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Mass. House Proposes $6.2B Housing Bill, Scraps Real Estate Transfer Fee

Massachusetts lawmakers on Monday presented a new version of Gov. Maura Healey's ambitious housing bond bill that would have the state borrow $2B more than her initial proposal.

The $6.2B bill, filed in the Massachusetts House of Representatives, represents the state's largest legislative effort ever aimed at spurring new housing development. The bill also removed a proposal backed by Healey and Boston Mayor Michelle Wu that would allow localities to impose a real estate transfer fee, The Boston Globe reported.

The Massachusetts State House

“It’s ridiculous to think that you’re going to solve this with one bond issue. I think it’s a beginning of a process,” House Speaker Ron Mariano said on Monday, according to the Globe.

The new bill includes a zoning amendment that would allow accessory dwelling units by right in all neighborhoods zoned for single-family development in the state. The units would be allowed up to 900 SF, and Healey's administration estimates it could create more than 8,000 units.

It would also include $1B to expand the Massachusetts Water Resource Authority's system to Ipswich River Basin and the South Shore. This expansion could pave the way for 6,000 new homes in the area. 

Additionally, a $150M program in the bill would spur commercial-to-residential conversions and offer tax credits to alleviate development costs for those projects. The bill also calls for $2B — $500M more than Healey proposed — toward repair, rehabilitation and modernization of the state's 43,000 public housing units. 

The real estate transfer fee in Healey's initial bill was removed from the House's version. Her proposal would have allowed cities and towns to enact a 2% tax on real estate sales of more than $1M. The hike was designed to fund new affordable housing efforts, but it garnered pushback from development and business advocates, who argued the fee would raise housing costs.

Last month, the Greater Boston Real Estate Board took aim at Healey's transfer fee proposal, The Boston Globe reported. The real estate group announced it would embark on a “multifaceted digital and grassroots activation campaign” urging lawmakers to reject the plan. 

“We are thrilled to see the House’s version of the Bond Bill include provisions such as ADUs and remove harmful and ineffective policies like transfer taxes,” GBREB CEO Greg Vasil said in a statement Monday. “Massachusetts should focus on producing the hundreds of thousands of homes needed to meet demand, while keeping the state attractive to current and prospective businesses.”

Healey proposed her $4B Affordable Homes Act bond bill in October. The bill was commended by several leaders in the commercial real estate community because of its mix of initiatives and incentives that would bring more housing options to the state.

State officials have been pushing to find new housing solutions as high costs and lack of supply have threatened Massachusetts' competitiveness. The state was among the seven with the most net out-migration last year, according to United Van Lines.