Tax Credit Program for Market-Rate Housing Announced
BOSTON – Monday, June 18, 2012 - The Patrick-Murray Administration’s Department of Housing and Community Development (DHCD) today announced the Housing Development Incentive Program (HDIP), a new state tax-credit program to spur market-rate housing development in the Commonwealth’s 24 Gateway Cities.
“One of the goals of the Patrick-Murray Administration’s long-term economic development plan is to improve the economic strength and competitiveness of every community in the state,” said Secretary of Housing and Economic Development Greg Bialecki. “HDIP fits those priorities by encouraging more market-rate housing in our Gateway Cities.”
“We look forward to working with mayors, city leaders and the development community to expand housing opportunities in our Gateway Cities,” said Undersecretary of Housing and Community Development Aaron Gornstein. “I thank the legislature for their work in creating this innovative program.”
“HDIP responds to the needs I see in the neighborhoods of New Bedford every day,” said State Representative Antonio Cabral. “The Patrick-Murray Administration’s commitment to working with the Gateway Cities Legislative Caucus and me to make this program possible represents another example of their proven dedication to our communities.”
“The HDIP program will assist our twenty-four Gateway Cities -- including my hometown of Pittsfield -- with developing new housing inventory, rehabilitating existing stock, creating jobs, and improving local economies,” said State Senator Benjamin B. Downing.
Applications for the program will be accepted beginning today. HDIP will provide developers with two tax incentives to undertake substantial rehabilitation of properties to create multi-unit market-rate housing, including a local-option tax exemption on increased property values and state tax credit of up to 10 percent of qualified rehabilitation costs. There will be a $5 million annual cap on the state tax credit.
DHCD will host two workshops in July, open to municipalities and developers, on program requirements and operations. All program regulations, guidelines and an application can be found on DHCD’s website. The projects may include commercial space and must contain no more than 50 market-rate residential units and 80 percent of the residential units must be market rate.
Gateway Cities interested in participating in the program must submit a zone plan to DHCD for approval, execute a real estate tax exemption agreement with any developer undertaking a project and promote residential and economic development in the target area.
After a zone plan has been submitted and approved, a developer must work with the city to submit a proposed project for certification, demonstrating that the project meets HDIP program requirements and that a real estate tax exemption agreement has been reached.
The Patrick-Murray Administration has made numerous investments in the Commonwealth’s Gateway Cities. The Administration has implemented the following strategy to make the state’s Gateway Cities communities centers of economic activity:
- Make long-term investments in education, innovation and infrastructure, with special attention to the growth potential of each city’s entrepreneurs and small businesses.
- Leverage the potential of each community’s distinctive assets, including their educational, medical and cultural institutions and their historic buildings and neighborhoods.
- Connect Gateway Cities to other local, state and global centers of innovation and economic activity.
In keeping with this strategy, the Patrick-Murray Administration has made the following Gateway City investments:
- $1,855,536,592 in Chapter 70 Education Funding and Unrestricted Local Aid in 2009.
- Over $1 billion in active construction contracts through MassDOT.
- Over $20 million in Gateway City Parks grants for park projects in 24 cities.
- $109,150,534 since 2007 in public safety grants for police and fire departments and non- profit agencies to maintain staffing levels and combat violence.
- $17,484,882 since 2007 in Workforce Training Grants.
Below is a list of Gateway Cities throughout the Commonwealth: