Reform HDIP Before Expanding the Program

June 5th, 2023 by Don Bianchi

The Massachusetts Legislature is considering legislation (S. 1779 and H. 2724) to increase the $10 million state tax credit cap for the Housing Development Incentive Program (HDIP) to $57 million in FY2024, and then to $30 million per year thereafter. If enacted, this legislation will also increase the maximum State credit from $2 million to $5 million per project. MACDC believes that the highest priority for housing policy in Massachusetts is the production and preservation of affordable homes, both rental and homeownership. Before we consider expansion of the State tax credit for HDIP, we need to reform the program to ensure that all projects receiving these credits include affordable homes.

HDIP, established by M.G.L. Chapter 40V, caps affordability at not more than 20% of the units in a project. It provides two tax incentives to developers to undertake new construction or substantial rehabilitation of properties for lease or sale as multi-unit market rate housing:

· A local option real estate tax exemption from all or part of the increased property value resulting from the improvements; and

· State tax credits, currently up to $2 million per project, for Qualified Project Expenditures that are awarded through a rolling application process.

For context, in FY2023, the Baker Administration’s Capital Budget for affordable housing was just over $150 million—a significant amount, to be sure, but nowhere near what we need to meet our affordable housing needs in Massachusetts. MACDC supports the goal established by Citizens Housing and Planning Association (CHAPA), to create 40,000 affordable (publicly subsidized) homes, and an additional 20,000 homes that are deeply affordable, including homes affordable to households with housing vouchers and households with incomes below 30% of Area Median Income (AMI), by 2030. To reach this ambitious goal, we need to take advantage of every opportunity to create affordable housing.

A December 2022 Report by the Massachusetts Law Reform Institute (MLRI) shines light on the real impact of HDIP. According to the Report, as of August 2022, 61 HDIP projects (4,063 units) in 18 cities have received credit awards or reservations totaling $89.4 million. Most projects are 100% market rate and only 2% of the units overall are or will be affordable—but even those units, often targeted to households with incomes at or below 80% of AMI, are too expensive for the low-income residents facing the highest cost burdens.

We simply cannot afford to spend $30 million of our annual State housing dollars, equal to one-fifth of the current year’s housing capital budget, on market-rate housing. This is true whether we are talking about direct subsidy or tax credits. A strong case can be made to use a reformed HDIP to support housing in Gateway Cities with a mix of incomes.

Fortunately, there is legislation to do just that. S.870 by Senator Jamie Eldridge, “An Act to Improve the Housing Development Incentive Program,” would require at least 20% of the units in a HDIP Project to be permanently affordable to households with incomes below 50% AMI for rental units, and below 80% of AMI for homeownership units. It would also make other improvements to HDIP, such as requiring the Department of Housing and Community Development (DHCD) to publish and use an HDIP credit allocation plan for scoring and evaluating HDIP applications. Such a plan would be similar to the Qualified Allocation Plan (QAP) DHCD publishes to guide evaluation of projects using the Low-Income Housing Tax Credit.


Let’s make HDIP a true mixed-income program for Gateway Cities, before we consider spending more limited state dollars on a program that is not adequately addressing the crisis in housing affordability in Massachusetts.

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CDCs Lead the Way in Helping Families Buy, and Keep, Their First Home

June 5th, 2023 by Don Bianchi

On May 16, 2023, the Healey Driscoll Administration’s Division of Banks announced nearly $3 million in grants to 23 organizations across the state to fund first-time homeownership education programs and foreclosure prevention counseling centers throughout Massachusetts. The funds were awarded through the Chapter 206 Grant Program, which assists homeowners who are experiencing financial hardship and prospective homebuyers who are determining if homeownership is right for them. 

As usual, MACDC Members led the way, with 14 CDCs collectively receiving over $2.25 million, more than 75% of the funding awarded, including awards to the following CDCs: 

  • ACT Lawrence 
  • Allston Brighton CDC 
  • Asian CDC 
  • Codman Square NDC 
  • Lawrence Community Works (LCW) 
  • Neighborhood of Affordable Housing (NOAH) 
  • NeighborWorks Housing Solutions 
  • NewVue Communities 
  • Somerville Community Corporation 
  • South Middlesex Opportunity Council (SMOC) 
  • Southeast Asian Coalition of Central MA (SEACMA) 
  • Urban Edge 
  • Way Finders 
  • Valley CDC 

From the MACDC GOALs Survey, we know that CDCs provided homebuyer counseling to more than 7,500 households in 2022, and foreclosure prevention counseling to more than 700 households. It’s a powerful combination: sound public investment coupled with a high-capacity nonprofit program delivery system. 

MACDC’s advocacy is central to this success. MACDC played a central role in passage of Chapter 206 of the Acts of 2007, which instituted regulatory oversight of previously unregulated mortgage lenders, and established funding for nonprofit counseling agencies.  Our advocacy was spurred by our own “early warning system,”- our meetings with CDCs in the summer and fall of 2006, when our members alerted us to a rise in foreclosures in their communities- months before the press picked up on it- as described in this New York Times article from December 2007. 

Each year since then, MACDC has advocated with the MA Legislature to authorize funding, and with the MA Division of Banks for awards- and the almost $3 million awarded this year is among the highest amount provided in the more than 15 years since the law’s passage. “MACDC is grateful to the Division of Banks for its unwavering support for the CDCs and other nonprofit counseling agencies which collectively have assisted more than 90,000 households since 2008,” noted Don Bianchi, MACDC’s Director of Housing. “We continue to be amazed by the skill and determination of so many of our members in providing education to help low-and moderate families buy their first home, and providing counseling to homeowners facing financial challenges so they can remain in their homes.” 

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