The Senate budget debate next week could determine how competitive gateway cities will be in the post-pandemic economy. At a key time when investments in housing and transportation could help make these communities more attractive in the age of remote working, the danger of missing the opening and falling behind is real.
Housing: Housing construction incentive program
MassINC and economic development leaders have been slamming for years that gateway cities are ready and able to build much of the housing supply our state needs to stabilize prices. However, the only tool designed to unlock this investment is the Housing Development Incentive Program (HDIP), which is woefully underfunded and has a six-year backlog.
Senator Eric Lesser tabled amendments #212 and #213 to solve the problem. The first would triple the program’s annual cap from $10 million to $30 million, which Governor Baker has already proposed in his economic development bill. It would also increase the per-project limit from $2 million to $3 million to account for increased costs since the program’s inception. Lesser’s Second Amendment would allocate $57 million in operating funds to address the existing backlog of HDIP projects awaiting construction.
Gateway City lawmakers made a valiant effort to pass similar amendments during the House budget debate, but unfortunately they did not prevail. This may be because the House intends to follow Governor Baker’s lead and address the issue in the economic development bill. However, the budget is a more favorable vector as it would increase the cap for FY23, whereas the changes in the Economic Development Bill would not take effect until FY24.
Full funding of the HDIP backlog would inject more than $700 million in investment into projects in Gateway Cities before even considering permanent jobs, residents and the positive impact on local businesses. MassINC estimates that tripling the program on an ongoing basis would generate more than 10,000 housing units and nearly $4 billion in private investment over 10 years.
Transportation: regional transit
Governor Baker’s budget level funds the Regional Transportation Authority (RTA) at $94 million, which in this inflationary environment means a significant cut. The problem is exacerbated when factoring in the driver shortage that has already forced service cuts at many agencies. The RTA Advocacy Coalition (RTAAC) recommended provide at least $7 million in additional base funding to offset the effects of inflation and provide the hiring incentives and workforce training necessary to provide full service.
Unfortunately, the House Ways and Means budget reflected the Governor’s proposal. And although more than half the House signed amendments to improve the results, they did not make it into the final House budget.
That means it’s up to the Senate to avoid a precarious situation for gateway cities, where bus ridership has remained strong due to essential workers and households relying on public transit. Senate Budget Amendments #885 and #886 tabled by Senator Harriette Chandler would increase funding for FSAs in the FY23 Senate Budget to $104 million to support service, address driver shortages and allow FSAs to continue to engage in projects pilots who make the service more affordable for passengers.
Additionally, the amendment #857 by Senator Adam Hinds would respond to a recommendation in the 2019 ATR Performance and Funding Report to create a dedicated revenue stream for ATRs by taking a portion of the proceeds from corporate excise taxes – this is perhaps be the ultimate solution to this annual dance.