Growing the Housing Resource Pie
As we begin a new year, MACDC plans to be working on a wide cross section of housing issues. Our goal is to create an affordable housing system that is better able to meet the diverse needs of our residents and communities. This will require both more money and more flexibility. In a series of articles to be published over the next few weeks, MACDC will articulate some of its thoughts about how we do this. The first article talks about how we can grow the resource pie – the first and most essential step to meeting increasing demand for affordable housing. In subsequent articles, we will talk about how to reduce costs, how to make our programs more flexible, and how to ensure that we are allocating the limited resources that we have in a way that is more responsive to local market conditions and to the hopes and desires of local communities.
Growing the Housing Resource Pie
Toward the end of a lovely video tribute to Jeanne DuBois, the former Executive Director of Dorchester Bay EDC, she is shown repeating many of her favorite sayings, including this one: “There is never enough money and there is always enough money”.
Jeanne, of course, is correct. In a society as rich as ours, there is always enough money to get something done if it is deemed important enough and if the sponsors are creative, persistent and patient in assembling the necessary resources. CDCs, like Dorchester Bay, have become masters at this, cobbling together funding from 10 or more sources, working for years to put the deal together, and then pinching pennies to make the numbers add up. Every year, we see more and more examples of this capacity to create exciting, impactful projects.
So why don’t we do it more often? Well, because Jeanne is also right that there is never enough money … to do all the projects that are needed.
This is why MACDC is currently working with countless allies at the state and local level to grow the resource pie and ensure that resources are used as efficiently as possible. These efforts include the following:
- Continue to grow the MRVP program steadily in the coming years because it is one of the few programs that targets our most vulnerable families and provides a long-term solution to family homelessness. With support from Governor Baker and the State Legislature, housing advocates just won a major increase in funding for the Mass. Rental Voucher Program from $65 million to $90.9 million, a 40% increase, but more funding is needed to meet the incredible needs within our communities.
- Increase the Commonwealth’s Low Income Housing Tax Credit. MACDC recently testified in support of legislation filed by Rep. Kevin Honan that would do this by $15 million over four years to help preserve some of the 5,000 “13A projects,” whose affordability restrictions are set to expire in the next few years. MACDC is also working with Preservation of Affordable Housing (POAH) to stretch those tax credit dollars even further by adding a new Donation Tax Credit (DTC) modelled after programs in Illinois and Missouri. The DTC that will allow us to leverage significant federal tax savings by structuring transactions as donations to nonprofit organizations rather than sales.
- Increase the Commonwealth’s so-called “Volume Cap” that is allocated to Multi Family Rental Housing because this allows developers to take advantage of tax exempt bond financing and the 4% federal tax credits that can help subsidize both preservation and some production projects. In the past, these 4% credits have not been a constrained resource, but going forward there will likely be insufficient credits to meet all the demand. The affordable housing field could lose millions of dollars of subsidized tax credit equity unless we can restore some of this “volume cap” to rental housing.
- Secure new funding for the Brownfields Redevelopment Fund. This Fund has run out of money and it is a vital tool for putting contaminated land to use for housing and job creation. MACDC is seeking at least $15 million in new funding to ensure that this program remains viable.
- Allocate a reasonable proportion of the state’s capital budget to affordable housing. Last year, the Governor allocated $94.7 million to privately-owned affordable housing (in addition to $90 million for public housing), but this is not enough. We will continue to push to see this number increased next year.
- Fund the Housing Preservation and Stabilization Trust Fund, a relatively new program created in 2013 that provides housing for extremely low-income households and those who need supportive services. CDCs and other nonprofits are particularly focused on serving these populations and this year we secured $11.5 million for the program – overcoming a veto from Governor Baker who sought to reduce the line item to $10 million. We need to ensure that this program is consistently funded each year.
- Grow the City of Boston’s Housing Resources from $31 million to $51 million per year per Mayor Marty Walsh’s housing plan. We won a major victory toward this goal when Mayor Walsh increased the City’s Inclusionary Development Program’s fees. MACDC is also advocating for an increase in the City’s linkage fees. Finally, and most importantly, MACDC is working with a broad coalition of community groups to explore whether to pursue the Community Preservation Act in Boston in 2016 – a program that could generate nearly $20 million per year in new funding for community housing, historic preservation, open space preservation, and outdoor recreation.
To be sure, this is an extensive set of goals, but the needs within our communities are significant. Many families pay 30% or more of their income for housing. Massachusetts currently spends less than 2 percent of its combined operating and capital budget on housing. This simply is not getting the job done. And given the growing evidence that quality, affordable housing leads to significantly better health and education outcomes, investing in housing is money well spent.