Affordable Housing - The Issue

In the third quarter of 2000, the U.S. homeownership rate rose to a record high of 67.7 percent, an unprecedented level that reflects 71.6 million American families who now own their own home. But, despite record home buying levels both nationally and in Massachusetts in recent years, it is becoming increasingly difficult for low- and moderate-income households to attain the American Dream.

In Massachusetts, home values have been rising steadily for the past seven years and have increased an astonishing 342 percent since 1980, the largest gain of any state in the country. In addition, the repeal of rent control along with a lack of any significant new construction of multifamily properties has led to a sharp increase in rent prices, making Massachusetts one of the top five most expensive states in which to live as we enter a new century.

With intense efforts now underway across the state to protect open space, many communities are turning to land use controls to slow development, but this merely adds to land and construction costs, thus threatening to drive housing prices higher.

The Law

In 1969, the Commonwealth enacted its anti-snob zoning law, also known as the Massachusetts Low and Moderate Income Housing Act. The Act was adopted to off-set the effects of “exclusionary zoning” regulations, such as minimum lot size or setback requirements, maximum height and floor area ratio requirements and off-street parking provisions, that make it difficult to create low- and moderate-cost housing.

Essentially, it’s aim is to expedite the permit process for the development of affordable housing by allowing builders to bypass the local permit process when less than 10 percent of the housing units in a community are available for low- and moderate-income households. In communities where this threshold has not been met, developers of state and federally subsidized housing projects may apply directly to the state level and the Zoning Board of Appeals and Conservation Commission for permitting approval.

What Realtors® Need to Know

As an important step toward homeownership, we recognize that affordable rental housing is an important component to the overall housing supply. The REALTOR association supports government efforts that encourage the production of new rental units and the recovery and rehabilitation of subsidized housing units as necessary to improving the state’s inventory of low- to moderate-income housing stock.

Additionally, abandoned and unutilized city-owned residential and commercial property should be identified and developed as a means of further increasing the housing supply. Comprehensive land use planning, including incentives that would encourage communities to update or develop master plans, is another essential component to ensuring a sufficient supply, not to mention future development of housing for the less affluent.

The creation of more clustered, mixed-income housing developments and the adoption of inclusionary zoning rules that provide for density bonuses and require a percentage of all new developments to be affordable to lower-income families also needs to be pursued.

Finally, we strongly support funding authorizations to continue the availability of low-interest home loans provided by the Massachusetts Housing Finance Agency and Federal Housing Administration, as well as financing provided by the secondary mortgage market (i.e. Fannie Mae and Freddie Mac).

For first-time homebuyers and other low-to-moderate income buyers these public and private entities are an important source of affordable home financing, offering below-market rate loans and mortgage products that carry more flexible terms and income qualification guidelines than conventional lenders.

• Many communities in Massachusetts have started to use land use controls to slow development, but, in many instances, these policies are only driving housing prices higher.
  
• Affordable rental housing is an important component to the housing supply and we support efforts that encourage the production of new rental units and rehabilitation of subsidized housing.
  
• Master planning, the creation of more clustered mixed-income housing, and inclusionary zoning rules that provide for density bonuses and require a percentage of all units to be affordable, must be pursued.
  
• We support the continuation of funding authorization for the availability of low-interest home loans and financing provided by the secondary mortgage market.