We need to build more housing

Proposed incentives and zoning changes are good first steps

REAL ESTATE AGENTS always say it’s a good time to buy. And with the improving economy and low mortgage rates, young couples seeking to buy their first home, growing families looking to trade up, and downsizing baby boomers wanting to stay near their children are entering the market. But these eager buyers are quickly confronting a stark reality: Housing is extremely expensive in Massachusetts and becoming more so.

The reason for the housing crisis in Massachusetts is that too many people are chasing too few units. No matter how many current homeowners put their houses on the market, there simply is not enough housing to meet demand, moderate prices, or close the affordability gap.  Massachusetts needs policies that encourage new home construction of all types that persons and families of all incomes can afford.

Condos under construction on Washington Street in Dorchester.

Given the many luxury condo and apartment towers rising up in Boston, it may be surprising to learn that new home construction in the Commonwealth is near an all-time low, especially for single-family homes. But even in boom times Massachusetts has historically lagged behind the rest of the country in meeting housing demand. This perpetual housing shortage is the result of the housing policies practiced by many communities, especially in eastern Massachusetts.

Because of their “home rule” authority, each of our 351 cities and towns has its own local zoning and land use regulations. Many towns have thwarted new housing production for years by adopting large lot zoning requirements, enacting moratoriums on the issuance of building permits, and approving local wetlands and septic system regulations that exceed already stringent state standards. Others restrict multi-family housing to people older than 55 or limit the number of available bedrooms, or prohibit multi-family housing altogether. They do so in an attempt to keep out school-age children, believing they represent a net tax revenue loss, despite the many studies demonstrating otherwise.

Wading into this decades-long conflict between municipal officials who are resistant to growth and homebuilders trying to meet market demand is the Massachusetts Smart Growth Alliance with its bill to rewrite the state’s zoning and subdivision laws. Andre Leroux, the alliance’s executive director, and former Fitchburg mayor Lisa Wong recently laid out their argument in CommonWealth. Despite the alliance’s good intentions, and the fact that we share their goal of creating more housing, it is our belief that the legislation would not result in more housing choices, sustainable communities, or prompt, predictable permitting. Rather, it will largely strengthen “home rule” by giving communities more power to engage in practices that stifle production and drive home prices beyond the reach of average families.

For example, the legislation would severely limit the protections approved subdivisions currently receive from possible future zoning changes, thereby increasing the risk and cost of development. It would authorize mandatory inclusionary zoning, whereby a developer would be forced to set aside a percentage of units in a housing development for persons of low and moderate income, without any offsetting “density bonus.” The ability to create additional market rate units that would otherwise not be allowed is what makes it economically feasible for a developer to provide some affordable units.

And the legislation would grant municipalities the power to impose a broad array of new impact fees on development. It would do so while still allowing municipalities to continue their practice of imposing arbitrary and ad hoc mitigation requirements––a practice that hinders and burdens the financing and affordability of housing.

Even if one believed the Massachusetts Smart Growth Alliance’s contention that its bill would advance housing – notwithstanding the fact that the professionals who finance, build, and sell homes vigorously disagree – the legislation has almost no chance of becoming law. That is because it contains a number of provisions that are “poison pills” to both the Massachusetts Municipal Association and the real estate development industry. Municipal officials are staunchly opposed to any mandate to zone for multi-family housing or allow accessory dwelling units as a matter of right. Homebuilders and developers are fiercely protective of their ability to develop lots on existing streets without the need for approval from a local planning board. That is the reason why, in addition to its complexity and potential for upending more than 40 years of case law interpreting the current Zoning Act, similar zoning reform proposals have repeatedly failed to advance in the Legislature.

With its Housing Choice Initiative, the Baker-Polito administration has put forward a better and more realistic approach to the issue, one that incorporates ideas and suggestions from legislators, municipal officials, and housing experts. By creating a new program of incentives and rewards for municipalities that deliver sustainable housing growth, Gov. Baker has avoided the pitfall of trying to impose a new mandate on cities and towns. In that way, it is like the successful Green Communities Program begun under Gov. Patrick that encourages cities and towns to take steps to reduce energy use so that the state can meet its greenhouse gas emissions targets.

As a complement to its Housing Choice Initiative, the governor has filed a bill to make modest changes to the state zoning act to make it easier for municipalities to rezone for responsible housing growth. His legislation wisely eschews the kind of wholesale zoning reform that invites opposition from nearly all quarters.

The Housing Choice Initiative once again demonstrates the Baker-Polito administration’s belief in the importance of partnership between the state and its cities and towns. It recognizes that local governments are going to need millions of dollars in incentives, grants, and technical assistance if Massachusetts is to realize the governor’s goal of 135,000 new units of housing by 2025. It also challenges communities to be innovative and collaborative in making local decisions that will expand housing opportunities for their residents and all the citizens of the Commonwealth.

New incentives and the passage of the governor’s legislation alone will not be enough to solve the state’s housing affordability problem. But together with approval in the coming weeks of the housing bond bill put forward by Rep. Kevin Honan and Sen. Joseph Boncore, and the start of the long-awaited implementation by the Department of Housing and Community Development of the Chapter 40R Starter Home Program, Massachusetts can make substantial progress toward that end this year.

Meet the Author

Gary Campbell

Guest Contributor, Home Builders & Remodelers Assoc. of Mass.
Gary Campbell is the chief executive officer of Gilbert Campbell Real Estate and president of the Home Builders and Remodelers Association of Massachusetts.