Massachusetts Housing Policy: 2023 in Review and 2024 Preview
Introduction
2023 has been an eventful year for housing policy in Massachusetts. Against the backdrop of the worst housing supply crisis in the state’s history, the dominant story over the past 12 months has been the ongoing progress and debate around the implementation of 2021’s MBTA Communities zoning reform. In the backdrop, a number of other proposals, including rent control, failed to gain sufficient traction with voters or the legislature to be adopted into law. Finally, in the last few months of the year, attention has shifted towards Governor Healey’s expansive Affordable Homes Act, which attempts to direct even more resources towards the housing sector while making some additional tweaks to existing housing policy.
MBTA Communities Zoning Reform
The MBTA Communities zoning reform (MBTAC) was the Baker administration’s ambitious law geared towards spurring transit-oriented housing development in the 177 cities and towns1 served by or abutting MBTA service. Instead of mandating new construction or providing subsidies/other incentives for housing creation, MBTAC requires municipalities to establish zoning districts, near transit if applicable, in which dense multifamily residential development is permitted by right2.
The logic behind this approach is simple and elegant. The primary reason for Greater Boston’s housing affordability crisis is the mismatch between demand for housing and its supply. Demand to live here has increased rapidly over the past few decades, but local laws prohibiting most dense, affordable housing typologies have prevented supply from keeping pace. Developers would love to build more housing, as it would be profitable given current market prices, but are blocked from doing so by zoning and other land use regulations that add cost, time, and uncertainty to this process. Once implemented, MBTAC will constitute a major step towards closing this gap by removing many of these barriers. Moreover, it will do so without the need for new government taxes or spending to spur this growth; with the regulatory barriers removed, the private sector will be sufficiently incentivized to do so on its own.
While MBTAC was passed in 2021, the rezonings it mandates are spread out across a longer time period depending on the characteristics of the municipality in question. Rapid transit communities, i.e. those served by the Blue, Green, Orange, Red, or Silver lines, must rezone by the end of 2023. Communities served by the Commuter Rail and adjacent communities of sufficient density must rezone by the end of 2024, and adjacent “small towns”, i.e. lower-density municipalities, must rezone by the end of 2025.
Municipalities have considerable discretion regarding the exact details of their rezoning, and enthusiasm has varied widely across them. Lexington not only completed its rezoning over 18 months before its December 2024 deadline, it also upzoned nearly three times as many acres as were required. Milton completed its rezoning within weeks of its December 2023 deadline, but only after fighting to reclassify itself as a Commuter Rail community rather than a rapid transit community. And Holden has refused to comply with the law, prompting a legal battle.
Other Policy Proposals
While much of the state’s attention will remain on the rollout of MBTAC over the coming years, other policies like rent control and the YIMBY Act have occupied a considerable amount of the discourse over the past year and will likely continue to be discussed going forward.
Despite their support from some politicians and activist groups, none of the various rent control policies proposed this year gained sufficient traction to succeed. The legislature saw Boston’s rent control home rule petition and multiple more general bills that would have enabled municipalities to implement their own rent control policies, but, with little enthusiasm from either legislative leadership or the governor’s office, none of these proposals succeeded. Similarly, state rep Mike Connolly’s ballot initiative for a local rent control option failed to gain enough signatures, and the campaign behind it was suspended in November. This is fortunate given that rent control would work counter to the goal of increasing Greater Boston’s housing supply and cause a host of other problems, but it’s likely that it will continue to be discussed over the coming years.
Another prominent policy proposal that has yet to be implemented is the YIMBY Act. The YIMBY Act would build on the progress made by MBTAC via a number of reforms, including:
Further increasing multifamily zoning and removing parking mandates near transit
Legalizing accessory dwelling units (ADUs) by right statewide
Facilitating the conversion of vacant land and commercial buildings into multifamily housing
Circumscribing the ability of municipalities to limit housing development via inclusionary zoning requirements or septic regulations
Supported by Abundant Housing Massachusetts, SPOA, and a wide variety of other groups, the YIMBY Act is well-tailored to addressing the need to expand the state’s housing supply while minimizing negative environmental and traffic externalities and not requiring additional government spending. Nevertheless, some legislators have expressed skepticism that suburban constituents are ready for another ambitious reform when MBTAC is still in the process of being implemented, so it may require a few more years before the YIMBY Act gains sufficient support to pass.
Affordable Homes Act
In 2024, it’s likely that Governor Healey’s proposed Affordable Homes Act will be the focus of housing politics, and perhaps of politics more broadly. Healey and her lieutenant governor, Kim Driscoll, who is known for her YIMBY advocacy as mayor of Salem, have made it clear that a supply-oriented approach to the housing crisis is a key pillar of their overall policy platform, and they have put forward the AHA as an attempt at a comprehensive approach to this issue.
The AHA is a sprawling piece of legislation, consisting of over 37,000 words across 115 sections. Its greatest strength is that most of its provisions seek to solve the housing affordability crisis by increasing the supply of housing rather than via price controls; its greatest weaknesses are that it includes supply-suppressing provisions like transfer taxes and that its primary method for spurring housing production is spending rather than zoning reform.
Instead of diving into the specifics of each subcomponent of the $4B in spending the bill would authorize, I want to focus on my broader objections to this element of the bill’s approach. The goal of the bill is to make housing more affordable, but the cost of housing is only one component of the total cost of living, which includes spending on healthcare, education, transportation, food, and other categories, but also, most importantly in this context, taxes. Spending $4B on housing production and maintenance will decrease the average cost of housing, but at the expense of a higher tax burden for Massachusetts residents. Whether a given household comes out ahead or behind on net after this change would depend on the specific characteristics of that household, e.g. whether they rent or own, whether they qualify for subsidized housing, and their share of the overall tax burden in the state, but the main takeaway here is that diverting money from other spending categories into housing does not clearly result in a net improvement for the state as a whole.
The best provision of the AHA is its statewide legalization of ADUs by right, which it shares with the YIMBY Act. This is much more clearly a positive-sum way to spur housing production, as it requires no public spending and gives property owners the flexibility to build new units as they see fit. The AHA’s worst provisions are its enablement of eviction sealing procedures, which would harm landlords and responsible tenants alike, and its implementation of a transfer tax, which would suppress new housing construction, running counter to the bill’s goals.
Overall, the AHA is a mixed piece of legislation. Its combination of a variety of different policies of varying levels of quality may be a necessary evil to win support with the legislature, and it’s certainly preferable to policies like rent control that are more straightforwardly destructive. Nevertheless, more purely reform-oriented bills like MBTAC and the YIMBY Act are a much better model for making Massachusetts more prosperous and affordable.
by Chris Lehman
