Patrick Administration Announces Expansion Of Housing Development Incentive Program To Support Housing In Gateway Cities

BOSTON – August 18, 2014 – (RealEstateRama) — Housing and Economic Development Secretary Greg Bialecki today announced the start of the application process for state tax credits for developers with qualifying proposals for larger market rate housing projects in Gateway cities. The Massachusetts Department of Housing and Community Development (DHCD) will grant waivers to otherwise qualifying projects that exceed the current regulatory limit of 50 market rate units per project under the Housing Development Incentive Program (HDIP).

“An Act To Promote Economic Growth in the Commonwealth,” signed by Governor Patrick on Wednesday provided for a major expansion of the HDIP Program. The new law doubles the size of the annual tax credit pool from $5 million to $10 million over the next four years, and allows larger developments to qualify by eliminating the 50-market-rate unit per project cap. While DHCD is going through the formal process of amending its regulations to conform to the new law, it will grant waivers to otherwise qualifying projects that exceed 50 market rate units.

“Housing is one of the cornerstones of a growing economy,” said Housing and Economic Development Secretary Greg Bialecki. “Expanding this program is part of our overall strategy to accelerate housing development and transform these communities into great places to live, work, and play.”

“Governor Patrick and this Administration have made a historic commitment to expanding housing across the Commonwealth,” said Housing and Community Development Undersecretary Aaron Gornstein. “We are pleased to work with the Legislature to expand this program which will allowing us to continue partnering with local developers and gateway communities creating new housing resources for all incomes.”

The economic development package builds upon on the Patrick Administration’s successful economic development strategy of investing in education, innovation and infrastructure. The law provides new tools and training to ensure the Massachusetts workforce meets the needs of employers, invests in our Gateway Cities to promote development across the entire state and provides incentives to create jobs and stimulate the economy .

HDIP is designed to help gateway cities – smaller Massachusetts cities with an industrial heritage that meet certain requirements – redevelop existing buildings into new, market-rate residential developments. HDIP provides developers with a tax credit that is worth up to 10 percent of the qualified development expenses for a project that meets the program requirements. Participating cities match this support with property tax relief to enhance the project’s viability.

Gateway Cities interested in participating in the program must submit a zone plan to DHCD for approval, execute a real estate tax exemption agreement with any developer undertaking a project and promote residential and economic development in the target area. After a zone plan has been submitted and approved, a developer must work with the city to submit a proposed project for certification, demonstrating that the project meets HDIP program requirements and that a real estate tax exemption agreement has been reached. There are 26 gateway cities in the Commonwealth.

In November 2012, Governor Patrick announced the Commonwealth’s goal of creating 10,000 multi-family housing units per year. By creating this type of housing, which is attractive to young families and individuals, Massachusetts is better prepared to retain the skilled, young workforce which employers are seeking.

Last fall, Housing and Economic Development Secretary Greg Bialecki accepted a national “Workforce Housing” award from the Urban Land Institute, recognizing the Patrick Administration’s leadership in pursuing a strategy to increase the supply of housing needed, and in the places needed, for its workforce.

For more information on the HDIP program, please visit http://tinyurl.com/housingthatworks. The HDIP program is administered by DHCD and interested developers or cities should contact Miryam Bobadilla, Technical Assistance Officer with DHCD’s Office of Sustainable Communities at 617-573-1356 or at Miryam.Bobadilla (at) state.ma (dot) us.

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