latino community.  Everyone present helped launch a new direction, and name, for an organization that has long served its community.

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Rural Housing Summit Highlights Unique Needs of Rural Communities

January 6th, 2015 by Don Bianchi

MACDC joined ninety leaders from rural communities across the Commonwealth at the Massachusetts Housing Partnership’s Rural Housing Summit on December 18 in Worcester. MHP convened the Summit as the culmination of a year-long effort to examine rural housing challenges, and explore policy and program options for addressing them.

The Summit was highlighted by opening remarks from DHCD Undersecretary Aaron Gornstein, who cited numerous examples of successful rural housing developments, whose sponsors persevered despite the challenges associated with limited resources and high infrastructure costs. A panel led by Representative Steve Kulik and Senator Dan Wolf spoke about some of the broader economic challenges faced by rural areas in employment, transportation, education and health care.

The Summit featured the release of a white paper that included six policy recommendations to help rural communities with their housing and economic challenges; the paper’s creation was spearheaded by a 19-person steering committee representing rural communities from Cape Cod to Western Massachusetts. The key legislative recommendation is to create a State Office of Rural Policy, to function as a research and policy clearinghouse for rural issues. The paper also includes program recommendations, including the recommendation to create a small-scale rental production program for projects of less than 20 units, with a set-aside for rural areas.

Don Bianchi of MACDC, as well as the Directors of several rural CDCs, served on the steering committee, and MACDC will continue to work with MHP to implement the recommendations in the white paper, and to advocate for our rural members.



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The Housing Capital Budget is on the Governor’s Shoulders

December 1st, 2014 by Don Bianchi

The most important decisions affecting how much the State spends on affordable housing will be squarely on the shoulders of the new Governor.  The State’s “Capital Budget”, which arguably has a bigger impact on affordable housing than what is commonly called the “State Budget” (and is more accurately called the “State Operating Budget”), is something over which the State Legislature has no control.

The State Operating Budget contains the funds appropriated by the State Legislature every year for all matter of State spending requirements.  This budget is absolutely essential for meeting a myriad of needs, including the need for affordable housing.  The Massachusetts Rental Voucher Program (MRVP) provides rental assistance so that very low-income families can afford to live in an apartment.  Other programs help individuals and families avoid homelessness, or helps them find housing and shelter if they become homeless.  The State cannot house families in need without these programs and other essential programs funded through the State Operating Budget.

Likewise, adequate funds from the State’s Capital Budget are essential to meeting the affordable housing needs of families across the State.  And in fact, the programs that provide the dollars for the actual construction or rehabilitation of this housing come primarily from the Housing Capital Budget, or as they are commonly called, bond funds.  Public housing authorities rely on bond funds for necessary improvements to the aging public housing stock.  Private affordable housing developers, including many nonprofits and CDCs, rely on bond funds for both the production and preservation of affordable housing.  Providers of housing for persons with disabilities rely on these bond funds as well.

Thus, the amount of the State’s Housing Capital Budget will be among the most consequential decisions facing Governor-Elect Baker in 2015, and each year thereafter.  At the MACDC Convention on October 25, then-candidate Charlie Baker made this pledge with regard to the housing capital budget: “We will not spend any less than the $190 million that is already on the table.”  Getting this pledge is a great first step!  But we have our work cut out for us - to hold the new Governor to his pledge to not cut the housing capital budget, and to advocate for a much-needed increase.

Like the State Operating Budget, the State’s Capital Budget originates with the State Legislature, through passage of a Housing Bond Bill.  While the operating budget appropriates specific dollar amounts to be spent on programs, however, the capital budget establishes overall spending caps, within which the Governor can raise funds through the sale of bonds.  In 2014, the Legislature passed, and Governor Patrick signed, a $1.4 Billion Housing Bond bill, establishing spending caps for nine separate housing programs for what is expected to be a 5-year period.  This was the largest housing bond bill in the State’s history, and provided authority to the Governor to spend what is needed on important housing programs.  It doesn’t take a complex algorithm, but merely a calculator, to figure out that $1.4 Billion over 5 years comes out to $280 million per year.  Yet Governor Patrick’s most recent Housing Capital Budget, released for the fiscal year that began July 1, provides an increase from the prior year to just over $190 million for the current year.  Why the mismatch?

In 2014, the Governor, through the Executive Office for Administration and Finance (A&F), established a 5-year Capital Investment Plan that covers the broad spectrum of investment categories to be funded through the sale of bonds.  These include housing, economic development, transportation, health and human services, energy and environment- to name a few.  From this plan, the Administration sets spending limits (bond caps) for the current fiscal year for each of these categories.  Therefore, in any given year, the amount of the bond cap for housing is a function of two determinations by the Governor: first, the overall amount of funds that the State spends in the capital budget, and second, the relative share of that amount to be spent on housing.  Within the caps established by the Housing Bond Bill, the amount of the housing bond cap is totally within the Governor’s sole discretion.

How has housing fared over the years in the capital budget?  Well, in fiscal year 2007 (the year that started July 1, 2006), then-Governor Romney’s last capital budget set the housing capital budget at $147 million.  Since then, in the capital budgets established by Governor Patrick, we have seen an increase, to where the housing capital budget (for fiscal year 2015) currently stands at $190.5 million, an increase of just under 30% over 8 years.

Of course, the dollars are spent on specific programs that allow important housing projects to go forward, which is why we ask for more money. (Massachusetts FY 2015 Housing Capital Budget)  The Affordable Housing Trust Fund, the Housing Stabilization Fund, and the Housing Innovations Fund help address the pipeline of affordable rental and homeownership development proposals that are forced to wait too long, often several years, for commitments of state resources.  The Facilities Consolidation Fund and the Community Based Housing Program expand housing choice for persons with disabilities.  The demand for funds under these, and other, programs far exceeds their supply.  Furthermore, the State dollars awarded leverage tens of millions of federal dollars from low-income housing tax credits and other programs, and locally-allocated dollars as well.  This is why each year MACDC, and our allies, advocate with the Governor for more money in the Housing Capital Budget.

There is one thing we know about Governor-Elect Baker, from his role in a prior administration as the Secretary of Administration and Finance.  He knows that when it comes to programs to fund affordable housing development, the capital budget is the key.  And so do we.

Commenting Closed


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