With Massachusetts home prices continuing to soar, the housing crisis has begun to sound like the old Mark Twain saw about the weather: Everybody talks about it, but nobody does anything.
Hoping to match deeds to words, the Romney administration and an independent task force of housing, business, and academic leaders are pushing separate plans for enticing communities to accept both more modest-priced housing and “smart growth” alternatives to land-gobbling sprawl. Whether either plan can pass muster, fiscally or politically, remains very much an open question.
The more ambitious of the two schemes was unveiled in November by an ad hoc group of leaders from business, labor, and housing organizations. The Commonwealth Housing Task Force proposed a rich set of incentives to coax communities into approving “zoning overlay districts” that would allow dense development near town centers and public transit stations, reserving 20 percent of units in larger-scale projects for low- and moderate-income residents.
The plan proposes to pay communities an upfront “bonus” of $2,000 for each apartment and $3,000 for each single-family home allowed under new overlay district zoning. What’s more, responding to the single biggest complaint from suburban officials about new housing, the task force calls for the state to underwrite 100 percent of the school costs of children living in any new housing unit built in the designated area.
The task force report projects that 33,000 new housing units could be built in overlay districts over 10 years if the incentives are approved by the Legislature. The task force also calls for a near doubling of state housing program funds to help pay for the affordable units, and also recommends that communities that approve overlay districts receive priority in state spending on roads, parks, sewers, and other improvements.
Barry Bluestone, a Northeastern University economist and co-author of the task force report, concedes that many previous housing studies–including some he has been involved with–have come up short on solutions to the region’s housing shortage. “This is the first one that explicitly tries to put in place concrete proposals about what to do about it,” says Bluestone.
Concrete or not, the proposals still have to be paid for. “I don’t know where the money is going to come from,” says state Sen. Harriette Chandler, a Worcester Democrat and co-chairman of the Legislature’s Housing Committee.
The total price tag of the plan is roughly $1 billion over 10 years, but the task force claims that $300 million of that cost will be offset by additional income and sales taxes associated with the new construction, along with job growth made possible once high housing costs no longer impede business expansion. The report suggests that the sale of surplus state-owned property could generate a further $400 million for the housing plan.
These assumptions have prompted even one of the state’s leading affordable housing advocates to question the plan’s realism. “This is a plan without revenue,” says Tom Callahan, executive director of the Massachusetts Affordable Housing Alliance. He’s particularly skeptical of counting on economic spinoffs to finance housing development. “None of those ways [of funding programs] have been accepted by the Legislature in the 20 years I’ve been working on housing issues,” he says.
Callahan also chafes at the notion of funneling state funds to wealthy suburbs that have, until now, resisted the call to build more affordable housing. “All of a sudden they get religion on the issue and you’re going to give [them] cash bonuses?” he says.
Doug Foy, the Romney administration’s development czar, welcomes the task force’s call for town-center and transit-oriented density, but he’s also dubious about its dollars-and-cents assumptions, especially regarding surplus state lands. “The notion that you’re going to be able to liquidate those lands and turn such gains into giant cash bonuses is, I think, just unrealistic,” says Foy. “Virtually every town is hoping they’re going to be turned into parkland or a wildlife refuge.”
At the same time, Foy suggests that the plan’s costly school-cost subsidy may be unnecessary. “In many cases, it appears, it’s a myth” that the kids brought to town by new housing bust local budgets, says Foy. According to a draft analysis by the Executive Office of Administration and Finance obtained by CommonWealth, the incremental revenue coming to communities from single-family homes built in 2000 actually exceeded, on average, incremental school costs by $1,592 per house. Of the 215 communities studied, 170 gained more revenue than they needed to cover additional school costs, while 45 municipalities were net losers on the housing deal.
But Foy’s view that school costs are no reason for localities to resist moderate-priced housing may be tinged with wishful thinking as well. The net gain that towns enjoyed from new housing may well be the result of the very practices the state hopes to end: restrictive zoning that limits construction to expensive, super-sized homes on large lots. For dense development of modest-priced, family housing –more kids, lower valuations–the fiscal equation may not be so favorable.
Still, Foy thinks that housing development can be boosted and directed toward town centers and transit stops without a huge infusion of state funding. Foy’s office is working on a plan that would earmark a portion of the state’s annual $1.2 billion in capital spending–perhaps 10 percent –to be awarded on a priority basis to communities that agree to smart-growth housing and development goals.
“If there was more money in the hopper for us to use, it would be that much easier,” says Foy. But “I’m convinced we can get all or at least a bit of what the task force is calling for using existing tools.”
This, too, is a variant on a familiar theme. Efforts by the Cellucci administration as well as a bid last year by Romney to have a portion of local aid to cities and towns earmarked to reward communities that permit new housing construction have all been shot down by lawmakers.
State Rep. Kevin Honan, co-chairman of the Housing Committee, likens the challenge of solving the state’s housing crisis to the education reform effort of a decade ago, which made school funding the state’s budget priority for seven years. “The business community played a major role in that, so I am delighted to see the business community coming to the table on housing,” says Honan, citing the participation of leaders from area banks and the Greater Boston Chamber of Commerce in the Commonwealth Housing Task Force. But if solving the housing crisis means big bucks for municipal incentives, the Brighton Democrat predicts “an uphill battle.”