It is disappointing that House Speaker Ron Mariano and Senate President Karen Spilka aren’t jumping on board with Gov. Charlie Baker’s proposal to plow $1 billion into first-time homebuyer assistance and affordable housing construction.
Baker made his pitch to legislators and voters late last week to split the state’s roughly $5.2 billion in federal COVID-19 aid into two pots: $2.38 billion for the legislature to divvy up at a later date as it sees fit and $2.8 billion for the governor to distribute, including $500 million for first-time homebuyer help focused on communities of color and $500 million to fund rental housing production, including senior and veteran housing.
Spilka and Mariano swiftly made their disdain for Baker’s idea known in a joint statement: “We appreciate the Governor’s spending proposal, but we continue to believe that this once in a generation opportunity demands a thoughtful public vetting.”
Instead, the duo plan to disappear all $5.2 billion in federal aid into a kitty their members can dip into to fund pet projects “over multiple years” in response to questionably transparent lobbying from constituents. And given the power dynamics of the situation – the House and Senate must typically OK all spending bills despite the governor’s insistence he has the authority to allocate the federal money on his own – Baker’s proposal is clearly dead on arrival.
By seeking a slush fund to boost their standing with voters, legislators are missing one of the biggest opportunities the state has had in years to attack both the racial wealth gap and the dire shortfall of affordable housing.
To give an idea of the scale of Baker’s proposal, MassHousing’s highly successful down payment assistance program helped 2,055 first-time buyers in its first two years, at a cost of only $15.8 million. With the median home price having soared by 20 percent or more in many parts of the state, working- and middle-class Bay Staters who might otherwise be able to afford a home of their own need all the help they can get to pull together down payments.
And in the wake of a pandemic marked by stark racial inequalities, a huge infusion of cash into down payment aid can help correct the state’s yawning racial wealth gap, which is largely driven by big disparities in home ownership rates.
On the affordable housing production side, when the state’s 2019 multi-year housing development bonding bill, touted as the biggest in state history, only hit $1.8 billion, an additional $500 million funding boost is extremely significant as a tool to fill gaps left when loans, Low Income Housing Tax Credits and other subsidies aren’t enough as construction costs keep spiraling upwards.
Beacon Hill makes a mistake in choosing to pass out these federal funds in a slow drip for their own political benefit when it has a chance to strike a hammer blow against the biggest threat to the state’s economic competitiveness in this age of remote work and rising inequality.
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