MassHousing and the state's Department of Housing and Community Development (DHCD) are working toward financing smaller multifamily housing developments, in an effort to increase affordable rental opportunities in more of the Commonwealth's cities and towns.
At the February meeting, MassHousing’s Board of Directors approved participation in the Community Scale Housing Initiative (CSHI) to support the development of affordable rental units at a scale appropriate to smaller communities, in terms of population, geographic size, land availability and local architecture.
MassHousing has committed $5 million to the CSHI through its Opportunity Fund, and the DHCD will contribute $5 million through its Housing Stabilization Fund.
"Increasing the production of quality affordable rental housing is a priority for MassHousing, and the Baker-Polito Administration," said MassHousing Executive Director Tim Sullivan. "This program will help more communities in Massachusetts build housing that fits their particular plans, strategies and needs."
Increasing housing production—both affordable and market-rate—remains a significant challenge in Massachusetts. Consider
- Housing supply is well below demand; without adding any new jobs or residents, Massachusetts is 44,000 units short of its housing needs.
- Permitting of new housing construction is at its lowest level in decades.
- The bulk of production is taking place in a handful of communities: more than half of multifamily units permitted in 2015 were located in just five cities and towns.
- Over the past decade, 207 of the Commonwealth’s 351 cities and towns have not permitted any housing developments with more than five units.
Community-scale housing developments consist of five to 20 units, smaller than what MassHousing has traditionally financed but in line with what are more commonly permitted by cities and towns. These developments are more likely to be located near jobs, schools and transportation and tend to contain more family-sized units than larger multifamily projects. Community-scale projects are no more expensive to build on a per-unit basis, and they require less state subsidy.
CSHI funds will be available to new rental developments with 20 units or less where at least 20% of the units are affordable to families earning no more than 80% of the area median income. Developments may be located in cities and towns across Massachusetts, outside of the city of Boston.
"Community scale projects are incredibly valuable in urban, rural and suburban communities, but are currently difficult to finance in an affordable housing system oriented around the Low Income Housing Tax Credit," said Joseph Kriesberg, president of the Massachusetts Association of Community Development Corporations. "Tax credit deals typically require 20 or more units, and securing the resources necessary for these smaller projects is difficult, even with their reasonable development costs. The MassHousing Community Scale program is a smart way to overcome these challenges, so we can build cost effective homes that fit nicely into the existing neighborhood context and market. MACDC thanks MassHousing, the Department of Housing and Community Development, and the Baker Administration for their creative approach to this challenge, and for their response to the need for such a program that has been expressed by MACDC and others."