Program Description

The Urban Center Housing Tax Increment Financing Program (UCH-TIF) is established under M.G.L. Chapter 40, Section 16 to encourage increased residential growth, affordable housing and commercial growth in urban and commercial centers. The UCH-TIF Program gives cities and towns the ability to promote residential and commercial development in commercial centers through tax increment financing, which provides a real estate tax exemption on all or part of the increased value (the "Increment") of improved real estate. This development must be primarily residential. Tax increment financing may be combined with grants and loans from local, state and federal development programs. The Department of Housing and Community Development's (DHCD) Division of Community Services (DCS) is responsible for the review and approval of all UCH-TIF applications.

An important purpose of the program is to increase the amount of affordable housing for households with incomes at or below 80% of area median income. Such affordable housing will count on DHCD's Subsidized Housing Inventory. The program requires 25% of new housing to be affordable, although DHCD may approve a lesser percentage where necessary for the financial feasibility of a housing development.

How it works:

In order to take advantage of the program, a city or town must adopt a detailed urban center housing tax increment financing plan ("UCH-TIF Plan") for certain designated areas that are predominantly commercial with high business or commercial use (the "UCH-TIF Zone"). The UCH-TIF Plan must demonstrate the need for multi-unit housing in the UCH-TIF Zone and contain detailed development plans, including executed agreements with property owners who will be undertaking new development and who will be receiving tax increment exemptions ("UCH-TIF Agreements").

Application process:

DHCD will review and approve each UCH-TIF Zone and each UCH-TIF Plan as well as each UCH-TIF Agreement in order to ensure compliance with program requirements set out in the UCH-TIF statute, regulations and program guidelines.

For more information:

Please contact DHCD's Division of Community Services at 617-573-1400. Division staff is also available by appointment to provide assistance with applications.