Filing Letter

April 24, 2017

To the Honorable Senate and House of Representatives:

I am pleased to submit for your consideration “An Act Financing the Production and Preservation of Housing for Low and Moderate Income Residents.”  Last May, our administration released a five-year capital budget plan that included a $1.1 billion commitment to affordable housing production and preservation, and to state-aided public housing.  This legislation is a vital step in implementing that plan, which represents an 18% increase over Fiscal Year 2016 capital funding levels.

Affordable housing is a prerequisite to building a compassionate, inclusive and more prosperous Commonwealth.  We need to not only maintain and improve our existing public and affordable housing stock, but also foster the development of new affordable housing, particularly in our Gateway Cities.

In 2013, the Commonwealth enacted a $1.4 billion housing bond bill to fund programs to rehabilitate and modernize public housing and support affordable housing opportunities for our residents.  Just under $259 million of housing-related capital authorization from the 2013 legislation remains uncommitted.  This legislation provides an additional $1.287 billion in additional capital authorization, creating more than $1.5 billion in combined capacity to support affordable housing over the coming years.  These new capital authorizations are spread over ten areas:

  • $600 million in new capital authorization to make capital improvements across the over 45,000 units of state-aided public housing
  • $240 million in new capital authorization for a total of $345 million for the Affordable Housing Trust Fund to support private affordable housing development
  • $127 million in new capital authorization for a total of $150.5 million for the Housing Stabilization and Investment Trust Fund to support preservation, new construction and rehabilitation projects
  • $100 million in new capital authorization for the Housing Innovations Trust Fund to support innovative and alternative forms of rental housing for residents who need extensive support services
  • $60 million in new capital authorization for the Facilities Consolidation Fund to provide financing for community-based housing in rental developments for clients of the Departments of Developmental Services and Mental Health
  • $50 million in new capital authorization for the Public Housing Demonstration Program to encourage housing authorities to pursue innovative, market-driven strategies and leverage private resources
  • $38 million in new capital authorization for a total of $99.5 million for the Capital Improvement and Preservation Trust Fund to help preserve affordable housing for which affordability restrictions would otherwise expire
  • $38 million in new capital authorization for community based housing for people with disabilities
  • $22 million in new capital authorization for a total of $57.5 million for the Home Modification Loan Program to provide loans to make access and safety modifications to the homes of persons with disabilities
  • $12 million in new capital authorization for a total of $45 million for supporting development that creates residential units and mixed used developments in neighborhood commercial areas

In addition to providing capital authorization for these vital programs, this legislation also allows for continued use of the Housing Development Incentive Program and Low-Income Housing Tax Credit at current levels for additional five-year periods rather than cutting these programs in half in 2019 and 2020 respectively.   These programs are integral to promoting market-rate housing development in Gateway Cities and affordable housing development across the Commonwealth.

Finally, this legislation reforms and updates a number of provisions governing local housing authorities.  Three highlights of these reforms are:

  • By streamlining procurement laws and public bidding requirements, we can reduce unnecessary bureaucracy and promote public-private partnerships that leverage our capital expenditures with additional investment from the private sector.  
  • By authorizing local housing authorities to retain the proceeds from the sale or long term lease of public housing property and use those proceeds to build, maintain or preserve public housing, we can incentivize those authorities to pursue private investment to supplement public funds
  • By allowing local housing authorities to borrow against their funding streams, we can reduce maintenance backlogs while lowering development costs

This housing bond bill will help strengthen our communities through the preservation and creation of affordable housing.  I urge your prompt enactment of this legislation.

Finally, in accordance with Section 3 of Article LXII of the Amendments to the Constitution, the bill includes my recommendation for the terms of the bonds to be issued thereunder to raise funds for the capital authorizations set forth in the bill.  Specifically, the term of bonds issued pursuant to Section 2 of the bill shall be issued for a maximum term of years not exceeding 30 years.

Sincerely,

Charles D. Baker
Governor

Bill Text

AN ACT FINANCING THE PRODUCTION AND PRESERVATION OF HOUSING FOR LOW AND MODERATE INCOME RESIDENTS

 

Whereas, the deferred operation of this act would tend to defeat its purpose, which is to authorize forthwith the financing of the production and preservation of housing for low and moderate income citizens of the commonwealth and to make related changes in certain laws, therefore it is hereby declared to be an emergency law, necessary for the immediate preservation of the public convenience.

 

 

Be it enacted by the Senate and House of Representatives in General Court assembled, and by the authority of the same, as follows:

SECTION 1. To provide for a capital outlay program to rehabilitate, produce and modernize state-aided public housing developments; to preserve the affordability and the income mix of state-assisted multifamily developments; to support home ownership and rental housing opportunities for low and moderate income citizens; to stem urban blight through the implementation of housing stabilization programs; to support housing production for the elderly, disabled and homeless; to preserve housing for the elderly, the homeless and low and moderate income citizens and people with disabilities; and to promote economic reinvestment through the funding of infrastructure improvements, the sums set forth in section 2, for the several purposes and subject to the conditions specified in this act, are hereby made available subject to the laws regulating the disbursement of public funds.

SECTION 2.

EXECUTIVE OFFICE OF HOUSING AND ECONOMIC DEVELOPMENT
Department of Housing and Community Development.

7004-0039. For a program of loans or grants to assist homeowners or tenants with a household member with blindness or severe disabilities in making modifications to their primary residence for the purpose of improved accessibility or to allow those individuals to live independently in the community or for construction costs to allow for the creation of an accessory unit, defined as an additional dwelling unit separate from the primary dwelling unit, for a person with disabilities or an elder needing assistance with activities of daily living; provided, that up to 10% shall be used for grants to assist landlords seeking to make modifications for a current or prospective tenant with disabilities, who but for this grant would be unable to maintain or secure permanent housing; provided further, that the secretary of health and human services shall take all steps necessary to minimize the program’s administrative costs; provided further, that the program shall be available pursuant to income eligibility standards approved by the secretary of health and human services; provided further, that the repayment of the loans may be delayed until the sale of the principal residence by the homeowner; provided further, that persons residing in a development covered by section 4 of chapter 151B of the General Laws shall not be eligible for the program unless the owner can show that the modification is an undue financial burden or that the landlord is participating in the grant program to maintain or secure housing for a tenant with disabilities; provided further, that the secretary of health and human services shall consult with the Massachusetts commission for the blind and the Massachusetts rehabilitation commission in developing the rules, regulations and guidelines for the program; provided further, that nothing in this item shall give rise to enforceable legal rights in any party or an enforceable entitlement to services; and provided further, that the secretary of health and human services shall submit quarterly reports to the house and senate committees on ways and means, the house and senate committees on bonding, capital expenditures and state assets and the joint committee on housing detailing the status of the program established in this item..........................................$22,000,000

 

7004-0040. For state financial assistance in the form of loans for the development of community-based housing or supportive housing for individuals with mental illness and individuals with intellectual disabilities; provided, that the loan program shall be administered by the department of housing and community development, referred to in this item as the department, through contracts with the Massachusetts Development Finance Agency established in chapter 23G of the General Laws, the Community Economic Development Assistance Corporation established in chapter 40H of the General Laws, operating agencies established pursuant to chapter 121B of the General Laws and the Massachusetts Housing Finance Agency established in chapter 708 of the acts of 1966; provided further, that those agencies may develop or finance community-based housing or supportive housing or may enter into subcontracts with nonprofit organizations, established pursuant to chapter 180 of the General Laws, or organizations in which such nonprofit corporations have a controlling financial or managerial interest or for-profit organizations; provided, however, that preference for the subcontracts shall be given to nonprofit organizations; provided further, that the department shall consider a balanced geographic plan for such community-based housing or supportive housing when issuing the loans; provided further, that the department shall consider development of a balanced range of housing models by prioritizing funds for integrated housing as defined by the appropriate housing and service agencies including, but not limited to, the department of housing and community development, the Massachusetts rehabilitation commission, the department of mental health and the department of developmental services, in consultation with relevant and interested clients, clients’ families, advocates and other parties as necessary; provided further, that loans issued pursuant to this item shall: (i) not exceed 50 per cent of the financing of the total development costs; (ii) be issued only when a contract or agreement for the use of the property for such housing provides for repayment to the commonwealth at the time of disposition of the property in an amount equal to the commonwealth’s proportional contribution from the Facilities Consolidation Fund to the cost of the development through payments made by the state agency making the contract; (iii) only be issued when a contract or agreement for the use of the property for the purposes of such housing provides for the recording of a deed restriction in the registry of deeds or the registry district of the land court of the county in which the real property is located, for the benefit of the departments, running with the land, that the land be used to provide community-based housing or supportive housing for eligible individuals as determined by the department of mental health and the department of developmental services; provided, however, that the property shall not be released from such restriction until the balance of the principal and interest for the loan has been repaid in full or until a mortgage foreclosure deed has been recorded; (iv) be issued for a term not to exceed 30 years, during which time repayment may be deferred by the loan issuing authority; provided, however, that if on the date the loans become due and payable to the commonwealth, an outstanding balance exists and if, on such date, the department, in consultation with the executive office of health and human services, determines that there still exists a need for such housing and that there is continued funding available for the provision of services to such development, the department may, by agreement with the owner of the development, extend the loans for such periods, each period not to exceed 10 years, as the department shall determine; provided further, that the project shall remain affordable housing for the duration of the loan term, including any extension thereof, as set forth in the contract or agreement entered into by the department; provided further, that in the event the terms of repayment detailed in this item would cause a project authorized by this item to become ineligible to receive federal funds which would otherwise assist in the development of that project, the department may waive the terms of repayment which would cause the project to become ineligible; and (v) have interest rates fixed at a rate, to be determined by the department, in consultation with the state treasurer; provided further, that the loans shall be provided only for projects conforming to this item; provided further, that the loans shall be issued in accordance with a facilities consolidation plan prepared by the secretary of health and human services, reviewed and approved by the department and filed with the secretary of administration and finance, the house and senate committees on ways and means, the house and senate committees on bonding, capital expenditures and state assets and the joint committee on housing; provided further, that no expenditure shall be made from this item without the prior approval of the secretary of administration and finance; provided further, that the department, the department of mental health and the Community Economic Development Assistance Corporation may identify appropriate financing mechanisms and guidelines for grants or loans from this item to promote private development to produce housing, to provide for independent integrated living opportunities, to write down building and operating costs and to serve households at or below 15 per cent of area median income for the benefit of department of mental health clients; provided further, that not more than $10,000,000 may be expended from this item for a pilot program of community-based housing or supportive housing loans to serve mentally ill homeless individuals in the current or former care of the department of mental health; provided further, that in implementing the pilot program, the department shall consider a balanced geographic plan when establishing community-based residences; provided further, that the housing services made available pursuant to such loans shall not be construed as a right or an entitlement for any individual or class of persons to the benefits of the pilot program; provided further, that eligibility for the pilot program shall be established by regulations promulgated by the department; and provided further, that the department shall promulgate regulations pursuant to chapter 30A of the General Laws for the implementation, administration and enforcement of this item, consistent with the facilities consolidation plan prepared by the secretary of health and human services and after consultation with the secretary and the commissioner of the division of capital asset management and maintenance.............................................................................................................................. $60,000,000

 

7004-0041. For state financial assistance in the form of loans for the development and redevelopment of community-based housing or supportive housing for persons with disabilities who are institutionalized or at risk of being institutionalized and who are not eligible for housing developed pursuant to item 7004-0040; provided, that the loan program shall be administered by the department of housing and community development, referred to in this item as the department, through contracts with the Massachusetts Development Finance Agency established in chapter 23G of the General Laws, the Community Economic Development Assistance Corporation established in chapter 40H of the General Laws, operating agencies established pursuant to chapter 121B of the General Laws and the Massachusetts Housing Finance Agency established in chapter 708 of the acts of 1966; provided further, that the agencies may develop or finance the community-based housing or supportive housing or may enter into subcontracts with nonprofit organizations established pursuant to chapter 180 of the General Laws or organizations in which such nonprofit corporations have a controlling financial or managerial interest or for-profit organizations; provided, however, that preference for such subcontracts shall be given to nonprofit organizations; provided further, that the department shall consider a balanced geographic plan for such community-based housing or supportive housing when issuing the loans; provided further, that all housing developed with these funds shall be integrated housing as defined by the appropriate state housing and service agencies including, but not limited to, the department, the executive office of health and human services and the Massachusetts rehabilitation commission in consultation with relevant and interested clients, clients’ families, advocates and other parties as necessary; provided further, that loans issued pursuant to this item shall: (i) not exceed 50 per cent of the financing of the total development costs; (ii) be issued only when a contract or agreement for the use of the property for the purposes of such housing provides for repayment to the commonwealth at the time of disposition of the property in an amount equal to the commonwealth’s proportional contribution from community based housing to the cost of the development through payments made by the state agency making the contract; (iii) only be issued when a contract or agreement for the use of the property for the purposes of such community-based housing or supportive housing provides for the recording of a deed restriction in the registry of deeds or the registry district of the land court of the county in which the real property is located, for the benefit of the departments, running with the land, that the land be used to provide community-based housing or supportive housing for eligible individuals as determined by the Massachusetts rehabilitation commission or other agency of the executive office of health and human services; provided, however, that the property shall not be released from such restrictions until the balance of the principal and interest for the loan has been repaid in full or until a mortgage foreclosure deed has been recorded; (iv) be issued for a term not to exceed 30 years during which time repayment may be deferred by the loan issuing authority; provided, however, that if on the date the loans become due and payable to the commonwealth, an outstanding balance exists and if, on that date, the department, in consultation with the executive office of health and human services, determines that there still exists a need for such housing, the department may, by agreement with the owner of the development, extend the loans for such periods, each period not to exceed 10 years, as the department shall determine; provided, however, that the project shall continue to remain affordable housing for the duration of the loan term, including any extensions thereof, as set forth in the contract or agreement entered into by the department; provided, however, that in the event the terms of repayment detailed in this item would cause a project authorized by this item to become ineligible to receive federal funds which would otherwise assist in the development of that project, that department may waive the terms of repayment which would cause the project to become ineligible; and (v) have interest rates fixed at a rate, to be determined by the department, in consultation with the state treasurer; provided further, the loans shall be provided only for projects conforming to this item; provided further, that the loans shall be issued in accordance with an enhancing community-based services plan prepared by the secretary of health and human services, in consultation with the department and filed with the secretary of administration and finance and the house and senate committees on ways and means, the house and senate committees on bonding, capital expenditures and state assets and the joint committee on housing; provided further, that no expenditure shall be made from this item without the prior approval of the secretary of administration and finance; and provided further, that the department shall promulgate regulations pursuant to chapter 30A of the General Laws for the implementation, administration and enforcement of this item, consistent with the enhancing community-based services plan prepared by the secretary of health and human services after consultation with the secretary and the commissioner of capital asset management and maintenance................................................................................ $38,000,000

 

7004-0042. For the capitalization of the Affordable Housing Trust Fund, established in section 2 of chapter 121D of the General Laws........................................................................................... $240,000,000

 

7004-0043. For the purpose of state financial assistance in the form of grants or loans for the Housing Stabilization and Investment Trust Fund established in section 2 of chapter 121F of the General Laws and awarded only pursuant to the criteria established in said section 2 of said chapter 121F; provided, that not less than 25 per cent shall be used to fund projects which preserve and produce housing for families and individuals with incomes of not more than 30 per cent of the area median income, as defined by the United States Department of Housing and Urban Development; provided further, that if the department of housing and community development has not spent the amount authorized under the bond cap for this program, at the end of each year following the effective date of this act, the department may award the remaining funds to projects that serve households earning more than 30 per cent of the area median income, as defined by the United States Department of Housing and Urban Development; provided further, that the department may expend an amount not to exceed $10,000,000 to stabilize and promote reinvestment, through homeownership, in areas the department has determined to be weak markets as indicated by a high concentration of assisted rental housing, a low rate of homeownership, low median family income, low average sales prices, high levels of unpaid property taxes or vacant or abandoned buildings, by waiving the requirements of this item and said chapter 121F, and by subsidizing the purchase price, borrowing costs or costs of renovation or new construction of 2 to 6 unit residential buildings for a person who shall own the property and occupy any portion of the property as the person’s primary residence for at least 5 years from the date of purchase; provided further, that if more than 5 years, but less than 10 years, from the date the owner takes ownership of the property, the owner sells any of the owner’s interest in the property, the new owner shall so occupy 1 unit in the property for a period equal to the difference between 10 years and the amount of time the first owner occupied the property as the owner’s primary residence; provided further, that if the owner fails to so occupy a unit on the property or ceases to be the owner of the property as required by this section, the department shall recoup the value of any subsidy provided to the owner; and provided further, that 10 years after the owner takes possession of the property pursuant to this item, all restrictions on the property created by this item shall be void........................................................................................................................................... $127,000,000

 

7004-0044. For the purpose of state financial assistance in the form of grants for projects undertaken pursuant to clause (j) of section 26 of chapter 121B of the General Laws; provided, that contracts entered into by the department of housing and community development for those projects may include, but shall not be limited to, projects providing for renovation, remodeling, reconstruction, redevelopment and hazardous material abatement, including asbestos and lead paint, and for compliance with state codes and laws and for adaptations necessary for compliance with the Americans with Disabilities Act, the provision of day care facilities, learning centers and teen service centers and the adaptation of units for families and persons with disabilities; provided further, that priority shall be given to projects undertaken for the purpose of compliance with state codes and laws or for other purposes related to the health and safety of residents; provided further, that funds may be expended from this item to make such modifications to congregate housing units as may be necessary to increase the occupancy rate of those units; provided further, that the department shall continue to fund a program to provide predictable funds to be used flexibly by housing authorities for capital improvements to extend the useful life of state-assisted public housing; and provided further, that not less than 25 per cent of the funds made available in this item shall be used to fund projects which preserve or produce housing for families and individuals with incomes of not more than 30 per cent of the area median income, as defined by the United States Department of Housing and Urban Development............................................................................................ $600,000,000

 

7004-0045. For the purpose of state financial assistance in the form of grants, administered by the department of housing and community development to demonstrate cost effective revitalization methods for state-aided family and elderly-disabled public housing that seek to reduce the need for future state modernization funding; provided, that housing authorities with state-aided housing developments pursuant to chapter 200 of the acts of 1948, chapter 667 of the acts of 1954, chapter 705 of the acts of 1966, chapter 689 of the acts of 1974 or chapter 167 of the acts of 1987 shall be eligible to participate in the program; provided further, that the department shall establish a 7-member advisory committee, to consist of the director of the department or a designee, 1 member selected by Citizens’ Housing and Planning Association, 1 member selected by the Massachusetts chapter of the National Association of Housing and Redevelopment Officials, 1 member selected by the Massachusetts Union of Public Housing Tenants and 3 additional members chosen by the department to provide advice and recommendations to the department regarding the program; provided further, that the department may exempt a recipient of grants from the requirements of chapter 7C of the General Laws and chapter 121B of the General Laws upon a showing by the recipient that such exemptions are necessary to accomplish the effective revitalization of public housing and will not adversely affect public housing residents or applicants of any income who are otherwise eligible; provided further, that the department may provide to recipients of grants such additional regulatory relief as is required to further the objectives of the program; provided further, that funds shall be made available for technical assistance provided by the Community Economic Development Assistance Corporation established in chapter 40H of the General Laws or the Massachusetts Housing Partnership Fund established pursuant to section 35 of chapter 405 of the acts of 1985 to recipients of grants and for evaluation; provided further, that the department’s regulations for the implementation, administration and enforcement of this item shall: (i) require that housing authorities selected demonstrate innovative and replicable solutions to the management, marketing or capital needs of state-aided family and elderly-disabled public housing developments and contribute to the continued viability of the housing as a resource for public housing eligible residents; (ii) encourage proposals that demonstrate regional collaborations among housing authorities; and (iii) encourage proposals that propose new affordable housing units on municipally-owned land, underutilized public housing sites or other land owned by the housing authority; and provided further, that the department shall report to the house and senate committees on ways and means, the house and senate committees on bonding, capital expenditures and state assets and the joint committee on housing on the progress of the program annually........................................................................................................................................$50,000,000

 

7004-0046. For the purpose of state financial assistance in the form of grants or loans for the Housing Innovations Trust Fund established in section 2 of chapter 121E of the General Laws; provided, that not less than 25 per cent of the funds made available in this item shall be used to fund projects which preserve and produce housing for families and individuals with incomes of not more than 30 per cent of the area median income, as defined by the United States Department of Housing and Urban Development............................................................................................................................. $100,000,000

 

7004-0047. For the purpose of state financial assistance in the form of grants or loans for the Capital Improvement and Preservation Trust Fund for expiring use properties established in section 2 of chapter 121G of the General Laws.......................................................................................................... $38,000,000

 

7004-0048. For the purpose of providing financial support for developing residential housing units and mixed use developments that include both residential housing units and commercial or retail space and are located within neighborhood commercial areas including, but not limited to, those areas designated as main street areas by providing necessary financial assistance to the commercial components of these projects; provided, that the developments may include projects which have residential units above commercial space and shall be located in areas characterized by a predominance of commercial land uses, a high daytime or business population or a high concentration of daytime traffic and parking; provided further, that the financial subsidy for the commercial portion of a project shall not exceed 25 per cent of the total development cost of the commercial portion of the project or $1,000,000, whichever is smaller; provided further, that eligible activities for transit-oriented development shall include, without limitation, planning grants, financing subsidies and environmental assessment; and provided further, that not less than 50 per cent of the beneficiaries of housing in projects assisted by this item shall be persons whose income is not more than 80 per cent of the area median income, as defined by the United States Department of Housing and Urban Development.................................................................. $12,000,000

 

SECTION 3. To meet the expenditures necessary in carrying out section 2, the state treasurer shall, upon receipt of a request by the governor, issue and sell bonds of the commonwealth in an amount to be specified by the governor from time to time but not exceeding, in the aggregate, $1,287,000,000. All bonds issued by the commonwealth, as aforesaid, shall be designated on their face, Financing the Production and Preservation of Housing for Low and Moderate Income Residents Act of 2017, and shall be issued for a maximum term of years, not exceeding 30 years, as the governor may recommend to the general court pursuant to Section 3 of Article LXII of the Amendments to the Constitution; provided, however, that all such bonds shall be payable not later than June 30, 2052. All interest and payments on account of principal on such obligations shall be payable from the General Fund. Bonds and interest thereon issued under the authority of this section shall, notwithstanding any other provision of this act, be general obligations of the commonwealth. An amount not to exceed 2 per cent of the authorizations may be expended by the department of housing and community development for administrative costs directly attributable to the purposes of this act, including costs of clerical and support personnel. The director of the department of housing and community development shall file an annual spending plan with the fiscal affairs division, the house and senate committees on ways and means, the house and senate committees on bonding, capital expenditures and states assets and the joint committee on housing which details, by subsidiary, all personnel costs and any administrative costs charged to expenditures made pursuant to this act.

 

SECTION 4. Section 6I of chapter 62 of the General Laws, as amended by section 76 of chapter 219 of the acts of 2016, is hereby further amended by striking out in paragraph (1) of subsection (c) the words, “provided further, that no credit shall be authorized related to a project that receives state financial assistance authorized under section 7A of chapter 244 of the acts of 2002.”

 

SECTION 5. Section 31H of chapter 63 of the General Laws, as amended by section 83 of chapter 219 of the acts of 2016, is hereby further amended by striking out in paragraph (1) of subsection (c) the words, “provided further, that no credit shall be authorized related to a project that receives state financial assistance authorized under section 7A of chapter 244 of the acts of 2002.”

 

SECTION 6.  Section 1 of chapter 121B of the General Laws, as amended by section 1 of chapter 235 of the acts of 2014, is hereby further amended by inserting, after the definition of “Blighted open area,” the following definition:-

“Capital funds”, funds advanced by the department to a housing authority under state legislation financing capital outlays for housing production and/or preservation, including without limitation state legislation authorizing the issuance and sale of bonds by the Commonwealth to finance capital expenditures.

SECTION 7.  Said section 1 of said chapter 121B, as so amended, is hereby further amended by inserting, after the definition of “Relocation project,” the following definition:-

“Replacement units”, low rent housing created to replace an existing housing project that is demolished or disposed of under subsection (k) of section 26; such units may be included within a privately owned mixed-income development that also includes dwellings that are not low rent housing, provided that the use and occupancy of the replacement units is subject to a binding legal contract and land use restriction under paragraph (7) of subsection (k) of section 26.

 

SECTION 8.  Section 11 of chapter 121B of the General Laws, as appearing in the 2014 Official Edition, is hereby amended by adding the following paragraph:-

Notwithstanding any general or special law to the contrary, a housing authority, with the approval of the department, shall have the power to secure indebtedness incurred for the preservation, modernization and maintenance of one or more of its low-rent housing developments assisted under section 32 or section 34 of chapter 121B by a pledge of a portion of capital funds awarded to it for improvements to be carried out pursuant to a department-approved capital improvement plan in accordance with department regulations governing capital projects.  The department shall promulgate regulations establishing limitations on the percentage of awarded capital funds that may be pledged to secure indebtedness, describing permitted terms for borrowing and repayment, and establishing criteria for housing authorities that will be permitted to incur indebtedness secured by a pledge of capital funds.  Any pledge of future year capital funds under this section is subject to the availability of funds under the department’s capital spending plan as approved by the Governor  for that year. All financing documents related to future year capital fund amounts must include a statement that the pledging of funds is subject to the availability of funds under the department’s capital spending plan as approved by the Governor.

 

SECTION 9.  Section 16 of said chapter 121B, as so appearing, is hereby amended by adding the following paragraph:-

Notwithstanding any provision to the contrary in this chapter or in any other general or special law relative to the tax status of real property, where a housing authority sells or transfers ownership of buildings or other structures on land owned by it to a private entity, including without limitation a for-profit or charitable corporation, general or limited partnership, or limited liability company, for the purpose of rehabilitation, repair, development, or redevelopment of multifamily housing that will contain replacement units as defined in section 1, so much of the resulting buildings or structures as is restricted for use as replacement units, including associated common areas, and associated land shall be exempt from taxation, betterments and special assessments.   If replacement units and associated common areas constitute only a portion of such resulting buildings or structures, the exemption shall be prorated based on the ratio which the square footage of replacement units bears to the square footage of all other residential or commercial units within the buildings or structures.  The private entity shall pay (i) with respect to the exempt portion of the buildings or structures and land, a payment in lieu of taxes consistent with the valuation or other formula generally applicable under this section to the housing authority’s real estate in the city or town in which such real estate is located, or as otherwise previously agreed upon between the city or town and the housing authority as the method for computing the payments to be made in lieu of taxes, and using the ratio described above, and (ii) with respect to the non-exempt portion of the buildings or structures and land, real estate taxes in accordance with chapter 59 of the General Laws based on the fair cash value of the non-exempt portion of the buildings or structures and non-exempt portion of the land using the ratio described above.

 

SECTION 10.  Section 26 of said chapter 121B, as so appearing, is hereby amended by inserting after the word “sale,” in line 91, the following words:- or other disposition.

 

SECTION 11.  Said section 26 of said chapter 121B, as so appearing, is hereby further amended by striking out, in lines 94 to 95, the words “notwithstanding the provisions of clause (d) or section thirty-four,”.

 

SECTION 12.  Subsection (k) of said section 26 of said chapter 121B, as so appearing, is hereby further amended by striking out paragraphs (1), (2), (3) and (4) and inserting in place thereof the following 4 paragraphs:-

(1) found that all or a substantial portion of such existing housing project or part thereof requires such substantial modernization or rehabilitation to continue to provide decent, safe and sanitary housing that, in the judgment of the department, the required substantial modernization or rehabilitation cannot feasibly be executed by the housing authority pursuant to the provisions of this chapter;

(2) approved the proposed project, including a relocation plan for occupants of the existing project and a plan to make housing available on the land where the existing project is situated, in which the number of replacement units restricted as low rent housing for occupancy by low income persons or families shall be the same as the number of low rent housing units in the existing housing project or part thereof that is subject to demolition or disposition, unless the department determines that (A) a shortage of low-rent housing no longer exists in the applicable city or town, or (B) the reduction in the number of units is necessary to increase the number of units that are accessible for persons with disabilities, which project may include plans to use a portion of such land for market-rate housing or for a public purpose ancillary to such development and approved by the department;

(3) approved the sale or other disposition and the terms thereof, which shall be at the fair market value for the proposed reuse unless the department determines that a below-market disposition would be in the public interest in order to support the continued occupancy of dwelling units in the new development by families of low income;

(4) determined that the availability of funds to the housing authority for such project is conditioned upon the occurrence of the initial mortgage loan closing for the development of new or rehabilitated housing on the land where the existing project is situated; and the selection by the housing authority through a qualifications-based competitive procurement process approved by the department of a developer best qualified to develop, own and operate the new or rehabilitated housing on the existing land, for providing for such development of the new housing within a reasonable time in accordance with department-approved contracts, and for assuring continued occupancy of the required number of replacement units in the new development by families of low income in accordance with the requirements of this chapter.  

 

SECTION 13.  Said subsection (k) of said section 26 of said chapter 121B, as so appearing, is hereby further amended by adding the following paragraph:-

(7) approved a binding legal contract and land use restriction to be entered into by the transferee of the property in favor of the local housing authority and the department of housing and community development that requires compliance with chapter 121B of the General Laws and 760 CMR §§ 4.00 et seq., 5.00 et 2seq. and 6.00 et seq. with respect to the replacement units in the same manner and to the same effect as if such entity were a housing authority, subject to such regulatory waivers given by the department of housing and community development as may be necessary to secure financing.   The contract shall require compliance in perpetuity unless the department determines that the project financing requires the use of Federal low income housing tax credits and that compliance in perpetuity would make it infeasible to comply with Internal Revenue Service requirements with respect to the low income housing tax credit program.

 

SECTION 14.  Said section 26 of said chapter 121B, as so appearing, is hereby further amended by striking out, in line 242, the words “section or section 34” and inserting in place thereof the following words:- any provision of this chapter.

 

SECTION 15.  Said section 26 of said chapter 121B, as so appearing, is hereby further amended by inserting after the words “feasible to”, in line 247, the following words:- maintain or to.

 

SECTION 16.  Said section 26 of said chapter 121B, as so appearing, is hereby further amended by inserting, in line 251, after the word “demolition,” the following words:- or other disposition.

 

SECTION 17.  Said section 26 of said chapter 121B, as so appearing, is hereby further amended by striking out, in line 253, the words “as of November 1, 2012” and inserting in place thereof the following words:- for at least two years.

 

SECTION 18.  Said section 26 of said chapter 121B, as so appearing, is hereby further amended by adding the following subsection:-

(q) Notwithstanding any general or special law to the contrary, including without limitation section 16 of chapter 30B of the General Laws, a housing authority may dispose of property pursuant to this section or section 34 of this chapter to a developer selected by competitive, qualifications-based procurement without separately soliciting proposals for the property disposition, provided that the developer procurement declares the property available for disposition and that, in the case of a disposition of property pursuant to subsection (k), the number of replacement units required under paragraph (2) of said subsection (k) are provided.  Without limiting the generality of the foregoing:

 

(1)  A housing authority shall not be required to determine the value of the property prior to soliciting proposals for selection of a developer best qualified to develop, own and operate the new or rehabilitated housing on the land.  Prior to disposition of property by deed or other instrument, the housing authority shall determine the value of the property through procedures customarily accepted by the appraising profession as valid prior to the sale or other disposition of the property, and if, with the approval of the department, the housing authority decides to dispose of the property at a price less than the value as so determined, the housing authority shall publish notice of its decision in the central register, explaining the reasons for its decision and disclosing the difference between such value and the price to be received; and  

 

(2)  A housing authority shall not be required to specify all of the restrictions that may be placed on the subsequent use of property prior to selecting a developer through a qualifications-based competitive procurement process, provided that the developer procurement identifies the minimum number of dwelling units in the new development that must be occupied by families of low income.  In the case of a disposition pursuant to subsection (k), such minimum number must conform to the requirements of paragraph (2) of subsection (k).

 

SECTION 19.  Section 29 of said chapter 121B, as so appearing, is hereby amended by adding the following paragraph:-

Notwithstanding any provision to the contrary in this section or elsewhere in this chapter, if a housing authority does not own, lease or manage any housing project assisted under section 32 or section 34 of this chapter, the department shall not investigate such housing authority’s budgets, finances, dealings, transactions and relationships or other affairs, nor shall the department require periodic reporting by any such housing authority.  Without limiting the generality of the foregoing, a housing authority that does not own, lease or manage any housing project assisted under section 32 or section 34 of this chapter shall not be required to (a) conduct elections for tenant board members under section 5A, (b) participate in a training program under section 5B, (c) submit contracts with its executive director to the department for review pursuant to section 7A, (d) participate in the performance-based monitoring program established pursuant to section 26B, (e) participate in the regional capital assistance team program established pursuant to section 26C, (f) prepare and submit an annual plan pursuant to section 28A and this section, or (g) prepare and submit, or make available, a written report and agreed upon procedures for review of housing authority financial records pursuant to this section 29.

 

SECTION 20.  Section 34 of said chapter 121B, as so appearing, is hereby amended by striking out the fifth paragraph and inserting in place thereof the following paragraph:-

The proceeds of any sale or other disposition of such project in excess of the total of all obligations of the housing authority with respect to such project shall, after the payment of all bonds issued by the housing authority to finance the cost of such project and payment of the costs of the sale or disposition, be retained by the housing authority for the preservation, modernization and maintenance of its public housing assisted under this chapter as approved by the department, or where the housing authority has no public housing assisted under this chapter, such proceeds shall be paid to the department to fund capital improvements for the preservation, modernization and maintenance of state-aided public housing. 

 

SECTION 21.  Said section 34 of said chapter 121B, as so appearing, is hereby further amended by striking out the tenth paragraph and inserting in place thereof the following paragraph:-

Whenever a housing authority shall determine that land acquired by it under clause (d) of section 11 for the purpose of this section is in excess of or no longer required for such purposes it may, upon approval by the department, sell or otherwise dispose of such land by deed or instrument approved as to form by the attorney general. If the housing authority is disposing of such land for purposes of housing development, it may do so in accordance with section 26 of this chapter.  So long as any bonds issued by a housing authority to finance the cost of a project under this section or section 35 and guaranteed by the commonwealth are outstanding, funds received from a disposition of land as provided in this chapter shall be applied in accordance with the fourth paragraph of this section.  After the payment of all bonds issued by the housing authority to finance the cost of such project, funds received shall be applied in accordance with the fifth paragraph of this section.

 

SECTION 22.  Said section 34 of said chapter 121B, as so appearing, is hereby further amended by adding the following paragraph:-

Notwithstanding any general or special law to the contrary, construction and development activity related to redevelopment of state-aided public housing projects where the land, buildings or structures associated with the housing project have been conveyed or transferred to a private entity for purposes of completing the redevelopment shall not be subject to any general or special law related to the procurement and award of contracts for the planning, design, construction management, construction, reconstruction, installation, demolition, maintenance or repair of buildings by a public agency, provided that the department shall review and approve the procurement processes used to undertake this redevelopment in accordance with subsection (q) of section 26.  Nothing in this section shall be deemed to exempt a housing project from sections 26 to 27H, inclusive, of chapter 149 of the General Laws.

 

SECTION 23.  Section 4 of chapter 708 of the acts of 1966, as most recently amended by section 45 of chapter 463 of the acts of 2016, is hereby further amended by adding the following subsection:-

(aa)      Take any and all actions necessary and appropriate, directly or through an affiliate or subsidiary entity, (i) to provide contract administration services in or for any state of the United States of America or the District of Columbia, in connection with any multifamily rental subsidy program of the U.S. Department of Housing and Urban Development; (ii) to provide loan servicing services with respect to one- to four-family residential mortgage loans secured by mortgages on real property located in any state of the United States of America or the District of Columbia, provided the Massachusetts Housing Finance Agency shall not enter into any agreement for such loan servicing unless the majority of loans to be serviced are mortgage loans secured by mortgages on real property located within the Commonwealth; and (iii) to provide any loan servicing, master servicing, mortgage insurance and other commercial services and products related to residential mortgage loans in partnership with a governmental or quasi-governmental agency in any state or the District of Columbia; in each case unless and to the extent prohibited by the laws of any such state or the District of Columbia.

 

SECTION 24.  Section 100 of chapter 142 of the acts of 2011, as amended by section 14 of chapter 129 of the acts of 2013, is hereby further amended by striking out the figure “2020” and inserting in place thereof the following figure:- 2025.

 

SECTION 25. Section 2 of chapter 129 of the acts of 2013 is hereby amended by striking out the language of item 7004-0039 and inserting in place thereof the following words:-

For a program of loans or grants to assist homeowners or tenants with a household member with blindness or severe disabilities in making modifications to their primary residence for the purpose of improved accessibility or to allow those individuals to live independently in the community or for construction costs to allow for the creation of an accessory unit, defined as an additional dwelling unit separate from the primary dwelling unit, for a person with disabilities or an elder needing assistance with activities of daily living; provided, that up to 10% shall be used for grants to assist landlords seeking to make modifications for a current or prospective tenant with disabilities, who but for this grant would be unable to maintain or secure permanent housing; provided, that the secretary of health and human services shall take all steps necessary to minimize the program’s administrative costs; provided further, that the program shall be available pursuant to income eligibility standards approved by the secretary of health and human services; provided further, that the repayment of the loans may be delayed until the sale of the principal residence by the homeowner; provided further, that persons residing in a development covered by section 4 of chapter 151B of the General Laws shall not be eligible for the program unless the owner can show that the modification is an undue financial burden or that the landlord is participating in the grant program to maintain or secure housing for a tenant with disabilities; provided further, that the secretary of health and human services shall consult with the Massachusetts commission for the blind and the Massachusetts rehabilitation commission in developing the rules, regulations and guidelines for the program; provided further, that nothing in this item shall give rise to enforceable legal rights in any party or an enforceable entitlement to services; and provided further, that the secretary of health and human services shall submit quarterly reports to the house and senate committees on ways and means, the house and senate committees on bonding, capital expenditures and state assets and the joint committee on housing detailing the status of the program established in this item.

 

SECTION 26. Item 7004-0045 of said section 2 of said chapter 129 of said acts of 2013 is hereby amended by striking out the words “5-year”.

 

SECTION 27. Said item 7004-0045 of said section 2 of said chapter 129 of said acts of 2013 is hereby further amended by striking out the words “or chapter 705 of the acts of 1966”, and inserting in place thereof the following words:- , chapter 705 of the acts of 1966, chapter 689 of the acts of 1974 or chapter 167 of the acts of 1987.

 

SECTION 28. Said item 7004-0045 of said section 2 of said chapter 129 of said acts of 2013 is hereby further amended by striking out the words “chapter 7 of the General Laws”, and inserting in place thereof the following words:- chapter 7C of the General Laws.

 

SECTION 29. Section 18 of chapter 129 of the acts of 2013 is hereby amended by striking out the figure “2048” and inserting in place thereof the following figure:- 2052.

 

 

SECTION 30.  Chapter 287 of the acts of 2014 is hereby amended by striking out section 125 and inserting in place thereof the following section:-

SECTION 125. Sections 46, 48, 61, and 63 shall take effect on January 1, 2024.

 

SECTION 31. Notwithstanding Section 14 of chapter 29 of the General Laws, to provide for the continued availability of certain capital appropriations for other than ordinary maintenance financed by the sale of bonds and notes, the balances of the following appropriation items and any allocations thereof authorized in section 2 of chapter 129 of the acts of 2013 are hereby extended through and shall be available for expenditure in the 5 fiscal years following June 30, 2017 for the purposes and subject to the conditions stated in the authorizations as appearing in said chapter 129:  3000-0400, 7004-0039, 7004-0040, 7004-0041, 7004-0042, 7004-0043, 7004-0044, 7004-0045, 7004-0046, 7004-0047, and 7004-0048.

 

SECTION 32.  Sections 4 and 5 shall be effective for tax years beginning on or after January 1, 2018.